 | Discount Codes: Affiliates vs Users vs Merchants |
Discount codes and their misuse have again reared their ugly head in the world of affiliate marketing. Joe has recently blogged about codes and suggests that merchant’s “manage promotional codes intelligently” so that we are all winners! The problem is quite simple - promotional codes get distributed around the internet.
So for example, if The Daily Mirror offered it’s readers numerous free prints from Photobox, before long this offer is posted around the web. Great if you’re a money saving site who don’t need revenue from affiliate marketing. Not great if you’re an affiliate of Photobox and the best you can offer your users is 30 free prints.
Some affiliates seeing this offer may then be tempted to tag their own affiliate link in place and see if sales are generated. Unfortunately, as has been the case recently with other merchants, affiliates may find any commission they make from such sales withdrawn and in some cases removed from programs.
The current norm is for merchants and networks to tell affiliates to monitor their sites and be responsible for making sure they’re doing the right thing - including removing non-affiliate codes. That’s all well and good and as a good affiliate I’m happy to do that as I want to maintain good relations.
Good affiliates though wouldn’t tag the link so straightaway will be losing potential commission, but here’s the good affiliate’s dilemma: do they leave codes on site “for free”, risk the wrath of the merchant or network for wrongful use or delete the code and risk losing users who can get codes in other places.
None of the options appeal, especially the latter as not all users understand or perhaps care about “rules” that a good affiliate has to abide by - “So and so site lists these codes” is the standard argument and makes the good affiliate the “bad guy” by trying to do the right thing.
So how can some of these discount code problems be resolved?
Stopping Affiliate’s Using Non-Affiliate Discount Codes?
If Merchant X offers Site Y a discount code “CODE1″ it should be possible to create a landing page that can’t be deeplinked via an affiliate link. If an affiliate code is detected - redirect to a different page! If the code has to be entered at checkout it should be possible to do a check along the lines of “if affiliate code + discount code = no code accepted in this combo therefore tell user this is not allowed?”
Giving Affiliates Competitive & Comparative Codes?
Remove the problem in one foul swoop by giving affiliates competitive and comparative codes. Let’s take the Photobox example again. It’d be interesting to know how many sales were made via non-The Mirror sources. Perhaps it’s sensible for affiiliates to add their links so that agencies and merchants can see where their sales are coming from (assuming they don’t check their referral logs - merchants do do this, don’t they?).
Also if affiliates can offer discounts to their user base, it takes away some of the impact of money saving sites that allow any old code to be posted promoted. I know some networks do it, but it’d be great to have access to a list of all merchants who offer discount - either direct or via a tiered commission system.
Actually a tiered commission system is something I’m surprised hasn’t been implemented by any network. E.g. Insurance Company A offers £100 commission to the affiliate, but by using code “CODE1″ an affiliate can offer £50 to their user and take a reduced £50 commission. Perhaps it might give some content/community sites a new angle whilst in competition with the ever dominant cashback sector?
Stopping Non-Affiliate’s Using Non-Affiliate Discount Codes?
Take elements of the above and combine them. Create a landing page, force the user to register, give that user a unique code for them only that must be used within a fixed time. Use referrals to check where traffic is originating from and if necessary deny access to those referrals from being able to generate codes. It’s not infallible though but might reduce some of the problems.
Providing A Better System?
Rather than merchant’s getting all humphy because their ill thought out voucher code campaign has been hijacked by all and sundry, why not actually develop a system that works? Prevent multiple codes being used! If a merchant offers a free delivery code or a 10% discount or £5 off - a customer shouldn’t be able to use all codes in one transaction!
If a code is for flowers, make sure the code can’t be used for other products. If a code isn’t for affiliates, make sure affiliates can’t exploit it. If a code is specific for an affiliate, and it’s hijacked by another affiliate, award the sale to the “discount affiliate”. Monitor sales closely (i.e. every 5 minutes) and if a code looks to be being exploited, suspend it.. so many things could be done yet they rarely are!
By, as Joe suggests, managing promotional codes intelligently, it avoids friction with affiliates, who in turn can avoid friction with their users - meaning everyone is happy, at least until the next problem!
PS If you’re a merchant and are happy to provide us with an exclusive promotional code… please get in touch!
on June 11, 2007 at 8:41 am Kevin Edwards wrote:
Affiliate Window offers merchants the ability to track individual sales and marry these with bespoke discount codes.
For example, an affiliate’s sales will be recorded with any relevant codes. If their bespoke code matches their sales we can be confident the codes are being used in the appropriate way. This avoids the issue of codes being used when they have not been authorised to do so by the merchant, as well as providing a deeper level of reporting on conversion rates and sales’ volumes the codes are driving.
on June 12, 2007 at 9:07 am Kaybard Blog » Blog Archive » Discount Codes Vs Cashback Sites wrote:
[…] just want to quickly bring up a point mentioned on Jason’s blog about discount […]
on June 12, 2007 at 3:39 pm Stephen Pratley wrote:
Interesting idea about the ‘cashback’ vouchers Jason. I’ve seen a few sectors such as credit cards have to slash their commissions in recent years as they give more back to their customers themselves leaving less budget for commissions.
This would give affiliates the choice themselves in how to promote the merchant. Full price at full commission, or low price at low commission. I imagine it would only work with areas like finance or very high ticket goods where the commission is a significant sum.
Nice idea….
on June 12, 2007 at 3:52 pm shyguy0507 wrote:
I also like the idea about cashback vouchers, I think it could work on lower priced items as well as the user wouldn’t have to register or collect a certain amount of cash in their accounts to claim their ‘reward’. It’s there effectively as soon as they purchase. No more waiting or registering just buy at a discount rate.
Great idea
on June 14, 2007 at 9:54 am Chris wrote:
Tiered commission system: I have a few of these in place, where I have personally agreed to a drop in commission levels, in order to provide customers with a discount, so it is already available.
Another option is to tie up a code with an affiliate. Again I have this in place via an independent merchant that has provided me with a discount code. So no matter where the customer originates from, if they use my code, then I get the discount. Therefore if it gets published or copied by others, then because I have arranged the code, I get the commission not the other website.
This is something I blogged about some time ago regarding dropped baskets.