Essential “Need to Knows” for Affiliate Coupon Management

Earlier this month I had the opportunity to listen to Todd Crawford speak about coupon affiliate management at the Online Marketing Summit. He made some really great points. Here are my immediate takeaways:

 

A Few Top Coupon / Loyalty Affiliates:

  • Offers.com
  • Shopathome.com
  • Cheapsally.com
  • Bradsdeals.com
  • Clickdeals.com
  • Dealtaker.com
  • Couponsurfer.com
  • Mrrebates.com
  • Deals.com
  • Savings.com
  • CouponCabin.com
  • Amazing-Bargains.com
  • RetailMeNot.com

 

Two Types of Buyers on Coupon Sites:

  1. “Penny Pinchers” – can only afford to buy if they get a discount
  2. “Deal Seekers” – will buy (and up their order volume) only if there is a deal on

 

Challenges with Working with Coupon / Deal Sites:

  1. Margin Erosion
  2. Increased media cost (pay for affiliate plus ppc)
  3. Brand dilution
  4. Poor customer satisfaction (the coupon doesn’t work)
  5. Loss of control (once you let it loose where do you go? It gets out of control)
  6. Inaccurate analytics
    1. – how do you measure the effectiveness of one particular coupon on one particular site when it gets let loose and picked up everywhere?

 

 Alternatives to Giving a Discount Coupon

  1. Free shipping
  2. Minimum purchase amount
  3. Product, Brand or Category Specific
  4. Deal of the Day
  5. Limited Quantity
  6. Bundling
  7. Gift with Purchase
  8. Clearance
  9. Seasonal Sales

 

Marketing Goals of Working with Coupons (and you should be measuring these):

  1. Increased AOV
  2. Acquire new customers
  3. Re-engaging existing customers
  4. Limit Exposure
  5. Control media costs
  6. Extend Brand

 

How to Manage your Coupons Properly:

  1. Test with select groups of partners – try a coupon with only one or two affiliates first and see how they work.
  2. Use exclusives / vanity code
  3. Negotiate for premium placement
  4. Limit use to channel or partners
  5. Determine the right metrics to measure before you start

Industry Interview with Award Winning Affiliate Manager, Matt McWilliams

As a continuation to my “Getting to Know Performance Based Marketing” interview series, I asked award winning Affiliate Manager, Matt McWilliams, a few questions. In his responses are some great points and tips for new merchants coming into the space.

Q:   How did you get into the Affiliate Marketing industry?

“Everyone seems to have a story for that question. It seems like we are approaching the first generation of people who actually got into affiliate marketing because they wanted to and set out to do it.

I am like so many over the past 10 years…I got into it by accident. I worked with a good friend of mine, Hunter Ingram, at HometownQuotes in 2004. I had no idea what an affiliate was. I was doing sales, web design, PR, and small bits of coding and Hunter was doing the marketing and affiliate management and was CEO. 

By mid-2006 it dawned on me that I was the one doing all of the communicating with affiliates. Poor Hunter…he was completely clueless on the programming and technical side of things so inevitably everyone got turned over to me at some point.

I complained about it so he made it official…I was the new HometownQuotes Affiliate Manager. Congratulations to me. Everything from that point forward is a blur and I have loved every minute of it.”

Q: What do you like best about the industry?

“First, the growth potential for individuals. Anyone can truly make as much as they want within reason…and “within reason” can have a lot of zeroes. 

Second, the individuals themselves. The people are generally amazing. Some of my most productive and enjoyable relationships are with affiliates and other affiliate managers. I have received so much help from well over 50 people over the past 6 years; affiliate managers and affiliates alike. “

Q: What do you think merchants need the most help with when starting out?

“I still don’t feel like I have figured that out yet.

If I have to answer it I would say they absolutely have to understand what affiliates want from them and there is no better way to find out than to ask. If at all possible, they should form an advisory group of 3-5 affiliates on whom they can lean heavily. It’s hard to do that without getting started, so if they have the money, get an experienced manager. If they are doing it themselves, they need to reach out to a few, offer something in return, and get their help. It takes a lot of time, but is well worth it.

Also, they need to know the landscape of their industry insanely well. They need to know who has an affiliate program, they need to join it if at all possible, and they need to know every detail about those programs: commissions, products, conversions, features, etc. You cannot lose sight of the fact that often affiliates are a small commission increase or better offer away from bolting for greener pastures.

Too many merchants throw up a link, get a $99 software to run the program, offer a % of the revenue and think it’s going to buy them a new house in the country with a well stocked lake and a new Mercedes. The reality, there is so much work before the program even launches.”

Q: What do you wish you knew when you first started that you would have done differently?

“The one thing I would have done differently is putting our program on a network. At HometownQuotes, it might not have been a good fit for ShareASale because of the dynamics, but with every other program I have been a part of it is absolutely the right choice. Being on a network has a ton of benefits, from helping recruit affiliates to tons of features that you just cannot get on an in-house program without tons of development time. 

Also, you don’t have to worry about paying them. Early on, that is important. You can consolidate your expenses into one payment rather than hundreds.”

Q: What do you think needs to be done to help bring a better name to the affiliate marketing industry overall?

“This might be a little controversial…OK probably not, but I wish that about 2% of the people in this industry would get out and do something else, like join the mob or the space program. The 98+% of the people in affiliate marketing are drowned out too often by some of the bad apples. The spammers, the coupon crooks (again a few bad apples within that niche give the rest a bad name), cookie stuffers, and shady review sites make the industry as a whole look like a scam to people who don’t know any better.

It begins with merchant education on the problems so they can police their own affiliates. Then the networks have to use information wisely and judiciously. As much money as some affiliates are making some networks and/or merchants, it can be hard to do the right thing, but it must be done for the sake of our industry as a whole.”

Matt is an affiliate manager consultant and trainer at Affiliate Management Trainers which offers personalized affiliate management training for internet retailers, and is available along with the rest of the AMT team to help merchants better understand their affiliates needs, how to get them active, how to recruit strong performing partners, how to improve their internal performance based marketing strategy and much more.

Shedding Some Light on the “Dark Side” of Performance Based Marketing

As part of shedding light on the “good” side of affiliate marketing, I think it’s important for merchants out there to get a better understanding of the different types of affiliates including who they are, what they do and how they think.

Too many people assume affiliate marketing is about “get rich quick”, multilevel marketing, pornography and online gaming, let alone scams, fraud and malicious activity. This is not the case for everyone and there are thousands of good affiliates out there who focus on smart and ethical marketing practices to drive incremental sales and value to a merchant’s bottom line.

I recently interviewed Nick Chertock, accountant by day, affiliate marketer by night.  Nick is a video blogger in the golf niche focused on the improvement process.  He promotes high quality golf training and practice related merchandise on a performance basis through blogposts, social media, product reviews, and his own online communities of golf professionals. His website is GolfProgress.net.

Q: Please tell us what you do and your interest in the affiliate marketing world.

“I’m a golf blogger and video blogger focused on the improvement process.  My website is a destination for average golfers who would like to play much better, those who are addicted to the game.  As an affiliate marketer I call attention to products like practice equipment, training aids, dvds, learning software, fitness equipment, and golf related gadgets and unusual merchandise.  

I own about 50 other domain names, mainly in the fields of health, fitness, and back pain.  I’ve been following affiliate marketing closely since I first heard of Amazon’s associate program in 2000, before I even owned my own computer or had been on the internet.  I read about it in Fortune magazine and as someone who had dabbled in “work at home” and direct mail, this seemed like a legitimate way to market other people’s products and be compensated well to do it.”

Q: If you could give one piece of advice to a new merchant coming into the space, what would it be?

“Establish a real connection with your customer and you will build genuine trust which will allow you to rise above competing on the basis of price alone.”

Q: What would you say makes affiliates different from any other group of people you’ve worked with in the past?

“Affiliates are able to identify offers that visitors will be interested in that the visitor themself has never even imagined.  They are compensated only if they generate results for a merchant but at the same time they are free to change direction at any time, so merchants need to be aware that affiliates are not your sales force.  They are not a captive audience who will promote what you tell them to promote.  You must appeal to their desire not just to make money but to impress their own visitors in order to build long term credibility.” 

Q: For new people coming into the space, where would you say they should direct most of their time / attention?

“I still consider myself new to affiliate marketing in terms of how long I’ve actually been putting it into practice, but my recommendation, and what I’ve done in the last year, is to connect with influential people in your niche, build a sense of community with yourself as the leader, and put out unique and memorable content.  This assumes you are trying to build a long term business and are not attempting to simply broker web traffic.  Social media is a fantastic tool for becoming a thought leader.”

Q: Please give us one affiliate marketing prediction you see coming in the next year that you’re excited about and why.

“Interactive video excites me.  I’m talking about having clickable areas on top of a video that allows the visitor to both be led to other video content and to be directed to merchant sites to make purchases.  Think choose your own adventure in an online shopping center.

So as you can see, nick is just a regular guy who loves golf, business strategy and the affiliate marketing industry. Merchants can learn a lot from these guys simply by getting to know them and asking some good questions.

Stay tuned for more interviews of affiliates from different verticals and levels of skill set. Understanding your affiliate groups is one of the best ways to better leverage performance based marketing. Listen to them. Consider their suggestions. They will know how to help you more than you’d ever think possible.

Q&A with Affiliate Fraud Monitoring Solution: Brandverity

Brandverity affiliate fraud monitoring toolIn my quest to help better the name of the affiliate marketing industry (#FBAME), I decided to interview certain people who work to make a difference through the services they provide or the knowledge they shed on particular affiliate marketing matters. This week I had a Q&A with David Naffziger, CEO of affiliate fraud monitoring solution, Brandverity.

Q: When was Brandverity first Founded and how long did it take to create?

A: We first began looking at the idea in November 2007. I made it to my first Affiliate Summit in January and gathered enough interest to begin work that month. We launched an alpha version by mid-May and opened up to a much broader audience in September 2008.

Q: Why did you personally start the company?

A: BrandVerity was really the result of my work at two prior companies. I co-founded Quova to provide a service that identifies the geographic location of an IP address. Quova’s technology is currently used by Google to help target AdWords ads.  However, the core of Quova’s business was selling to the fraud departments at large e-businesses. I learnd a lot about the tactics of fraudsters and developed a healthy respect for their ingenuity.

After Quova, I helped launch and grow Judy’s Book (once a Yelp competitor).  Judy’s Book experimented with affiliate ads and at one point our marketing team ran ads that ran afoul of a large merchant’s affiliate policy. The merchant contacted us, and we asked to part of their partner’s that apparently had permission to run ads.  After a quick back and forth, we realized that the other advertisers were reverse-geotargeting their ads and the merchant had never known it was happening.

It stuck in my mind that there had to be a better way to provide visibility into ads from different geographies. The fraud aspect appealed to my interest from Quova, and the IP-geography nature of the problem seemed like a natural fit.  Following a lot of research, a lot of time reading on abestweb, and a trip to Affiliate Summit, BrandVerity was born.

Q. What makes Brandverity.com better or different from other fraud monitoring tools?

A: I think the biggest difference between BrandVerity and our competitors is that we are an affiliate compliance service as opposed to a ‘search intelligence tool.  Customers that have considered multiple solutions tell us that it feels like our service was truly designed for them. This reflects in many aspects of the service itself, who our target customer is (affiliate marketers) and how we do business.

Q: If you could tell merchants anything you wanted to about fraud monitoring, what would it be?

A: I think the most important thing is that managing affiliate compliance takes both tools AND process.  Merchants need to carefully consider their affiliate policy, determine how they will handle the different types of infractions and they need to regularly review infractions and enforce them consistently.

Q: What do you think can be done to help bring a better name to “affiliate marketing” everywhere?

A: Affiliate marketing needs to move beyond the simplistic ‘last click’ attribution. Last click is ultimately unfair to affiliates that build brand recognition and create value earlier in the buying process.  It also encourages affiliates to focus on the last possible touchpoints before a purchase.  The result is often that the most valuable web properties spurn affiliate ads in favor of higher-paying CPM ads, while some affiliates look for ways to get a commissionable cookie placed just prior to a purchase with side-effects that don’t necessarily help the brand.

As an outsourced affiliate management company, AIM continues to use Brandverity to help monitor affiliate behavior for our clients. The entire team at Brandverity is responsive, highly knowledgeable and open to helping any merchant who wants to learn this side of the industry more. I encourage anyone serious about having a successful affiliate marketing program to consider speaking with David and his team. It could be the difference of several thousand (or million) dollars a year in commissions paid out to affiliates not following your program terms of service.

To learn more, visit Brandverity.com

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