Which Affiliate Coupon Strategy Works for You? – By Matt Enders

by Colleen on February 17, 2014

If you have an affiliate program, it is likely that you have approved coupon sites to your program. This article will help you understand how to set your goals, understand the value of your current affiliates, and create a coupon strategy for use in your affiliate program. ff25_cover_small

Setting Your Goals

In order to set your goal, you have to decide what you want to accomplish. Let’s use the following question as the driver of your thought process:

Do I want my affiliate program to drive top-line revenue, or do I want to focus on incremental sales?

If you are interested in driving sales that are focused on creating incremental value, you need to develop a strategic plan for working with coupons and coupon affiliates. If not, focus on mass distribution of your brand name and consumer offerings as a method of generating top-line revenue.

Understanding Your Current Affiliates

Within your affiliate program interface run a report spanning a significant time duration (12 months, for example). Organize the data from this report in an Excel file so you can see the individual affiliate and their total sales volume. Add a column for “Percent of Total Sales” and use a formula to calculate each affiliate’s total contribution in sales volume.

Now, add another column for “Type of Site”. You’ll need to manually review each affiliate site so that you can classify them (broadly is okay) into specific groups. You can simplify this step, if you like, to classify each affiliate as either “Coupon Site” or “Other”. Once you have classified all affiliates, add a final column for “Percent of Total Sales by Affiliate Type”. Using another quick formula and you can see the total contribution of coupon affiliates versus non-coupon affiliates in your program.

Armed with this data, we can now evaluate our reality versus our strategy.

Creating Your Coupon Strategy

Let’s assume that you want to implement a strategy which is more involved than the “provide coupons to all affiliates” approach so commonly used. There are a variety of options you can implement, each with its own set of pros and cons to consider.

I will not go into those pro and con considerations. Some of the options you can consider implementing include:

• Offer no coupons via the affiliate program
• Offer limited coupons to select affiliates
• Change your commission structure for coupon affiliates versus other types of affiliates
• Encourage the acquisition of new customers via commission bonuses, first-time only customer coupons, and other strategies
• Pay commission at different levels to multiple affiliates who may have been involved in the conversion path of a particular customer

Note that the above are only a few options for crafting coupon strategy, but vary widely in design. When crafting your particular coupon strategy, you have nearly limitless options at your disposal.

The key to devising a successful strategy is to decide upon your goal, consider possible pros and cons, and base your decision upon facts which you have gathered.

Matt Enders is the CEO of MGECOM, Inc.

This article appeared in issue 25 of FeedFront Magazine, which was published in January 2014. http://issuu.com/affiliatesummit/docs/ff25_full_final_web

Comments on this entry are closed.