Why Should I Pay a Coupon Site Full Commission?

That you're asking this question in and of itself is a problem. Have you not been paying attention to the world around you? The economy is bad. Consumers simply can't afford to pay full price anymore and are searching for coupons and discounts more than ever.

I can't even begin to count how many articles, reports, webinars and panels I've seen discussing this over the past few years.

So why would you not want to optimize and work closely with this very active and one of the largest segments of publishers on the market?

Yes, there are some coupon sites that are of less quality than others and yes you'll want to weed those out of your program, but there are plenty of them that are well worth your efforts and money.

Many of them will provide a lot of added value for your customers and can bring in new customers and traffic. They'll often offer lots of extra placements and prime exposure at little-no extra cost to the merchant.

There's another point to consider here. There's a very strong chance your competitors are being heavily promoted on these sites because they've realized the positive value here. Even if I can't convince you that these sites are worthwhile in general, at least I can make the argument that you have to work with them or risk losing sales to your competitors.

"Ah," you say, "but I know through my analytics that this customer came to my site from another source and THEN went looking for a coupon after seeing the coupon box on the shopping cart page. So why should I pay them for that sale at all?"

You're forgetting the one most basic and fundamental aspect of affiliate marketing. This is all about building relationships. Unlike other marketing channels where it's all very data-centric, affiliates are people. If a search campaign is costing you too much, you shut it down. If a blast of e-mails didn't send you sales, you don't send the same one again. Dealing with your affiliates is not so simple.

Yes there is a chance that the customer would have made their purchase without going through the coupon site, but do we know for sure? How do we know that the customer, after checking the coupon site and not finding a coupon for your site would have abandoned their purchase for a merchant who did have a coupon? There's no way to no for sure, but better we spend a little more on those sales than risk destroying the relationship with this publisher and losing sales.

Let's say you've ignored everything I've said here and decide to start cutting down on coupon sites. You feel that they are not really bringing you quality sales and you are paying too much for them. Well, here's what will happen:

1. The coupon site, seeing that they're not making as much money, pull back on their marketing efforts for your company.
2. Competitors start showing up instead and are likely gaining traffic that was once yours.
3. Without any listings for your site on these coupons sites, some customers searching for a coupon will abandon their shopping carts.
4. Due to the lower payout and fewer active publishers your network ranking will start to drop.
5. This makes it difficult to recruit new partners who feel they may not make money with you.

You see where I'm going with this? It can just continue to snowball after that. Granted this is an extreme, but you get my point.

Bottom line is, you absolutely want to work with these sites and maximize everything you can out of them. Consumers are shopping for coupons and discounts more than every before. Brand loyalty is slowly becoming a thing of the past as consumers will simply just look for the cheapest deal and the biggest bang for their buck.

A successful affiliate program simply can't work without these sites.

It's all About Balance

Is it good to have lots of different offers all the time or should we just have a few ongoing offers? Should we spend time on banners for everything or just create text links? Do commission increases work well or are bonuses or gifts better? Do % off or $ off offers work best? Do incentives work, or should we just increase our payout?

The answer is: YES

Very often there's no right or wrong when it comes to the affiliate marketing channel. We're dealing with hundreds if not thousands of different types of sites and each one will have a different person behind it making decisions. There's not going to be that one strategy or one idea that will work for everyone. It's going to come down to balancing these things out and often a lot of trial and error before you can find exactly what works for you. Even then, what works now may not work a month or two months from now. This channel is ever-changing as more publishers join the market and new innovative sites are created.

So what do you do?

Plot out a solid plan that's as best balanced as you can and test it out. See what works. Give a good 2-3 months and then regroup to see where your traffic was best and which offers converted well. Make some tweaks and try again. Make sure to stay in contact with your publishers and get their feedback. Most of them will know what does or does not work for them and their visitors. You'll want to work with some of your top players one-on-one to make sure they have exactly what they need from you. Try plotting out 2-3 different strategies based on the type of publisher and/or how well they perform for you. Talk to publishers about your plan and work out some kinks with them first. Make sure you're plan includes strategies that target as many of your publishers as possible.

And don't forget, it's all about balance!

Affiliate Marketing Can have a Delayed Effect

Too often I am faced with marketers that have it so ingrained in their understanding that there is always an immediate cause and effect when doing online marketing. With affiliate marketing that is not always the case.

For most other online marketing channels, the marketer is speaking directly to the consumer. They send out an e-mail blast and wham! lots of sales come flooding in. They have a good ad out on paid search and their click through rate goes through the roof within a day or two. With affiliates, this just isn't so.

It's hard to retrain these marketers to get them to understand this concept because everything else they live and breath has almost instant cause and effect. What I've found with the affiliate channel is that we tend to see effects one month sometimes up to three months after changing a strategy or ramping up efforts for a program. It can often be a hard sell to convince a client that we just need a little more time. From their perspective, they're paying us to help them make more sales, they're paying the affiliates large sums in commissions and bonus fees and are not yet seeing the desired ROI. This often leads them to pull back on their responsiveness to our requests for the program and then any affiliate marketing efforts become inconsistent - a recipe for disaster.

With affiliate marketing, you're not speaking directly to the consumer, you're speaking to a sales force of online publishers. So a few things have to change. First, any marketing messages, offers or promotions must be prepared in advance so that we have time to get any links, banners and notices out to the publishers and so that   publishers have time to get their own marketing efforts in place.

Secondly, communication with publishers must remain regular and consistent. With other channels, even if you haven't made an effort in quite some time, you'll know that as soon as you send out the next blast or launch the next campaign, you're sure to see a spike in sales. However, with affiliates, if you wait too long, by the time you have that next big blast ready, your publishers have already forgotten about you and are less likely to pay attention to this latest offer. Not only that, but if it's been long enough, many of your publishers have already left you for someone else.

Thirdly, expectations must be realistic. Instant results may not be seen. A new or newly active program can take up to three months or more before any real progress is seen and additional time before you can expect to see large numbers in sales. We can't let that dishearten us and pull back our efforts. This is a long-term investment and when the pieces fall into place it is extremely worthwhile.

My company actually did a recent analysis of an account who's sales had been dropping over the past couple of months. We compared month-over-mont their overall site traffic and sales alongside our affiliate numbers and added to the chart our offer and affiliate newsletter schedule. It was almost unbelievable, when these numbers were charted out like this, that it showed without a doubt that results of our efforts and the efforts on the merchant's part were seen within the month after those efforts took place. For example, let's say the merchant had their biggest month in August, affiliate numbers were highest in September. We also saw this same direct correlation with our offers and communication efforts. It was really amazing how we could so clearly prove our point.

When you think about it, it makes total sense that the affilaite channel should work in this way. A good offer goes out, publishers will pick it up and promote it. Traffic will start to pick up. Publishers see that and then ramp up their efforts more for that particular merchant. Then traffic increases that much more. More publishers see this merchant rising in the ranks and start to pick them up as well - etc. etc. It's a delayed effect. The oppisite is true as well and sometimes even more so.

Point is, give it time, you'll see that this is a worthwhile channel.