Moose on the Loose

There are currently 12 responses to “A Flipside to Voucher Codes With a Twist”

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1. 1 On January 31st, 2008, Rob Berrisford said:

   Is this not already being done with tiered commissions and increased commissions for cirtain products? I.e. Seatwave are paying 12% on Six nations tickets.

   I remember being incentivsed on average basket before, but i can’t remember by who.

   Is this not the same thing? or am i being stupid?

2. 2 On January 31st, 2008, Paul said:

   In the public details Seatwave doesn’t show as having anything else than a single commission structure. Thus no tiered commission. Though it would be nice that it was mentioned about the 12% incentive too.

   Though tiers are good, it doesn’t necessarily follow that a merchant will publish a voucher code or not.

   Put is this way, if a merchant published a code like this actual example “Currys Discount Code! 5% off all orders over £50!”. Wouldn’t you like the option of either passing the 5% to the consumer or the 5% in your back pocket.

   BTW though i haven’t checked whether use of the discount code also reduces the total commission by 5% of the actual commission.

   Granted it is a consumer offer, but perhaps more thought should be given to affiliates overall when driving specific products.

   It would be interesting experiment to see if the uptake of offering the affiliate the reward versus the use & uptake of the discount code, to ascertain which actually yields more sales or new customer acquisitions for the merchant.

3. 3 On January 31st, 2008, Alyssa said:

   Hi Paul,

   I offer voucher codes every month. I have tried in the past to offer a tiered bonus structure on top of my tiered commission structure for a limited time, but I didn’t get too many bites. It seems that the affiliates want the offers to increase conversions instead of bonuses. This was reiterated in one of the keynot speaches at CJU last September.

   From a merchant’s point of view it would be better to offer the affiliate the commission so that the offers don’t conflict with other sales channels.

   Love the blog Paul!
   Alyssa

4. 4 On January 31st, 2008, Paul said:

   Hi Alyssa,

   I hope you are well. Thanks for the reminder, I was meant to give your program an extra push on Webgains as I know from our experience it was a decent converter.

   What was the general consensus, if both were applied simultaneously, off-setting one against the other?

   Consider this as giving myself a proverbial kick up the backside. Am I correct in assuming that your product can be shipped worldwide allowing affiliates to promote in multiple territories?

   All the best … Moose

5. 5 On January 31st, 2008, hero said:

   vouchers are meant as a customer incentive, as Alyssa says, to increase conversion. On top of customer incentives, there are the affiliate incentives rewarding upon specific actions and not just a generic conversion. For instance, you get more commission if it’s a new customer, more commission for selling specific products, different commissions for varying basket values etc.

   the only time the voucher is considered an affiliate incentive is when you offer it to specific affiliates only

6. 6 On February 1st, 2008, Around The Affiliate Blogosphere (w/e: 1st Feb 2008) · Affiliate Quanda said:

   […] has posted an interesting flipside to voucher codes, which could be used as an affiliate […]

7. 7 On February 3rd, 2008, Paul said:

   Hi Hero (Award Winner),

   Let me elaborate further,

   I did mention that vouchers are primarily a customer incentive, The purpose of the blog entry is to look at it from a different angle. as often if the customer incentive is flipped on it’s head it would be an extremely attractive affiliate incentive. Take one of many examples out there like the aforementioned Currys voucher. Now tier one commission for this program is 2%.

   The customer voucher / incentive is : If a customer spends over £50 they get 5% off their order. Thus if the customer spends £1000 the affiliate receives £20 commission, now this could possibly be reduced 5% taking into consideration the voucher, hence the affiliate receives £19 instead of £20.

   Now flip this on its head, so that the affiliate earns an extra 5% instead for orders over £50. For that same customer spend, the affiliate now receives 7% commission! That equates to £70 commission! A 250% increase in commission for the specified period.

   What do you think will motivate a majority of affiliates more? Quite simple really?! I would be fairly certain this would generate more sales & new customer acquisitions than a voucher which only a minority of affiliates promote.

   Even if a specific product or range of products, the same theory still applies.

   Part of the problem is that the customer incentives are less attractive to promote than the affiliate incentives. With tiered commissions you are lucky to receive a 1% or 2% increase and a lot of the time there are just small cash bonuses which don’t equate to anything as competitive or comparible.

   If anyone wanted to be pernickety then you could split the difference, 2.5% for both the customer & the affiliate.

   It ain’t rocket science, it’s maths!

8. 8 On February 3rd, 2008, hero said:

   I understand what you’re saying, but I don’t agree with you that it will actually be effective to get more high value orders. It certainly will attract the affiliates’ attention, and their promotions, but whether it converts and if it does do so in the desired manner, it’s out of the affiliates’ power to control.

   Affiliates cannot make a customer convert if they don’t want to do so, no matter how hard they push them. Otherwise, the most awful of sites paying a high enough commission would convert like crazy! Furthermore, affiliates cannot control how much the customer actually spends when they shop. (which is why I disagree with tiered structures based on revenue generated or commission earned – I believe that number of sales is what affiliates can generate)

   These affiliate incentives are cetrainly valuable and should be considered, but in my opinion only if combined with a customer incentive, so as to make sure they do actually convert. However, this means that the merchant is reducing margins quite drastically. So, if they had to choose between the 2 incentives, I think it’s fair to say they will select the customer one. At the end of the day, that’s what you want – converting customers. Paying 50% commission from a site that does not convert is a good incentive for you to try out the merchant, but not good enough to keep you onboard. (and, let me clarify – I am a strong anti-advocate of defining commissions based on conversion rate)

   If the merchant wants to increase AOV from the affiliate channel, they need to entice the customers to spend more, not entice the affiliates to push the high value products from their range (and obviously not inflate their prices for affiliate customers!).

9. 9 On February 3rd, 2008, Paul said:

   Hi,

   I will try and elaborate still further if I wasn’t very clear.

   £1000 is used as a nice round figure for illustration purposes so it’s nothing to do with just high ticket value items pr high AOV.

   Perhapsit have been easier if I said 20 sales of £50 items (not a high ticket value) or 10 x £100. The result is the same.

   By offering the customer discount vouchers the merchant is reducing profit margins too, so I am not sure where you are coming from if it equates to the same amount.

   What would a merchant prefer 100 customers from using a customer voucher incentive or 500 customers from an affiliate incentive, each having equal affect per customer of the merchants profit margin?

   As an affiliate I know which one I would deliver on.

   If you want the best of both worlds, go with my last paragraph by offering a combined affiliate & customer incentive “you could split the difference, 2.5% for both the customer & the affiliate.”

   Realistically what proportion of shoppers use a discount codes or cashback? I am not saying these type of sites don t do well, as some affiliates thrive very well indeed from this and there are top quality affiliates around.

   To summarise it’s nothing to do with high value items.

   Its for illustration purposes! wrt to the extra revenue an affiliate could earn themselves or sales for the merchant.

   The customer voucher could be 10% of any Toaster at £20, the affiliate incentive would be an extra 10% on Toasters sold.

   To reiterate, it’s nothing to do with high value ticket items specfically.

10. 10 On February 21st, 2008, Alyssa said:

    Hi Paul,

    Sorry for the late reply on this, I guess I’m the one who needed the kick! 🙂 We currently ship to 17 countries, so you do have a range of places in which you can promote, but it’s not everywhere(we are working on that one!)

    The way I look at this debate is that as a merchant I would like to be as flexible as my margins allow. If an affiliate would prefer to push our vouchers so that they might get better conversions, then i will provide voucher codes as often as I can. If an affiliate would prefer to receive a bonus and not promote the voucher code, then why not give them the money instead? It’s a little more work, but what am I here for. 🙂

    All I ask for is an affiliate who will work with me to promote our brand correctly and assist us in getting sales in exchange for a commission that we can all live with. That’;s what this crazy business is all about, yes?

    Have a great day!

11. 11 On February 21st, 2008, Paul said:

    Alyssa,

    Your talents are wasted in the USA, no insult intended, you’re the kind of lady that we want over here as part of some of the excellent affiliate manager teams we are fortunate to have.

12. 12 On March 2nd, 2008, Alyssa said:

    I am just glad that I can answer the math question required to answer the blog posts. 🙂

    Seriously, thank you for the compliment. I try to understand this channel from both perspectives and react in a way that works for everyone. If everything works as it should, then everyone should win at this, right!

    I hope to see you again in October Paul!
    Alyssa

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