How to Run a Successful Coupon Marketing Strategy for Advertisers

We explore how coupon affiliates can have a significant strategic impact on an advertiser's affiliate program and address common misconceptions about them.

The Basics of Coupons in Affiliate Marketing

Coupon affiliates have been around since the beginning of affiliate marketing. The ways of working with these, however, have changed over time. With the proliferation of online retailers and the ever-increasing move from physical shops to eCommerce stores⁽¹⁾, customers are becoming increasingly savvy when it comes to sourcing products at a discounted price.

Furthermore, the increased competition means that retailers operating online need to constantly pivot their marketing strategies to compete in the eCommerce space.

With most online retailers now offering digital discount codes, advertisers should consider utilising coupon marketing to draw in new customers, retain their existing customers and ultimately build brand loyalty.

What is Coupon Marketing?

For advertisers and brands wanting to increase their sales, boost customer loyalty, and attract repeat customers, coupon marketing has been a tried-and-true marketing strategy for over a century. Asa Candler, the founder of Coca-Cola, was the first retailer to create a coupon campaign, taking Coca-Cola from an insignificant tonic into a market-dominating drink⁽²⁾.

Since then, coupon campaigns have gained further popularity taking advantage of the consumers' desire to save money, by offering products and services at a discounted rate. Regardless of the business type, advertisers can leverage coupon marketing strategies for further brand success.

Coupon marketing is one of the most effective marketing tools advertisers can adopt, with statistics showing that 77% of shoppers spend $10- $50 more than anticipated when redeeming discount coupons. Furthermore, 59% of consumers stated that of all the deals an advertiser can offer, digital coupons are the most influential when it comes to affecting their shopping habits⁽³⁾.

How to Devise and Implement a Successful Coupon Marketing Strategy

Research

Before an advertiser begins any marketing endeavour, they should first evaluate the current climate in their industry to envisage how the proposed strategy will land.

By conducting extensive market research, they can determine the following information:

What are their competitors doing to reward customers? What is working in the rival customer journey, and where could improvements be made?
The ideal expiration date for coupons sent out to consumers within their industry.
The ideal value of the discount code
What affiliate partners are promoting relevant competitors

Create Coupons to Suit the Season

Once advertisers have segmented their clientele and decided which group will be targeted for which coupon campaign, they should then create a scheduling calendar with coupons for various dates throughout the year. This can be simple as promo codes for Christmas shopping or as bespoke as promo codes celebrating landmarks in the business history.

Track Conversion Rates

Tracking the conversion rates of a coupon campaign is essential for any business wanting to understand its customers' needs. Promo codes allow enterprises to monitor the results of coupon campaigns and optimise customer deals moving forward.

Online Coupon Marketing: Considerations

Any business, regardless of the size or industry, would be remiss if they did not research any marketing strategy they intend to employ.

Advertisers looking to employ coupon marketing should consider the following:

While 97% of retailers state that offering customer discounts is their primary pricing strategy⁽⁴⁾, experts have noted that if used incorrectly it can have the adverse effects of devaluing the brand in the eyes of the consumer⁽⁵⁾. However, when best practice is followed, coupon marketing can actually strengthen the brand's reputation.
Particularly when it comes to repeat customers, the use of coupons must be done strategically rather than always-on, while also considering profit margins and offering discounts only where it makes sense for the business.
By including pop-up offers in the checkout area of their website, many companies have found that customers become distracted, leading to a much higher cart abandonment rate. Consider where maybe a more appropriate place to include such offers for maximum ROI.

How To Run a Successful Coupon Affiliate Strategy

Now that we have covered the basics of coupon marketing let's explore how coupon affiliates can have a significant strategic impact on an advertiser's affiliate program and address common misconceptions about them.

Where are coupon affiliates located in the Conversion Funnel?

For a strong affiliate program, advertisers should work with a diversified portfolio of affiliates. Advertisers can glean more information about its merits in The Importance of Diversification for your affiliate program. A diversified program works with affiliates from each section of the conversion funnel.

Coupon affiliates are naturally located at the bottom of the funnel, as consumers visiting these sites are ready to make their purchase. While it can be argued that working with coupon affiliates teaches consumers to wait for discounts, there are strategic ways for advertisers to counter this.

Common Misconceptions about Coupon Affiliates

Below is a list of frequently asked questions by advertisers, with their associated answers:

Q: I am concerned I will train customers to wait for a discount. Will this be the case if I start working with coupon sites?

A: It is not necessary to have coupon codes all year round. If changing customer behaviour is a concern, we would recommend creating coupon codes at different times of the year with no clear patterns, so consumers will not be able to discern when the next discount will be on offer.

Q: My program is focused on new customers. Will coupon sites be able to help with this?

A: Consumers tend to break their shopping patterns to get the best price for a product. A coupon can help attract new customers⁽⁶⁾ . Most coupon sites have big databases and social media followings that can be used to reach new audiences. Some of our affiliates are driving more than 60% of new customer orders for specific advertisers on the network.

Q: Will coupon affiliates cannibalise sales that I would have received anyway?

A: 76% of customers abandon the shopping cart. The most common reason is that the extra cost for shipping is too high⁽⁷⁾. If these customers find the product cheaper with a competitor offering a coupon code for free shipping, that customer can be lost to the competition.

Q: Will coupon affiliates take sales off other affiliates on my program? Specifically, content sites?

A: Commission Factory tracks in-program attribution, which can be used to keep an eye on this. We would suggest working with a few select coupon sites for a three-month period and then analysing the results.

Q: We cannot afford to pay the commission rate as well as give a discount. Will this eat into my margins?

A: Commission is paid on the discounted price. If margins are a concern, we would recommend setting up a coupon code with minimum spend or product/category exclusions. Alternatively, a bespoke commission rate can be discussed with the coupon affiliates.

Q: Will coupon sites add value to my affiliate program?

A: Coupon users are typically affluent, young and educated – a target group you might want to build a relationship with early on. Working with coupon sites is an effective way to increase the average order value (AOV) of the affiliate program by setting up coupons with a maximum spend higher than the current program AOV. Coupon sites can also help clear old inventory.

Q: Will coupon sites increase my brand's visibility?

A: The right coupon affiliates will increase your customer conversion, reduce cart abandonment, and optimise your overall marketing strategy. Commission Factory ensures that affiliates in our network are vetted through an in-depth application process, which ensures quality and quantity. All our coupon affiliates have strong organic search rankings so that brands are highly visible, and brand bidding is monitored daily to ensure coupon partners are not overriding brands.

Q: My affiliate program is good enough. I don't need coupon sites.

A: Brands that don't incorporate coupon marketing into their strategy may miss out on targeting new consumers and increasing their revenue. Consider these two examples below:

Savvy shoppers may not consider purchasing from a brand unless they get a reward or a discount.
Larger coupon sites work with content publishers to engage consumers, and brands may lose an opportunity to leverage the existing brand awareness of that publication.

Coupons do not always have to be a flat percentage of a product. Instead, they can also be free shipping and discounts on second-item purchases. So there are many ways to increase sales by adding coupons as part of your promotions.

Q: We are very brand conscious and do not want to be seen as a cheap brand. Will working with coupon sites hurt the brand image?

A: Working with coupon sites does not mean offering coupon codes all year round. Coupon codes should be created for a specific purpose, such as getting rid of old inventory or last season’s stock. Additionally, a lot of coupon sites offer content pieces rather than just listing codes or promotions. Coupon sites spend a lot of time improving their SEO rankings. Being featured in one of their content pieces can drive additional traffic to your site.

Q: Will I lose control over the volume coming through for discounted sales if I opened the program up to coupon sites?

A: Most of the more established coupon sites have the functionality to promote unique codes, which have a one-time use. This ensures that a code can only be used once, even if it goes viral. We recommend supplying the affiliate with a set number of unique codes you feel comfortable with.

Deep Dive into Different Coupon Affiliate Strategies

Before assessing different strategies, advertisers should check that coupon data is being passed back to Commission Factory through the tracking pixel. This allows for better insight into the impact of the coupon strategy and enables our clickless code feature, which we will look at in more detail below. We recommend aligning the overall business goals with the coupon strategy for the best impact.

1. Selecting Coupon Affiliates to Work Closely With

For an effective coupon strategy, working with every affiliate in the market is not necessary. For a controlled and strategic approach, we recommend advertisers work with select coupon affiliates and have close and regular contact with them.

2. Offering Exclusive Codes to Affiliates

Offering an exclusive code to coupon sites can lead to additional promotional opportunities. Often, the affiliate can provide newsletter placements and/or more visible exposure across their website if an exclusive code is offered. While running an exclusive code offering the best discount in the market at that time is recommended, this is not always possible. Sometimes a vanity code will suffice (a deal running in all channels, which features the name of the affiliate). Effectively this creates the illusion of exclusivity to the customer without offering a higher discount.

3. Affiliate Coupon Sites and Paid Search Campaigns

Most coupon affiliates offer to run paid search campaigns for advertisers in combination with an exclusive coupon code. There is no fixed fee needed for this. However, whether an affiliate can offer this type of promotion to an advertiser depends on profitability, as the affiliate needs to cover pay-per-click costs.

If an advertiser is looking to get rid of old inventory, we recommend consulting the top-performing coupon site about running a paid search campaign alongside the coupon code. An attractive offer that is strategically aligned with other campaigns can significantly boost performance. The coupon site bids on an advertiser's trademark + coupon or trademark + coupon code terms for the duration of the exclusive code. The affiliate can effectively push out competitors' ads and improve their position on search engines.

4. Incorporating Affiliate Content and Coupon Sites

Most coupon sites write content in addition to their offers/coupons section. When an advertiser is not running an offer, we recommend making use of the content offering to stay front-of-mind with the affiliate's user base.

Some coupon sites function as coupon white labels for major content publications. While this is a coupon/promotion strategy rather than a content strategy, it still means being featured and reaching the website visitors of those content publications.

5. Working with Non-Coupon Affiliates

Having a coupon strategy does not necessarily mean working with coupon affiliates. Developing relationships with the best content affiliates/influencers and offering them exclusive codes can achieve great results.

Commission Factory's clickless code technology allows sale attributions to affiliates even if no click is recorded. Instead of a click, the code itself becomes the identifier for the affiliate sale. This expands the ways of working with affiliates, such as having Instagram influencers promote an exclusive code in their Instagram Stories.

Summary

Working strategically with coupon sites can add value to an advertiser's program, and there are multiple ways to work with this affiliate type. It is essential to have an open dialogue and align the strategy with the overall business goals to have the desired impact.

If you're an advertiser looking to implement a successful coupon marketing strategy, Commission Factory can partner you with the right coupon site affiliates.

Commission Factory is not only the Asia-Pacific region's largest affiliate network, working with more than 800 of the world's biggest brands, but it is also a performance marketing platform that allows content creators, affiliates, and partners to earn money and retailers to increase sales.

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