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*BCL Performance Marketing: Ethical Affiliate Marketing Australia: Could asking for discount codes on your website be losing you sales?

*Could asking for discount codes on your website be losing you sales?

Part of the process of deciding whether to promote a retailer on our sites is to approach the website as a potential customer and test out the conversion process. One thing I often notice is the box asking the customer to enter their coupon or voucher number for a discount - even on sites that don't offer vouchers. Does your site do that? What effect does it have on your customers?

Put yourself in the mind of your customer. You've had a look around the site, decided to buy at the price displayed and are proceeding through the checkout. Then you see it...

Gift Vouchers/Discount Coupons
Enter Redeem Code ____________________

What? Does that mean that other people get this product cheaper?

So do I just ignore it and continue to buy because I haven't got a code?

Or do I decide to do a quick search on merchantname voucher or
merchantname coupon to see if I can find a voucher and save myself some dollars?

Let's try that. What are the likely outcomes?

a) I search but don't find anything and maybe return to complete my purchase, or maybe go to another shop I happened across on the search.

b) I find a coupon website in the search results, click on that and...
... see no coupons but there are similar sites with coupons so I go there, or
... find the shop but there's no coupon (is this false advertising?), or
... find the shop with an out of date coupon (annoying?), or
... find the shop and coupon, go back to the shop and type it in.

If your customer ever gets to that final stage of returning to your shop and typing in the coupon code, it may or may not be valid. If it's invalid and the customer doesn't get their discount after all their messing around, what will they think? If it is valid, you have just risked a sale and given a customer a discount when if you had left them alone, they'd most likely have just completed the purchase at full price.

To add insult to your injury, as well as giving the customer an unnecessary discount, you will find that...


  1. you've probably paid affiliate commission to the site that you prompted your ready customer to go and look for, and the cost of that commission is on top of the cost of the discount to the customer

  2. if it was a valid coupon intended to track a print advertisement, your conversion figures will be inflated by these people who have never seen the print publication.

  3. if the coupon affiliate cookie overwrite a genuine refering affiliates cookie, you've paid the wrong affiliate for the sale so you risk losing the type of affiliate that introduces new customers and create sales.

So, why is the request for the coupon code on your shopping cart there? Do you really use it? Was it just an option on your shopping cart that was left there just in case? Is it working for you or against you?

If you want to use incentives or vouchers to track sales, or special offers to encourage sales or bigger baskets, there may be better ways to do it.

Posted by Gayle at June 27, 2008 12:30 AM

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Comments

Hi Gayle,

Have you got some suggestions on the process of redeeming coupons and gift vouchers?

Peter.

Posted by: Peter at July 2, 2008 9:22 PM

Hello Peter,

For coupons, I guess it depends what you are using the coupons for. And then working out all the ways people can undermine that and build in some safeguards.

Retailers have always used coupons to track marketing campaigns like an ad in the local newspaper where someone cuts it out and takes it along or sends it in. You can measure which campaigns give you new customers, which prompt old customers to return etc. The internet makes that more complicated when sites post details of coupons from your print campaigns and you have no way of knowing whether the customer ever saw your print ad or whether they just found it on the internet.

There are genuine sites offering coupons - mainly in the UK and USA - where they build a membership base and merchants work closely with them to provide coupons unique to the website. Unfortunately, now there are sites that reproduce those coupons without authorisation. The answer to this could be to find an additional way to track it so the coupon and commission only works if the reader was really refered by the authorised site.

If you are using coupons for anything other than tracking where a sale came from, you might be better making an offer like free postage for orders over $x, or free gift with a certain product etc.

Another thing to ask is whether your market or products suit coupons and whether that is the type of customer you are trying to attract.

If you are a luxury brand or aiming at people who are not overly price-conscious, then coupons could be inappropriate. If you are aiming at the bargain-hunters, then coupons could bring in sales... but perhaps from less loyal customers.

Gift vouchers are more straightforward, and a customer seeing a request for a "gift voucher code" would just assume that it was for people who had a voucher bought for them. Perhaps sending out "gift vouchers" with unique codes so they can only be used once instead of "coupon codes" which can be reproduced beyond your control would be one possibility.

Posted by: Gayle at July 3, 2008 7:32 PM

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