Affiliates and the Problem of Last Minute Coupon Search

I have received an interesting email from a Europe-based affiliate program manager. Here’s an excerpt which reflects its essence (image, obviously, introduced by me):

I’m an affiliate manager for [company name here] and my goal is to find out if it makes sense to use a cookie blocker to avoid paying commissions to couponing websites for users who were already browsing our website but opened a new tab to check if couponing offers are available for us.

What is your take on this? Do you find it fair? Would you recommend it? If so, could you recommend good resources that deal with this issue (for example, what is the best way to implement it)?

This situation certainly isn’t unique. Many affiliate programs (including giants like Zappos, for example) choose not to work with coupon affiliates altogether.

However, if your concern — one that I, personally, believe to be 100% cogent — is specifically about those customers who leave your website during the shopping process to look for coupons, find the most attractive one on an affiliate site, click an affiliate link (which sets the cookie which ultimately triggers affiliate commission), and only then place their order, then there’s a much better solution than looking towards “a cookie blocker” (which, in most scenarios, won’t be acceptable anyway; and no, I wouldn’t recommend going that route). I call it “The Macy’s Solution”. In March 2010 they implemented a simple, yet a tremendously effective solution to the problem of last minute coupon search. Right next to the “Have a promo code?” box on the shopping cart page, they added a small “Find one now” link. Here’s how it looks now:

Once you click the link, a pop-up window appears — featuring their current coupons and deals:

So, the end-user can then review all of these without leaving the merchant’s website (and no affiliate cookie is being set unless they were originally referred by an affiliate). Macy’s haven’t disclosed “how much the change boosted sales” they did state that “it was far larger than we thought it was going to be.” [source]

By the way, both this situation, and a number of other coupon-related problems were covered in my recent Advanced Affiliate Program Management & Analysis presentation at Affiliate Summit West 2012. You may find the slide-deck for it here, and a companion blog post here.

15 thoughts on “Affiliates and the Problem of Last Minute Coupon Search”

  1. That really is the best solution, good to see the way you advised to handle it. I have quit or not joined programs when I find a promo code box in their checkout when there are no coupons for affiliates, because that means I can’t send shoppers with the code and they can easily find hundreds of thousands of affiliate sites that claim to have the promo code. If the merchant wants to offer a promo code, make it accessible from the cart without costing the commission of the affiliate that sent them the customer. There are lots of coupon sites that originate customers, so blocking them all is not the answer, but if I sent you the shopper I should have some chance of getting my commission.

    1. Great points, Nancy! It is good to see an affiliate‘s take on this one (quitting or not joining programs that display that “promo code” box during the checkout process) — a strong but 100% sensible one.

      Your comment has also just given me an idea for another post on a related subject. Stay tuned… (and thank you for the idea).

  2. Geno, excellent article. I thought this was a really aggressive move by Macys and am not surprised it’s saving them a ton of money. I wish more merchants would do the same!

    I’m constantly running into merchants with a prominent “promo code” box, no “affiliate-approved” coupons, and yet dozens of coupon sites claim to have eligible offers (and sometimes they really work). The merchants say they’re not allowed to post those but do nothing to enforce their own terms. It’s a conversion rate KILLER.

    From the customer perspective, they might be a little annoyed to have to go off-site but as long as they save a buck they’re happy. The Macys strategy keeps them on the site and in general provides a much more fluid checkout process!

  3. Why not just hide the coupon box? It helps 🙂 Imho having a large flashing in red “Have a promo code” just screams to me that there is a promo code and I should look for it. Sure the find one now helps but it will still eat into profits + frugal shoppers will try to find better offers offsite.

    I’ve also seen merchants split the commission in two (e.g. pay 80% of the commission to original referrer and 20% to coupon site.)

    1. Ah, Kush, you’ve just covered a part of the new post I had in mind. Your solution does work very well, but for a slightly different situation. I will still put together the post I’ve planned, and elaborate on this in it. So, look out for it within the next few days.

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  5. I read an article from Internet Retailer that said shoppers believe they can get a better deal on coupon code sites then they can get on the merchants website. So even if you have the coupon popup, I still think people will go out searching their favorite coupon code sites for the best deal possible. However, I like what Macy’s is doing and trying new ways to solve the coupon affiliate problem.

  6. Hey Geno,
    Thanks so much for this post. I really like the solution that Macy’s uses here. I run a program where we’ve decided to remove coupon affiliates from the program similar to Zappos. But I’ve never really been happy with that solution as it’s just cumbersome to maintain and I have to constantly check the tactics of affiliates to see if they are too heavily relying on coupons that get picked up once a customer is already in the cart.

    I looked for your followup post and didn’t see anything, did you end up writing it? Would you mind sending me a link?

    Also, I read your book cover to cover about program management and it has massively influenced the way we run our affiliate program, so I just wanted to thank you for that!

    1. Justin, glad you liked their solution (so did I, obviously). I wasn’t planning on doing a “followup post” — sorry, not exactly sure where the expectation came from.

      As for the book: I really appreciate your compliments, and glad you’ve found it of such help. Things like these are always of tremendous encouragement to me. Thank you, Justin. If you have a moment to leave a quick review of the book here, I would really appreciate it. Many thanks in advance.

      1. Hey Geno,
        By followup post, I meant the post you referenced in an earlier comment about writing a post on a related subject…

        Yeah, I’ll definitely leave a review although the book I read was your older one.

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  8. Geno, Good delivery of the question and definitely some excellent responses from the commenters.

    What we have faced in working with lots and lots of programs- are as follows:

    1. Our own primary research shows that over 70% of consumers use online coupons, the wealthiest of the over 1,700 people surveyed, use online coupons over 80% of the time.
    2. Our research also went on to show that the people who use coupons bounce out of the site when they see the coupon code box in the checkout over 75% of the time.
    3. The Macy’s solution doesn’t necessarily convince the consumer that they are getting the best deal. Consumers will continue to use their favorite coupon site to make sure they are getting the best deal.
    4. We have seen numerous times when an advertiser builds their own coupon page, the consumer still does not believe they are getting the best deal from the advertiser, no matter how it is phrased, and hence they continue to bounce out looking for a better deal.
    5. Dynamically removing the coupon code box from the site unless the consumer has a coupon in hand from a bonafide offer or email is technologically challenging for many of our customers. You can remove the coupon field altogether, but then you can’t easily manage the site when the advertiser wants to be aggressive during seasonal sales times.

    And this is the tip of the iceberg of what we face every day as you know.

    How we have been dealing with these kinds of questions from our clients for the last 4-5 years I can outline as follows: If the affiliate does not provide value in the form of good content, placement or new-to-file, lower the payouts to a level for those affiliates, that allow the advertiser to take advantage of the affiliate helping in the closing funnel.

    This methodology has worked for us and our clients. Advertisers may want to consider a form of this plan as they grapple with the channel.

  9. I tried to add this to your Linkedin feed, but for some reason it wouldn’t take, so I am offering it here as a response to a discussion on new-to-file acquisition in the affiliate channel:

    The concept of new-to-file is worrisome. Looking at how many new-to-file customers come from a particular channel is difficult when it is estimated that a normal consumer route to purchase involves between 7-11 touches involving paid search, SEO, social and affiliate. So how do you easily and accurately determine the originator of new-to-file, who actually “caused” the consumer to purchase right at that moment. What if they were watching TV and saw an ad for a product and bought it. How is that determined in the online deal flow.

    And, when we ask our customers who are concerned about new-to-file from the affiliate channel, we ask them what their best channel is. In almost every case, the affiliate channel ranks right up there with PPC.

    Basically it is hard to get completely new-to-file customers. It is really hard to get visitors to an advertiser’s site to buy given that conversion rates are typically in the 2% to 4% range. Can the affiliate channel properly managed provide an essential tool for acquiring new customers and helping close transactions at an affordable cost… definitely. IMHO

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