#HowTo – How to Implement a Custom Coupon and Coupon Affiliate Strategy

Coupons and coupon sites in your affiliate program: it’s a complicated topic with a lot of moving pieces.  This articlewill not teach you how to find top coupon affiliates, how to get placement on their sites, how to negotiate for better placement and stronger promotion, or how to develop coupon site relationships; I’m going to make the assumption that you already have, at least, a theoretical understanding of how to do those things.  So….How do you decide on and implement a strategy that fits your needs and helps you meet your goals?

I am a big proponent of questioning yourself in a productive manner.  I don’t mean second guessing your decisions or falling into a trap of inaction.  I do mean that you should constantly ask yourself questions such as: What is my goal?  What am I doing to accomplish that goal?  Is my current strategy in line with my goal?  And, What do I need to do to ensure my actions work to reach my goal?

If you are interested in top-line sales growth only, your strategy is simple: work with every affiliate site you can find (of all types), blast out new coupons every couple of weeks that are valid for at least a week, offer aggressive customer deals, embrace loss-leader promotions (sporadically), and keep the discount and coupon content fresh.  You’ll find yourself receiving tons of placement on all types of coupon and even non-coupon sites.  You will also find that the sales you are driving through your affiliate program are discount-focused (obviously).

If you are interested in driving sales that are focused on ROI and of incremental value, you need to craft a more strategic (and yes, complicated and time consuming) strategy for working with coupons and coupon affiliates.  If you continue reading past this point, I’ll be assuming you are interested in the latter answer to the above question.

Ready for the labor intensive part of this exercise?  Here we go.  First you need to login to your affiliate interface and run a report, by individual affiliate, for a good portion of time.  Let’s choose YTD (if it is not yet late enough in the year when you are doing this exercise to run a meaningful YTD report, choose a different date range which will ensure you receive a significant amount of data in return).

Now let’s organize this data according to affiliates who have generated at least one sale in this time period (affiliates who are driving clicks and impressions are important as well, but we will exclude them from consideration in this exercise only).  Export this data into Excel (or whatever open-source version of it you use).  You’ll want to keep columns to identify the affiliate, and for their YTD sales.  Add a third column for percent of total sales and put in the appropriate formula to calculate this value (this also isn’t an Excel How To article).  Finally, add a fourth column for Type of Site.

Now we need to do some manual digging.  Locate each individual affiliate site from your reports and decide what type of site it should be classified as.  Some of the more common classifications will be: Coupons, Deals (yes, there is a difference), Blogs, Content, Reviews (yes, there is a difference between those three as well), PPC, Email, Social Media, etc.  There are certainly other types of sites and marketing methods used by affiliates –  the list here is meant to be representative rather than exhaustive.  Customize your site classifications based on what you find in your program.  As you decide on what category each affiliate site falls into, note that on the spreadsheet you have been building.

A few important notes:

1. This exercise is not about minute detail.  Rather, you want to create the best representative list you can.  Don’t fret over a site classification if there isn’t a perfect fit.
2. Yes, this is a time consuming process.  It is also an important one due to the amount of information, clarity, and insights you will gain about the actual workings of your affiliate program.
3. Some affiliates use multiple promotional methods, site types, and marketing tactics.  See Point #1 above.

Once you’ve classified all of your affiliates, add another column to your spreadsheet and total the revenue generated by each classification.  Now, run another formula to tell you the percentage of total sales that is being generated by each classification.

With these two formulas in place, you can now see which individual affiliates contribute the most revenue to your program, as well as which classification of affiliate contributes the most revenue.

You can generate all the information you need just through this exercise.  However, if you have access to more advanced analytics (such as Google Analytics, etc.), you can go a level deeper.  Assuming you have access to this data, compare the affiliate sites from this exercise to those found as referral sources and revenue sources found in your analytics program.  What you want to look for here is WHERE in the conversion process of your top performing sites interacted with the customer.  Since we are focusing on coupon strategy for this article, you will want to find out if the customer is originating at a coupon site, if they are visiting a coupon site before coming to your site (even if they did not originate on that coupon site), or if they are visiting that coupon site during their purchase process with your site.  (If you don’t have access to this type of deeper analytics, no worries!  I have a hack to share with you towards the end of this article!)

Now let’s go back to our original list of questions, only now we are doing so armed with a powerful combination of decisions and data.  You already decided on your goal: to generate ROI and incremental sales.  Now the data can show you if the reality of your affiliate program is in-line with your true goals.  For the sake of this article, let’s assume that you find that your current reality is not properly aligned with your goals.

With the labor intensive step checked off, it’s time to start digging into strategy and options.  There are a myriad of ways you can craft your coupon strategy, I’ll list a few of the more common methods below.  Before reviewing that list, it is important to note that these examples all focus on changing the rules for coupon usage in order to keep in line with the examples and decisions illustrated in this article.  Your research could, of course, show you that you are underutilizing coupon sites and need to expand your presence in that space.

• Remove 100% of coupon affiliates from your program and offer no coupons whatsoever
• Partner with a select few coupon affiliates and provide them with exclusive coupon codes
• Partner only with coupon affiliates who provide an easy two-way-street of communication between yourself and their site
• Reduce commission rates for coupon sites
• Make sales that use a coupon code non-commissionable events
• Change sales that did not originate at a coupon site, but that used a coupon code, to be non-commissionable
• Split the commission payment among multiple affiliates who were involved in the sale, if there were multiple different customer touch points
• Pay the commission to the affiliate who generates more long-term customers
• …and on, and on down the list.

As you can see from the above, the coupon strategy you choose is limited only by your ability to clearly describe what you want (and some technical limitations which can often be worked around).  The real question in this step is, how do you know which strategy is right for you?

It’s time to go back to the data and your original goals.  Remember our assumptions as we progressed through this article: 1) Your goal is to generate ROI and incremental sales, and 2) You found that the lion’s share of sales through your affiliate program do not currently meet that goal.  Through this article, I unfortunately cannot tell you if Option 1 is better than Option 5.  Every scenario is different, every piece of data matters, and every choice will have a different effect on your program.  You must think through the options, the strategy driving each, and ultimately, your decision’s alignment with your goal.

Now that you have decided on a new coupon and coupon site strategy, let’s talk about how to implement it within your ShareASale program.  Don’t worry; this step is much easier than everything you have read up to this point!  For the sake of having a workable example, let’s implement the following new strategy:

1)      I want to work with coupon affiliates

2)      I do not want to pay a commission if they are involved only at the very end of the checkout process. 

The will be very easy to implement within your ShareASale program, but will go a long way towards ensuring that the sales generated in your affiliate program are aligned with your goals.  Again, please note that this is an example only and I highly recommend doing your own research and coming to your own conclusions before implementing any changes to your affiliate program.

First, let’s login to your ShareASale account interface.  From there, click on My Account in the top nav.  Now, Edit Settings.  On the right of the page, you’ll see a hyperlink for “Manage Advanced Commission Structures”; click this and you will be taken to the command center (not it’s official name, but this is the page where all the magic happens!).

As a quick side note, ShareASale has programmed in a variety of predefined rules that you can implement with two clicks.  Do you want to create an incentive where any affiliate in your program who generates their first sale earns a $50 commission bonus?  Click on the link for “$50 First sale bonus” and it will appear as a new line item at the bottom of the page.  Click Save Changes, and you are done.  With only two clicks, you implemented a strong bonus campaign!  Now just be sure to tell your affiliates about it…

Okay, back on track with our actual example…Click “Add New Rule”, found at the bottom of the page.  You can now give your rule a name.  We’ll call this one “Coupons”.   Under “Commission Action”, select “Set to Percentage” and type “0” (that’s a zero) in the text field.  I should also mention this example assumes you pay your affiliates a percent of sales and not a flat dollar amount per sale.  Leave the “Stop Processing More Rules” selection set at “No”.

Now, click the green plus sign next to “Add Condition”.  This is where we will define our rules.  From the drop down menu, choose “Commissioned Click Matches Pattern”.  In doing so, a variety of new options appear.  The first drop down should be either Greater Than or Greater Than or Equal To.  For the next set of options, I would recommend fifty-nine seconds.  Finally, leave the last drop down menu as the default of “use oldest contiguous click”.  Ultimately, your new commission rule will read:

Set percentage to 0 if Commissioned Click is not greater than 59 Seconds old.

With only a few clicks inside the ShareASale interface, you have just updated your commission rules so that no affiliate will be compensated if they send a visitor to your site, who makes a purchase, within 59 seconds of their click-through.  59 seconds is simply a recommendation based on the examples used throughout this article, but that window should be long enough to permit a customer to reach your confirmation page AFTER having entered a coupon code.  What we have done with this strategy is prevented an affiliate from earning a commission if the customer is mid-checkout, but pauses their process to search for a coupon code (likely because they saw an “enter coupon” text box in your shopping cart), and clicks on your link on an affiliate site in doing so.

As mentioned previously, there are nearly limitless options and combinations for different coupon strategies you can implement.  This exercise has been completely hypothetical, but is designed to show the ease of physically enabling a new coupon policy once you have decided to do so.

What if you want to have clear visibility into where coupons are getting picked up in the conversion process, but you don’t have advanced analytics installed on your site?  Here’s a simple solution:  follow the steps in the above example for changing commission structure when a coupon site’s link is clicked within a small window of order completion.  However this time, we need to change two key variables:

• Instead of reducing the commission rate, pay a bonus of $0.01.
• Instead of choosing “greater than or equal to”, choose “Less Than”.

Now, whenever your reports show a $0.01 bonus paid out with a transaction, you know that a coupon code was picked up within 59 seconds of the customer completing their checkout process.  At a payout of a single penny per instance, you can track 1,000 redemptions for $10.  Of course, once you have that valuable data in-hand, go back to step 2, analyze your data, and make strategic decisions.

The key to any long-term strategy and any successful affiliate program is to grow by implementing improvements which align with your ultimate goals.  There are numerous considerations to be evaluated, there are significant amounts of data to gather and analyze, and there are various potential outcomes to hypothesize over before making, and implementing, your final decision.

I would also like to state that all affiliates have the opportunity to bring true value to your program.  No blanket assumptions or actions should ever be implemented before considering the different routes you can take to reach your goals through involving both your current affiliate partners, and new affiliates.  While it is of prime importance to make strategic decisions and follow the path you create for yourself, it is also equally important to forge partnerships, to work closely with affiliates who will help you reach your goals, and to always be furthering relationships in a positive manner.  Affiliate marketing is a unique industry which allows you to grow with limitless potential through vastly unique partnerships.  The opportunity to align those strengths and resources with your goals is what makes it so exciting.