Effective Voucher Code Implementation

A4uexpo London 2008

15th October

Panel Participants

• Richard Clark • Marketing Manager, DSG International PLC

• Chris Frost • Director, ColdSnail

• Duncan Jennings • Founder, Vouchercodes.co.uk

• James Little • Head of Affiliate Development, Affiliate Future

Panel Moderator

Hero Grigoraki • Client Services Manager, Webgains Ltd

What are vouchers important for? Where are they used?

•New customer acquisition•Customer retention – reactivation – reward•Shifting stock (tactical marketing)•Campaign response measurement•Credit crunch upon us – more customers actively looking to save money

Vouchers can be advertised offline to be used onlineVouchers can be advertised online to be used offline (in store) very limited take up in the UK, highly popular in the USUsually vouchers are used by retailers, however we have seen service providers offering them as well. Sole sector not able to benefit from vouchers is Finance, due to FSA restrictions.

Some merchants choose not to distribute vouchers at all. Reasons:•Not wishing to approach “bargain hunting” customers•Wishing to be perceived as full price or exclusive merchant•Brand perception – business approach

Also, certain merchants exclude voucher affiliates from joining their programs. For most merchants, vouchers are an important tool and voucher affiliates are an important part of their affiliate mix.

With the economy slowing and prices rising, everyone is on the lookout for a bargain. Vouchers have become a popular way of promoting discounts, particularly around Christmas time. In fact, they have become so popular that price sensitive shoppers are

looking for them in increasing numbers.

Robin Goad – Research Director, Hitwise

“Online vouchers prove popular in bargain-hungry Britain”

Shoppers are going crazy for voucher codes

Who are the voucher sites? Which affiliates use voucher codes and how?•Voucher specialist sites

•Content sites

•Price comparison

•Email marketing

•Cashback/Loyalty sites

•User generated content

•Even PPC affiliates can use vouchers effectively

There is no such thing as “voucher affiliates” – vouchers can be used effectively by all types of affiliates. Moreover, no affiliate restricts activity to one type of marketing. Categorisation becomes difficult.

What issues arise from the use of voucher codes?

Merchant issues

Affecting their overall marketing/business

• Margin retention

• Brand perception

• Incorrect redemption due to loose Ts & Cs / tech implementation

• Channel overlap

• Wide distribution – vouchers going viral

• Customers looking for voucher at a late stage of the purchase cycle (during checkout)

• Lifetime value of voucher customers

• Customer complaints/harmful brand impact when a voucher is not activated due to usage

restrictions

Affecting their affiliate program

• Value of voucher affiliates

• Big admin task to create & maintain bespoke and generic codes and monitor &

analyse performance

• Inaccurate promotion of vouchers/Ts & Cs

• Affiliates promoting codes intended for different channels

• Use of exclusive codes given to other affiliates

Affiliate issues

• Time strains – affiliates can’t amend promotions/promote new vouchers as fast as

needed

• Cookie overwrite from voucher sites as the last referrer – lost commission for content

sites – more analysis needed on a per merchant basis

• Short term promotions are difficult to get good results from

• “click to reveal vouchers” when no vouchers exist – cookie stuffing

• Increased competition as more affiliates jump onboard the voucher train and ready

made tech solutions become available

Tackle the issues

MerchantsOverall strategy

• Give clear and specific Ts & Cs

• Improve technical backend to minimise issues with them and which customer can

use which code

• Analyse the sales and customers to define how they interact with your site and their

lifetime value

• Use vouchers for short term campaigns, whose effectiveness is easier to measure,

prior to releasing a full scale long term campaign

Affiliate strategy

• Specify the commission for voucher sales – not voucher sites/affiliates

• Give clear Ts & Cs for voucher use within the affiliate channel

• Specify which codes can and cannot be used by affiliates

• Codes distributed through internal CRM should not be banned for affiliates – simply

reduce the commission for those sales

• Possibly work with selected voucher affiliates

• Monitor what vouchers are in use and being promoted by affiliates, in conjunction with

your network

• Provide affiliates with longer running promotions

• Analyse the sales and customers to define how they interact with your site and their

lifetime value

• Provide exclusive offers, rather than replicate a single offer branded differently,

wherever possible

Tackle the issues

Affiliates

• Respect exclusivity – do not promote what is not given to you or is not a generic

promotion

• Community sites: accept responsibility to monitor and vet what your users are

uploading

• Respect Ts & Cs and expiry dates: take them down or mark as expired

• Promote vouchers accurately to minimise customer enquiries

• Ask for exclusive codes when you plan on making good use of them and once you have

shown the merchant the value you can add. Provide presentations on the available

marketing opportunities you offer, showcasing to the merchant the benefit of working

with you

• “Click to reveal”: Use only when there are actually offers available

Best practices/advice

• Have clear objectives on what you are looking to achieve through your affiliate

program and how affiliates fit within your advertising & marketing channels, as well as

your overall business strategy. Define cost of sale for affiliate channel, rather than

allocate marketing budget

• Talk with your network – they will be able to advise you on what technical solutions

they offer and what they would advise you to do specifically for your program with

regard to voucher affiliates

• Talk with your affiliates – understanding their PoV and needs is vital

• Monitor your competitors: are they working with voucher affiliates? How? What

restrictions are they imposing?

• Take action – if affiliates don’t comply with your guidelines, they must face the

consequences

Innovation – The future of voucher codes

• Voucher sites are now easy to create – however correct maintenance is the differentiator and success indicator

• More control to merchants and networks over what is displayed.

• More transparency and monitoring on how and where vouchers are promoted

• Networks have made voucher distribution easier, through blogs, forum posts and

dedicated CSV & XML feeds

• Tech solutions for tracking voucher sales, allocating different commissions,

reporting voucher sales and analysing voucher performance within the affiliate

channel have been made available by the majority of networks

• Offline promotions can now be tracked online

• Customers can receive codes on their mobile phones, therefore pushing affiliate

marketing into mobile advertising

• Merchants are changing their sites to better handle, display and allocate vouchers

Voucher sites are a powerful segment of the affiliate arena which, when used correctly, can help achieve outstanding marketing results. Voucher sites should be considered for inclusion in the affiliate partner mix, either at the planning

stage or during execution for optimal program performance.

Over to you!

Questions?