We have all seen them. Those affiliate sites strewn with various vouchers and codes, all vying for the customer’s attention, none of them taking the time to introduce themselves or to tell the customer a little bit about themselves first.
There is rarely a single piece of content to be found on these sites- let alone quality, informative content of the kind that will add value to the customer’s experience.
Coupons and vouchers are being used in record numbers, and naturally, many affiliates are taking advantage of the trend.
But is it not all a little too easy for them? Are these affiliate voucher code sites ruining the true value of affiliate marketing?
The Problem with Voucher Codes
Barely a week passes by when I do not hear of a merchant complaining that affiliates are just cannibalising their existing sales and adding no value. Dig a little deeper and these merchants can almost always be found offering various discount and voucher codes, along with low affiliate commissions.
Small commissions and voucher codes normally go hand in hand, and it is not hard to understand why.
The merchant only has a certain margin to play with, and after cutting into that with exciting discounts with which to attract consumers, there is no margin left to offer appealing affiliate commissions.
So what happens when this model is put to use?
The affiliate’s efforts are over as soon as they have added the voucher to their site. Yes, the voucher site will grab brand traffic looking for a cheaper product and the merchant gains a sale, but how much value did the affiliate really bring to the process?
They have attracted a customer that would have purchased from the merchant at some point anyway, just by slapping a discount code on their site. They get paid for it (albeit, a lower commission), and the merchant ultimately pays more because of the use of the discount code. Everyone makes less margin.
Compare this to a campaign without the use of voucher codes. The same consumer is searching for the brand at a cheaper price. A quality content affiliate will convince the consumer it is worth paying full retail price and earns a much bigger commission as a result of their efforts. Everyone wins.
Long Term Value vs Quick Sales Now
As a merchant, would you prefer to have a strong army of affiliates who are motivated and willing to invest their time in your campaign, to work with you to build your brand and add value to it? Or hundreds of affiliates who will just throw up a voucher code and cannibalise your brand?
I would argue that merchants do want the former promoting their brands, but cannot (or will not) justify paying for them. There is often a lack of understanding of the fundamental principles of affiliate marketing at play here.
Quality content affiliates will not work for 5-10% commission; it is just not worth their time. When a merchant uses voucher codes, they are killing their margins and are unable to offer the commissions needed to build long term value in their brand.
Affiliate marketing is such a competitive industry that without offering at least 20-30% commission, a merchant will simply not be able to attract the right type of affiliates who will invest their time in helping to build a successful brand.
Breaking the Mould
It is a brave move for a merchant to cut out their discount code affiliates and invest in attracting value-adding content affiliates, but this is the only way to fix the current broken model.
The current model is broken because the merchant must still pay, regardless of the value (or lack of it) being added by affiliates promoting their brand. Affiliates can generate ten sales adding very little value at 5% commission, or two sales from new customers that the merchant may never have had at 25% commission, and the result to the affiliate is the same.
The latter of course involves much more work and would require the merchant investing more into the affiliate channel, but I believe that affiliate campaigns can only be a success if everybody involved in the process is adding value to the partnership for the long-term, and if everybody is rewarded well for the part that they played in the sale process.
The health niche is a great example of where this process is working very well. Our affiliates within the MoreNiche network are paid on average 30-40% commission - an extremely attractive commission rate, yet the merchant is still left with a 30% profit margin. Our merchants strive to build value in their offers and never discount, wholesale or lose control of their price points.
We have helped to build many multi-million pound businesses based on this very simple model: reward affiliates well for working hard and adding brand value.
Our model is all about building long term value, and I would strongly recommend every merchant with an affiliate campaign try it.
We would certainly not discourage content affiliates using voucher codes as part of their closing sales pitch, however this should complement a content strategy and not be the only information offered on your site.
Voucher codes are a short term fix, not a long term solution.
For further reading, take a look at PerformanceIN's Voucher Codes Digital Supplement