Recently I took part in a panel debate on the subject of voucher codes and whether they add value to affiliate marketing. As it’s not the first time this has been a topic of discussion in the performance marketing industry, it got me thinking about the reasons why it has come up again.
There are some in the industry who believe that voucher codes are simply gaming the last click attribution model. They contend that affiliate networks and advertisers do all the work and voucher code companies reap the rewards. However, this does little to recognise the impact that well planned and executed discount code strategies can have.
A proven model: 100 years of voucher codes
Money saving vouchers have a long and established history in print media. For over 100 years, advertisers have disseminated them through media houses in order to grow their customer base and build brand loyalty. One of the reasons why this works is because publishers provide advertisers with access to a mass audience in a brand-safe environment. Now, the ubiquity of digital means advertisers have a renewed opportunity to achieve increased visibility and reach a new audience of savvy consumers who invest time and research in order to make the best choice.
Voucher code use is increasing across all demographics
The demand for discount codes is growing. According to industry estimates, 31 billion online discount codes are set to be redeemed worldwide in 2019. It is an accepted fact that smart shoppers in all age brackets and demographics are looking to make the most of their money. Eight out of 10 millennials use voucher codes when shopping online and a third reported that they use them frequently. With millennials earning less than the previous generation and less than they expected, it’s no surprise that they are savvy consumers. However, older people also use discount codes too.
Voucher codes positively influence consumer behaviour
Discount codes consistently carry smart shoppers over the line to the point of purchase and give them the last incentive to buy. When voucher codes come into play, smart shoppers buy products sooner, buy more and buy from brands that they wouldn't have necessarily considered initially. In fact, research from inmar has found that 83% of respondents changed their shopping habits as a result of a discount code.
Incremental sales and building loyalty
We know the assumption that consumers go to advertiser sites, put items into their baskets, look for a code and return to the advertiser site to complete the purchase at a lower value is in fact faulty. However, there is empirical evidence that shows sales that follow the use of voucher codes are not sales that the advertiser would have benefitted from anyway. A 2018 study conducted by Google and comScore show 94% of customers were not on an advertisers site prior to finding a voucher code.
This is further evidence that supports the view that voucher codes lead to incremental sales – which is the crux of this issue.
Recently, in a number of markets, we’ve seen advertisers abruptly decide to stop working with voucher code sites, giving the market little time to respond or to even put our case to them about the detrimental effects this might have. In the past, advertisers who have stopped working with voucher code partners have seen a significant negative impact on overall sales. However, the risks of halting a voucher code strategy are wider ranging than losing immediate sales.
Research from Google and comScore reveals that the use of discount codes has a longer-term impact on shopper behaviour. As well as being more likely to convert, consumers who use voucher codes are returning customers who are likely to spend more and are more loyal to advertisers.
How advertisers can develop an effective voucher code strategy
Advertisers, networks, and voucher code partners need to work closely and collaboratively to help drive the market and develop strategies to help push sales forwards. We understand that offering codes with no expiry dates, for example, can lead to senior management seeing voucher codes as a “blunt sales tool”.
However, as we have seen, using a more targeted and sophisticated approach is likely to yield better results. Advertisers can find their voucher strategies to be more fruitful when they employ tactics that increase the average basket value, or when they offer gift cards, provide access to exclusive content, which is behind a paywall, following the purchase of a specific product or use voucher codes to optimise stock.
Think about your affiliate marketing efforts as a football team, with voucher code sites acting as the striker. If advertisers are the managers of the team, then they should want to work with the striker to score as many goals as possible, working collaboratively with the whole team to help score more goals than the competition. Work transparently and openly with your strikers to achieve the best results possible.