Discount coupons, cashback and promotional offers are historic affiliate levers. They are also the subject of particular attention by advertisers who often wonder about their usefulness and their real impact on conversion. The latter therefore regularly assess their incrementality and more generally study all the key performance indicators (KPIs) of their promotional actions. However, if we really want to understand the importance of online promotional marketing, we must start by asking ourselves the right questions.
Online promotional marketing: a flourishing technique in the e-commerce landscape
Since the 2008 crisis, Internet users have become accustomed to constantly finding offers online. The popularity of couponing and cashback sites has grown exponentially and they have now become brands in their own right. There are currently more than a hundred discount code sites and other good deals in France alone. And these are increasingly popular with Internet users. In 2013, 2 out of 3 users (66%) admitted that they often or always go to a discount coupon site before making a purchase*.
However, the more the discount market increases, the more the number of e-retailers wishing to rely on a discount strategy to increase their business also increases. Because it’s a fact, couponing and cashback sites are an excellent way to encourage consumers to buy your products or services and therefore generate incremental sales, provided of course that you use them correctly.
The right questions to ask yourself to optimize your promotional marketing
Online shoppers are increasingly seasoned in searching for bargains on the web. Implementing effective promotional systems therefore requires asking the right questions. Because beware, selling off these products or services involves risks. As a merchant, you want your discount strategy to differentiate you from your competitors, but in no way devalue your offer. Brands with permanent promotional offers or active discount codes may accustom consumers to always benefit from discounts. However, the risk is that if they do not find a code or a discount one day, they will turn to another brand. Some brands are now considered “discount brands” and consumers expect to always get offers when buying a product from them. It is therefore important to put in place a strategy that will not harm your brand image.
The relevance of discount offers
This brings us back to our first observation: ask yourself the right questions. As a merchant, you need to ask yourself if offering discounts is relevant to your brand and how it will impact it. Take the time to reflect on the perception that Internet users have of your brand and consider in the light of these considerations how best to associate the concept of discount with your brand image.
Define a relevant promotional strategy
If a brand wishes to develop a discount marketing strategy as part of its affiliate program , it is important to first define the objectives it wishes to achieve by deploying such a strategy. Does it want to attract new customers, liquidate inventory, increase the value of its average basket, encourage customers to try new products or simply increase its sales and turnover.
A discount can perfectly serve either of these purposes, provided it is used wisely and as part of a more comprehensive strategy. As part of your affiliate program, take the time to observe the impact a discount code has on your sales and traffic. Data is key, so be sure to drive your actions based on data rather than assumptions. Look at your program’s KPIs and data and build on them to optimize your discount management.
One offer, one goal
There are several types of offers. Each of these offers can meet different objectives. The type of offer you use will basically depend on your margin rate and how you want to position your brand. The most popular offers are discounts in euros or percentages on the amount of the order, free shipping and free gifts. For example, if your brand has a high-end positioning, it will be better to focus on customer loyalty discounts or free shipping rather than regular product price discounts.
Sales promotion: a customer acquisition lever
Acquiring new customers is always a key indicator for advertisers. After all, who says new customers also says more sales and therefore more turnover. However, statistics show us that it is not always easy to acquire new customers. Indeed, while the probability of selling to a former customer is 60% to 70%, that of selling to a new customer fluctuates between 5% and 20% depending on the sector of activity.
However, the continued growth of couponing and cashback sites gives advertisers the opportunity to reach a very large audience of consumers that they would perhaps have had more difficulty reaching with other digital levers.
This is all the more true if you take into account that 71% of consumers believe that they will do better business online than in physical stores. As mentioned earlier, the major players in the couponing and cashback sectors have become brands in their own right and Internet users have become accustomed to using their services when shopping online.
Increase the scope of your actions
To acquire new customers, you must therefore provide these crossroads of audiences looking for promotion with the appropriate media. In general, advertisers opt for free delivery or a fixed amount of discount, for each new customer making a first purchase on their site. As part of an affiliate program, you can also set up special compensation for affiliates bringing you new customers. By doing this, you will encourage them to highlight your offers and therefore increase the reach of your actions.
It is important to specify here that the affiliate channel is not limited to couponing and cashback. For a campaign to be successful, it is important to deploy all the levers offered by this marketing channel. Content (influencer marketing), emailing, price comparison, retargeting , programmatic display, are just as important for the success of your program. The mutual activation of these levers allows advertisers to be present throughout the purchase journey.
Finally, don’t forget that bloggers and influencers have a qualified audience that represents a real pool of new prospects. Initiating partnerships with some of them is a great way to increase your visibility and providing them with exclusive discount codes can increase your chances of turning this audience into loyal customers.
Increase your online sales
Discounts and offers can be used in a variety of ways to push your sales. Weekly or monthly offers can allow you to increase the amount of your average basket as well as the volume of your sales. 69% of Internet users say they increase the number of items in their basket to be able to benefit from a reduction*. Mechanics to increase the average value of orders are often of the type: “free shipping from X€ of purchases” or “X€ or X% discount from X€ of purchases”. Here is a little advice for setting up this type of operation. Calculate your average basket for the last three months and condition an offer on an amount greater than this average basket by 30%. For example, if your average basket is €100, you can offer a discount of X% from €130 of purchases.
Develop an effective marketing strategy
In order to deploy an effective couponing marketing strategy, you must also plan your offers based on the important calendar events of your activity. By doing this, you don’t accustom your customers to continuously benefiting from discounts and therefore don’t harm your brand image. At the same time, you stage your promotional marketing actions by conditioning them to defined periods of time and thereby promote impulse buying.
To sum up, with a good understanding of your brand, clear objectives and well-defined KPIs, couponing and cashback levers can be very interesting growth vectors, without devaluing your offer. In today’s era of hyper-connected, over-informed cybershoppers who are always looking for the best offer, it is essential for brands to deploy relevant discount strategies to maintain or gain market share.
* source: figures from the survey “Use of Discount Coupons by Internet users” – CCM Benchmark & CPA – April 2013