Value of Coupon Sites Discussion

We’re starting to get some good discussion going on AvantLink’s Facebook fan page. I have been posting “Random Qs” to our wall now and then, but unfortunately there are no Permalinks to individual wall discussions.

In an effort to make it possible to refer to this Value of Coupon/Deal Sites discussion at a later date, I am re-posting here.

If you would like to add your two cents to this discussion, go to the fan page to post or simply comment here. Gary M

AvantLink.com: Random Q: We’re seeing a lot of merchants either eliminating coupon sites altogether, or reducing their commission rates significantly. Thoughts or opinions on this trend?

Dave Polivy: Like you guys told when we launched, keep those coupon sites active cause they bring customers you would not normally get. With the current level of competition, all affiliate referrals are better than fewer! We just gave a couple of coupon sites some exclusive deals and they are converting better than expected.

AvantLink.com: Dave, thanks for the comment. Good to hear! Can you tell, are those coupon sites bringing new customers? Usually when folks ask me “Why should I be listed on a coupon site?” …I start with a one line answer: Because your competitors are there.

Dave Polivy: ?90% new customers. the trick is to turn those new customers into OUR customers…..probably the biggest challenge. Similar to those darn Amazon customers. have to find ways to keep their loyalty when they barely know who they are even buying from.

Scott Mason: We have coupon sites w/exclusive deals that generate significant amounts of revenue, it would be tough loose that traffic..

AvantLink.com: Any couponers want to comment?

Jamie Birch: I’ve experienced this since 2003. There are some major misconceptions about coupon sites. I wrote a 3 series blog post a year or so ago about it that I still think is relevant today…
Part of it is the data can be hard to come by. How many new customers, profitability of each customer by individual affiliate – things like that are real hard for the affiliate to get, and sometimes just as hard for the affiliate manager. Without those items, and lifetime value info, merchants can make bad decisions.

AvantLink.com: Wow, Jamie! Thanks for posting that link. I just got through part one, and I’ll look at parts 2 and 3 soon. This quote stands out: “In that survey they found that 54% of adults would decrease discretionary income during a recession and 63% of consumers WILL NOT make a purchase if they cannot find a deal”.

Jamie Birch: No problem at all. Here is our other two links: Part 2, Part 3. Hope that helps!

Blake Kritzberg: I am one of those people merchants hate; I search for coupons only after I’ve decided to make a purchase anyway. So I don’t see the value in it for them.

AvantLink.com: Nothing wrong with being a savvy web shopper, Blake

Michael Khodos: Coupon websites help close the sale for the savvy shoppers. Also, lots of people start the shopping on their favorite coupon website. Even if then know where they want to buy from, they start from Google. Let’s say you are “ABC Flowers.com” merchant. And “your” past customer is googling for “ABC flowers coupon”… guess what? They land on the Flowers category page of a coupon website and find a really good coupon from XYZ Flowers. What happens next? XYZ just got themselves a brand new customer!

Wade M. Tonkin: I think you have to have a strategy – working with select coupon sites that operate a really healthy community is great – especially if those sites are respectful of your non affiliate channel coupons and codes that can be found on other sites. There are a few bad actors out there who either directly “scrape” codes themselves or who won’t reign in their audience posted codes when requested that give the others a bad name. It’s also on the merchant to coupon with some strategy.

AvantLink.com: Thanks Michael and Wade. Definitely think that some coupon sites seal the deal.. I think it’s important for merchants to acknowledge that just because the customer was already on their site once, it certainly does not mean they would have bought from them. People that know how to web shop effectively know how to search and find the deals and it’s really that simple. They are not very loyal to any one particular store that’s for sure. So as a web retailer, you either want those customers/sales or you don’t

Jamie Birch: I think a big mistake merchants, advertisers and all of us make is that we talk about this with very little data. At least for the most part. Merchants have to go beyond just a “gut” feeling that “coupon sites are stealing sales we already would have had” and they actually have to look at customer behavior…
You need to look at the performance of each coupon partner. Look at things like, and compare with the site as a whole, avg order size, new customers, lifetime value, margin contribution etc. Typically, advertisers look at sales and make assumptions…
I’ve done this several times in the past. The assumption was that coupon sites were “bad”. Once we dug into the details we found, on several occasions, that a good number of coupon sites had higher than average order sizes, higher new customer percentages and higher lifetime value. When you factor those in, you can see a better picture. But it doesn’t become “coupon sites need to be removed”, it becomes more about each individual partner, how they perform and, in the end, if they are profitable.

Wade M. Tonkin: Jamie is right on this… we’ve worked with a client that seems to think that coupon sites are all parasitic profit suckers and when we crunch the numbers we see that the average order purchased through the coupon sites is well above the average order that the client sees coming in through their own organic efforts. Properly gathered and interpreted data is a wonderful thing.

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