Everybody loves a great deal.
Ever since Coca-Cola introduced the first paper free drink voucher way back in 1881, consumers have been addicted to the savings power of coupons. In fact, 97% of US consumers say they look for deals when they shop, and 92% say they are “always” looking for deals.
For marketers, it’s hard to ignore the promotional power of coupons. At their best, they are a powerful customer segmentation tool and can help you drive sales where and when you need them. But at their worst, coupons can be abused, and they can eat into margins if not managed carefully.
In today’s digital and social media-driven landscape, coupons and the coupon websites that promote them can be an essential part of the marketing mix. This is an insider’s guide to understanding how coupon sites work, recipes for success, and how to avoid the pitfalls. But first…
What is affiliate marketing?
When it comes to working with publishers, many marketers are familiar with display advertising, where advertisers pay publishers based on impressions or sometimes clicks.
Coupon websites, in contrast, typically participate in CPA (cost per acquisition) affiliate marketing platforms. CPA marketing is distinct from more traditional advertising formats in that advertisers pay only for sales or conversions generated by their publisher partners.
To partner with a coupon website, you’ll typically go through an affiliate network. These networks act as an intermediary between you and the coupon website, tracking sales and conversions and handling payments between parties. The most popular affiliate networks include CJ Affiliate, Rakuten LinkShare, and Shareasale.
One of the most appealing aspects of affiliate marketing from the advertiser’s standpoint is the lack of up-front cost and therefore decreased risk. You’re not paying for impressions or clicks that may or may not turn into sales, you’re only paying for conversions. On the flipside, affiliate marketing by nature allows your partners significant flexibility in how they promote you and requires more oversight.
Should your brand use coupons?
If you don’t already offer coupons, you’ll need to decide whether coupons make sense for your brand in the first place. Coupons typically work best in markets that are highly competitive or commoditized as they can help your brand break through the noise and compel a shopper to buy from you through a significant discount.
If you sell a highly unique or differentiated service that doesn’t compete directly with other market players, offering discounts might provide less incremental value, and may simply eat into your margins.
But if price is an important decision factor for consumers in your market, coupons can be an effective tool for motivating the sale.
If your product or service involves a high lifetime value for each customer, offering coupons as a way to incentive the initial sale can make a lot of sense. Some high-value subscription services offer massive discounts up-front or completely free packages just to get customers’ feet in the door.
Every brand is different, so think about how coupons can fit into your marketing mix to drive incremental value.
The online coupon landscape
Coupon websites give marketers access to audiences of shoppers who are interested in deals. The best coupon sites have large email lists to which they send out curated lists of deals, and also attract shoppers to their homepage where they showcase each day’s best coupons.
One of the most important functions that coupon websites play is to test and verify coupons, especially promo codes, so that visitors can reliably find working coupons when they need them. This is an important but resource-intensive task – some coupon sites do a great job with this but many do not (more on this below).
Additionally, some coupon sites offer cash-back loyalty programs in which they incentivize shoppers by paying them a percentage of each sale made through their website.
Types of coupon sites
Coupon sites come in many shapes and sizes, and while many coupon sites haven’t changed dramatically for over a decade, there recently have been some areas of innovation in the coupon space.
Traditional coupon sites
Traditional coupon sites are the ones that will probably look most familiar to you. Offers.com and Savings.com fall into this category – they focus on curating all the available coupons and discount codes for retailers and making those easily accessible to their shoppers.
They typically manage a large email list and can drive customers to your brand via their newsletters.
For traditional coupon sites, search engines are also an important source of traffic, as consumers search on sites like Google for coupon codes and land on these websites. These sites tend to focus on verifying thousands of coupons each day so that they can provide an accurate and reliable coupon search experience.
Curation-driven coupon sites
Curation-driven sites typically focus on hand-picking each day’s best deals and featuring them for their users, as well as sending them out via email. Some of these sites are more generalized, and others focus on more niche interest areas. Brad’s Deals, Tech Bargains, and DealsPlus fall into the curation category.
These websites tend to have very engaged audiences and often have great insight into the types of offers that will perform with their users. The key to working with these sites is to find the ones with audiences that will be drawn to your brand and offer.
Coupon forums
Coupon forums are places where anyone can go to share and discuss deals. Slickdeals is the largest coupon forum, with many millions of people going there every day to get the scoop on the best deals of the day.
Coupon forums tend to attract the savvier deal hunters who are highly familiar with deals and are often looking for “hacks” or “glitches” which offer unusual savings opportunities.
For advertisers, coupon forums can be great places to advertise your deals (typically on their homepage) simply given the large number of users who visit those sites. In many cases, marketers solicit popular forum members and create direct relationships in which those members will promote their deals. Different forums have different policies on this, so it’s important to check each forum’s guidelines (here’s an example) to know what’s acceptable.
Cash-back coupon sites
Cash-back sites such as Ebates have been around for a long time and are super popular with shoppers since they not only offer coupons, they pay their customers a slice of the commissions you pay them. These are also known as loyalty sites, since most of the shoppers on these sites tend to do most of their shopping through their cash-back systems.
One reason to work with cash-back sites is that due to high loyalty among their users you may only get access to these customers by going through the cash-back site. On the flipside, most loyalty customers maintain their loyalty to these cashback sites, and are less likely to become loyal customers of your brand. If your competitor offers a coupon through the same cash-back site, your customers are likely to switch over to them.
Many coupon sites including RetailMeNot have recently started to offer cash-back loyalty programs as a way to increase loyalty from their customer bases.
Coupon browser extensions
More recently, coupon sites such as Honey have gained popularity by offering convenient extensions for browsers such as Google Chrome and Firefox which automatically search and apply coupon codes for you when you’re shopping. Shoppers love these tools, since who loves the process of finding and trying out a bunch of promo codes that don’t work?
Most of these extension sites also offer cash-back programs. RetailMeNot recently launched its own browser extension to compete with Honey.
One drawback of these browser extensions from a marketer’s standpoint is that, by nature, an extension only appears for the shopper when they’re already at your site, ready to check out. So paying a commission to the extension company at this point may make less sense from a marketing standpoint. Curation-driven sites, in contrast, can drive new shoppers your way who are not yet familiar with your brand, so it’s important to factor in your marketing goals when choosing the best types of coupon partners to work with.
Coupon bloggers
Some coupon bloggers are larger than all but the biggest coupon sites. Krazy Coupon Lady, Hip2Save and Coupon Mom boast readerships in the millions, and if they decide to promote your brand, they can provide you with a considerable amount of visibility.
However, most individual bloggers tend to be selective about the brands they actively promote, and the personal tastes of the blogger plays a major role in who they work with.
Alternatively, many thousands of smaller bloggers exist who can also provide a great promotional vehicle for your brand. The challenge here is that recruiting and coordinating a campaign with dozens or even hundreds of smaller bloggers can be a logistical challenge. Fortunately, there are some platforms designed to ease this process – Dealspotr is an influencer marketing platform designed specifically for promoting deals, while Famebit is designed for video bloggers on YouTube.
Coupon sites to avoid
Sadly, affiliate marketing suffers from perhaps more than its fair share of spam and abuse, and coupon websites are no exception. As a marketer you must do your homework prior to working with coupon sites to ensure success and minimize fraud.
At the most basic level, you as a marketer want to work with coupon sites that will refer you new customers. You want to avoid coupon sites that earn commissions without adding any value to your transaction flow.
For example, some coupon sites try to get in front of your shoppers when they’re on your checkout page when they hop over to Google to find a promo code. These sites often use paid search ads or invest in organic search engine optimization to appear prominently for a search term like “yourbrand coupons.” Nothing wrong with this, but the problem happens with sites that list coupon codes for your brand that are invalid or even fake.
For example, let’s imagine that this week, your brand is not offering any promo codes. Some less trustworthy sites may display promo codes for your brand anyway, giving them the appearance of having unique, exclusive discounts for your brand.
What’s worse is that shoppers are very likely to click on these fake codes, thereby earning these sites commissions even if the codes don’t work. Some sites even go so far as to display fake codes for brands that don’t even offer a promo code box on their website (here’s just one example), giving them an unfair advantage against more reputable coupon sites which will (correctly) display zero promo codes for these same stores.
5-minute guide to auditing coupon websites
When evaluating a coupon site, a good thing to do is to check their traffic stats on SimilarWeb and see what percentage of their traffic comes from search engines. While most coupon sites have a large percentage coming from search (this is simply the nature of how consumers look for coupons) – for example, RetailMeNot historically hovers in the 70% – 80% range which is fairly normal – if you see a percentage above 90%, you’re getting into the territory where you need to ask yourself whether this site has any of its own users, or if they are overly dependent on search engines.
Second, you should examine their coupon pages for a few popular brands, and actually try out some of their codes. Do you immediately find some that don’t work? This is a bad sign – any coupon site worth their salt will make it fairly difficult to find any codes that don’t work due to solid content moderation systems.
Best practices for working with coupon affiliate programs
Work with a select few coupon sites
Rather than accepting any coupon site that applies to your affiliate program, try being selective and working with fewer, higher quality sites. Go with coupon sites that have responsive and professional affiliate reps who will work with you to ensure a successful relationship.
Check out their website and their metrics as mentioned above. Does this seem like a website you’d use yourself? Does it feel like real people visit this site? If it feels more like a shell site designed for search engine optimization, or if you find invalid coupon codes listed, you’ll want to avoid.
Maintain your own coupon page
If you’re offering coupons to external sites, you should also publish them on your own site. Otherwise, your visitors have no choice but to find coupons for your store on other coupon sites. You can either link to this page prominently in your header, if you’d like more people to see it, or if your brand necessitates a more subtle approach to coupons, you can link to it on your checkout page near your promo code input box. This way, there’s less likelihood that a shopper who’s about to buy something from you will bounce out to an affiliate coupon site, eating into your margins.
Optimize your website’s promo code box
First, you should decide whether you want to offer a promo code box in your checkout flow to begin with. The fact is, many people, when presented this box, will feel a need to fill it out with something, and will go to Google or other places to try to find a code.
The upside is that if they do find a code, they are very likely to complete their purchase. But you need to think carefully about how you present this promo code box and make sure it lines up with your marketing strategy.
If you’d like to offer a promo code box, but don’t want to make this front and center, you can add a smaller text link that says “Enter a promo code” and have the box appear only if the link is clicked.
Work with influencers, especially micro-influencers
An alternative to partnering with large coupon sites is to work with larger numbers of micro-influencers and bloggers. Influencers can have a more authentic relationship with their followers and are far less likely to exhibit very spammy behavior.
You still must be vigilant – there are problems unique to influencer marketing such as fake followers which you’ll need to guard against – but overall, working with influencers can be a great experience and can drive significant sales. Influencer platforms such as Dealspotr, Izea and Famebit allow you to more easily partner with large numbers of quality micro-influencers.
Negotiate placements and promotions
Rather than letting coupon sites promote you autonomously, work with them and negotiate placements and special distribution deals. You can often score a homepage placement or inclusion in their email newsletter in exchange for an exclusive discount code or an increased commission rate. Run trials of these types of placements with various coupon sites and see who performs well.
Audit the coupon sites that appear on the first page of Google for your brand
Google “yourbrand coupons” and see which coupon sites pop up. Glance at the coupons they’re promoting to make sure they’re legit and none of the sites are doing anything misleading. If you find coupon sites to whom you’re paying commissions that are posting misleading coupons, you can take swift action.
Do not allow PPC ads for your brand
PPC, or pay-per click, search advertising can be a powerful way to drive traffic. However, in the coupon sphere, you’re better off not allowing coupon sites to bid for your brand name. You can be pretty sure that a site that pops up as a sponsored search result for “yourbrand coupons” is not adding any value to your marketing value chain.
The bottom line
Shoppers will always love a good deal, so finding a way to work with coupon sites can be an essential part of your marketing mix. However, given the open-ended nature of affiliate marketing, these sites operate in a “wild west” environment, so as a marketer you must be vigilant and protect yourself from spammers.
Understand your marketing strategy and how coupons should fit it, find high-quality partners, and keep a list of best practices handy so you’re doing your homework along the way. Used properly, well-crafted partnerships with coupon affiliates can be a windfall for your e-commerce brand.
About the author
Michael Quoc is the founder and CEO of Dealspotr, a next-generation coupon platform that utilizes crowdsourcing at scale to provide the industry’s most complete and accurate database of promo codes and discounts. Michael was previously the Director of New Products at Yahoo. Follow his updates on marketing and innovation on Twitter.