Shoemoney - Skills To Pay The Bills

Posted: 31 Mar 2011 05:50 AM PDT

So you've got a budding e-commerce startup. You're advertising on Google, Facebook, Bing, etc, and you decide one day, "hey, I should have an affiliate program! I heard CJ is great, let me sign up there."

You speak to your CJ rep and they tell you about all the wonderful sales that they'll be generating for you and you create your account, deposit funds, and with a huge smile across your face, you approve a whole bunch of affiliates and sit back and wait for sales to roll in.

A few days later, you start getting a few sales but as you watch your overall sales volume, it doesn't increase at all. Then, a few more sales come in, but again, your total sales did not increase by the number of sales that the CJ affiliates generated. So, you start wondering why.

You start analyzing your sales data through CJ, and you notice that the affiliates generating sales are seeing obscene conversions, 20%, 30%, 40% and even higher. Well, I've got an answer for you, and it's not pretty.

You see, I used to run a coupon site myself, 10 years ago. It was called BigBigSavings.com and I made a ton of money from it. Why? I had great deals posted on our homepage, and every single day, thousands of people loaded our homepage to see what new offers were available that day.

Unfortunately, many things have changed since those days. When we approached our coupon site affiliates to ask them to feature PetFlow (our company) on their homepage, every single one of them said that this is not where they generate traffic, "No one goes to our homepage."

These days, coupon sites generate traffic on their highly SEO'd pages that are specific to a particular merchant. So, for example, if someone had searched for "PetFlow coupon," there would be numerous coupon sites listed in organic results, that would list coupons for our site.

And the catch is, in order for the user to see the coupon, they most often have to click a "reveal" link, which immediately opens the merchant's site in another window, dropping (stuffing) CJ's cookie.

Now, regardless of whether the user actually used the coupon provided by the coupon site or not, you're paying for the sale! We have spent countless hours looking through user logs as well as session traffic, and we have seen this over and over and over again.

The consumer is at the point of purchase, has already used a coupon code that was provided to them, then all of a sudden has a CJ cookie deposited, and then completes their purchase. After analyzing all this data, we decided to stop our CJ affiliate program, terminate all our relationships with coupon sites, and guess what, our sales never declined.

I don’t want you to think that coupon sites are doing anything malicious or illegal, it’s just that times have changed, and people are no longer visiting coupon sites looking for potential deals like they used to when I ran my own coupon site. Today, the way these sites generate their revenue is when the customer is already at the point of sale, so none of the customers that coupon sites generate are customers that the merchant wouldn’t already have sold their products to, on their own.

So, if you want to offer coupons on your site, here are a few things that you can do:

Bid on your own "trademark + coupon" and offer a coupon for users to use. Either take them to a landing page that offers a specific coupon, or simply put the coupon itself in the ad copy.
Put a coupon on your site for all customers to use. If you list the coupon, you'll provide less of a reason for customers to go searching for it, and they'll be more likely to make the purchase anyway, because you're providing a value to them that they were not aware of. We have a coupon featured prominently on both our homepage, as well as at the top of every page. Coupons are a great way to reinforce purchasing behavior, and your conversions will be significantly higher if you offer a coupon on your site, for your customers to use.
Stay away from coupon affiliates. Make partnerships with bloggers and/or content sites, someone who has an audience that is interested in reading the content provided. It’s not a bad idea to have an affiliate program at CJ, but you should not blindly approve publishers thinking that the sales they’re going to generate are going to be incremental.