The AvantLink “How To” series is an ongoing series featuring best practices and strategies for affiliates and merchants with actionable, practical information to improve your affiliate marketing efforts.
Let’s begin with a universal truth: everyone wants a bargain.
Whether it’s car buying or waiting for a seasonal clearance sale to snag a new pair of shoes, if a consumer can save a buck on a product they’ve wanted, it’s a win-win situation for them. This positive impact on the wallet is a process that is only magnified by ecommerce and the ability for a consumer to find the best deal among handfuls of online retailers all at once. Coupons offering percentages or x amount of dollars off any purchase are commonplace and almost needed to some degree to get the attention of a deal-seeking customer.
Merchant coupons and special promotions are becoming increasingly more popular in the affiliate world, too. They’re a powerful tool to not only capture the attention of a program’s affiliates, but they’re also one of several tools that can be used to activate new or inactive affiliates to start representing your program.
How can an affiliate program manager take advantage of this bargain finding mindset? As mentioned above, coupons made available to affiliate marketers are easy to find, but there are ways to change a typical ad with a discount code into a tool to drive sales amounts higher.
The Numbers Game We Call Thresholding
Setting order amount thresholds after which a coupon or discount will take effect will often yield significantly higher order totals than simply using the coupon without a threshold.
What is your program’s average order amount? $45? $113? No matter what the average order is, there’s likely a higher amount you would like to be hitting. Using coupon thresholding, you can make that discount hover just above the average order price so that a typical item won’t activate the discount, but a second item certainly would put the customer over the limit.
For example, a program with an average order of $74 may configure a coupon for a 10% discount off any purchase over $80. If you’re the customer who has just bought the $74 order, that $6 gap is painfully within reach but will require that they purchase an additional item to activate the discount.
With the 10% discount put into place, the customer will save a minimum of $8 off their final purchase (assuming the final total is $80), which is only $2 off from the original order amount of $74 to begin with. But since that average order is so high, it’s unlikely that the customer will find a $6 item but instead opt to add an additional item of a higher price to put the total well beyond the $80 mark.
Free Shipping & Universal Rule #2
Often times free shipping is more effective than percentage discounting despite saving the customer less money in the end. Take an affiliate ad that offers free shipping for any order of $100 or more. Offering a 10% off coupon threshold for the same order amount would yield the customer a $10 savings, however, it’s very likely the shipping cost will be less than $10. So the free shipping costs less, which is good for the merchant, but the real value is perceived value to the end user. If “everyone wants a bargain” is universal rule #1, rule #2 would be “everyone hates paying for shipping”, even if that shipping is less of a value than a percentage discount.
Free shipping certainly isn’t new or groundbreaking. But it is important to keep it in your arsenal of couponing tactics, especially as the fourth quarter and holiday season- when free shipping ads thrive- is approaching quickly.
Free Item Included
Trying to launch a new category of products, a new brand, or sell off some old inventory? Try incentivizing customers to buy these products by offering a free item with any purchase that falls into any of those categories.
While this suggestion may not be entirely related to coupons and thresholds, it’s a fantastic “bargain-seeking” tactic that appeals to most consumers. On top of having a fantastic affiliate program, TheClymb.com is a perfect example of using free item inclusions as they frequently offers free Clymb t-shirts with certain purchases. This takes advantage not only of this tactic but also benefits from free additional advertising by way of The Clymb’s customers wearing their shirts.
The Proof Is In The Digital Pudding
Right now you’re probably thinking “theory is all fine and well, but does this stuff actually work?”
An in-house affiliate program manager at AvantLink once managed a program that frequently used 10% off coupons in their ads for affiliates. When the coupon had no order amount threshold set for the discount to take place, the average order amount was significantly down when compared to average orders not using the coupon.
On the flip side, when a threshold of $150 was put in place, she found that the order totals were often much higher than the $150 needed to reach the discount, hovering in the near $200 range.
Dramatic? Yes. Typical? That will depend on your program, products , the coupon, and your average order amounts, but it does demonstrate that consumers do in fact respond to incentives, especially when those incentives are just out of their reach. Many merchants are hesitant about the idea of further cutting into their profit margins with coupons and promotions, but if you’re willing to play the numbers game, threshold coupons offer fantastic opportunities to take order amounts to the next level.
It’s finally worth noting that the higher order value isn’t the only benefit from using threshold coupons. Affiliates obviously benefit from higher order totals as well, but are also very willing to promote an ad to their visitors that will satisfy that first universal rule of bargains. If you’re a program manager that can provide these coupon tool to affiliates who want to promote them, the strength of your affiliate relationships can only improve.
Bonus! If you’re a merchant who frequently runs coupons or deal related ads, have your affiliates take a look at the most excellent AvantLink Dynamic Deal Feed. This automated aggregator of merchant coupon & deal ads is a super powerful addition for any affiliate who utilizes sale and coupon promotions frequently. Learn more about the Dynamic Deal Feed here.