This is a live blog post from AMDays and is a session called coupon code compliance, presented by David Naffzigger of BrandVerity.
How coupon codes become a liability:
- Targeted coupons lead across channels
- Partner-specific codes proliferate
- Fake and fraudulent codes mislead users.
Path to Coupon Code Leakage:
CouponAwesome seeks to reward their users with the “Best Available” Coupon
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Affiliate deduces commission in exchange for the exclusive discount
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Exclusive code ends up on other coupon sites where the commission % is higher.
Impacts of Coupon Code Leakage
1. Destroy channel economics
- Offers created with targeted channel economics may become cost – prohibitive on top of an affiliate commission
2. Reduce partner incentives
- Poorly protected exclusive codes reduce value for coupon site
3. Create negative & costly customer experiences
- Customers may respond poorly to broken codes
- Customer support spends time placating customers.
Common Scenarios
- Friends and family codes
- Email-only codes
- First-time customer code
- Offline promotions
- Retention marketing
- Affiliate-specific codes
Warning Signs of Coupon Abuse
- Customer support complaints
- Existing affiliates identify abuse
- Disproportionate success of a coupon code (particularly channel00specific codes)
- High Failure rates on redemption
Affiliate compliance starts out with a well thought out affiliate agreement:
- Can affiliates post codes found outside of those provided by advertiser? (typical rules – no)
- Will you pay commissions on non-affiliate codes? (typical rules – no)
- Distribution restrictions? (Typical rules – First – party)
- What actions are the affiliate required to take upon discovery of a code? (typical rule – remove it).
Reactive Compliance
Cancel Code
- Impacts customers targeted for coupon
- Resulting customer service challenges
- Destroys promotion
Reverse/override commissions using unauthorized codes
- Removes all attribution from affiliate channel
- Creates unhappy loyalty customers
- Can create end of month conflict with affiliate partners
No Action
- Financial cost
- Promotional cost: Does this make it less likely your organization runs the promotions they want to?
Proactive Compliance
Manage the commissions and redemption rate of codes
- Non-commissionable codes
- User-specific codes (or limited use codes)
- Link-based discounts (no codes)
Similar challenges to reactive code management: unexpected consumer usage, continued code proliferation, etc.
Monitor and quickly request removal of unauthorized codes
- Requires consistent engagement & effort.
Techniques to Monitor
- Search!
- Many coupons are findable via search
- Google Alerts
- Twilerts (twitter alerts for tweets with codes)
- Automated systems.
If you would like a link to download a free coupon compliance report, please visit brandvertity.com/couponcompliance