Coupon Affiliate Marketing More Important as Economy Swings Down

This has been a pretty tough year for our economy. It seems that every headline is worse than the last and every industry is needing to switch gears fast.

I’ve met, and know personally, so many that are affected by the slumping economy, either with jobs lost or just general business downturn, it can be tough to swallow.

As we gear up to shift marketing strategies, it is important to think first how consumer behavior is changing during.

If 2008 taught us anything, it is that more consumers will be shopping with coupons. This means more online traffic to coupon sites will increase.

Consumers will continue to spend, but they will be researching their purchase through coupon sites. They want to make sure they get a deal.

The affiliate marketing team at JEBCommerce spent 2008 learning as much as we could on consumer behavior in an economic downturn.

In this article, we will share the best coupon affiliate marketing strategies. Combining what we learned about consumer behavior during a poor economy with data from a survey polling the top coupon affiliate sites on the net.

Fast forward to the 7 creative strategies for digital retailers.

Consumer Behavior Changes

“Consumers are looking for coping mechanisms,” says Lisa Klauser, vice president of consumer and customer solutions, at products company Unilever U.S. “Coupons are one way they are trying to make ends meet, get more bang for the buck.”

According to the Wall Street Journal, 2008 was the first year coupon redemption did not decline. For the last 15 years coupon redemption had fallen each year.

As our economy prospered, less and less coupons were redeemed. But not in 2008, it held steady.

Does this show a general trend in purchasing behavior? How does this relate to online retail?

RetailMeNot commissioned Harris Interactive in March of 2008, prior to the economy really taking a downturn, to conduct a survey on consumers’ shopping habits during a recession.

In a survey of 2,400 consumers in the United States:

63% say they won’t make a purchase if a deal isn’t available.
37% say they would increase their use of coupons or discount codes during an economic downturn.

As for discretionary purchases, such as recreation and entertainment, the poll shows 56% of people would most likely go online to purchase those non-necessary items.

The Washington Post reported in the fall of 2008 that coupons were coming back in favor.

“With wages not rising as quickly as the cost of basic necessities, coupons are back in favor after many years of steadily declining popularity, experts said.” … “Were we not in this economy, we probably would be looking at a slight decrease again,’’ said Matthew Tilley, co-chairman of the Promotion Marketing Association’s Coupon Council and director of marketing for CMS. “There’s definitely an increased interest to use coupons for savings by consumers.’’

It’s been widely reported that consumers shift their buying habits during a recession. As the articles referenced above point out, more and more consumers are no longer purchasing a product without researching to ensure they have the best deal.

Consumers are using coupons in larger numbers, purchasing items without them less frequently and generally planning for a prolonged downturn in the US and global economies.

The good news is they continue to shop, just more wisely and making sure they have a discount prior to making that purchase.

How does that relate to online coupon sites and merchants’ participation there?

Traffic to web based coupon sites has been increasing dramatically. Here’s how digital retailers can leverage this shift to weather the storm.

Traffic to Coupon Sites Increase

“User engagement by deal-seekers appears to be ramping up,” says comScore analyst Andrew Lipsman. “As a general rule, something like online coupon site activity would increase as a result of macroeconomic trends.”

Makes sense doesn’t it? And from what I heard from my coupon affiliate colleagues, their traffic is up considerably as well.

“Visitors to Coupons.com, a decade-old site that lets users print coupons that can be redeemed in stores, grew 35% in the first three months of 2008, compared with the prior quarter, says the site’s CEO, Steven Boal.”

Wow, a 35% increase in the 1st quarter over the 4th quarter of the year prior. That is pretty significant.

Coupons, both online and traditional, have proven increasingly popular as the worsening economy pushes consumers to seek out bargains.

A study by Packaged Facts found that 87% of consumers now prefer to shop at retailers that offer coupons, and 89% are more likely to use coupons in a recession.

“With budgets a top concern for consumers, the ability to conveniently search the Web to find the best prices has become an increasingly important part of the holiday shopping buying process, for both online and offline purchases,” said Jack Flanagan, executive vice president of comScore Media Metrix.

There are more examples of this going on than I care to put here, otherwise this post would take four hours to read. But it is clear that whether it is 37%, 56% or 110% increase, consumers are turning to coupon sites in much larger numbers to do their shopping.

During economic hardship it is increasingly important to participate on coupon sites and take care of these affiliate partners.

It simply comes down to sales. If you are where the consumers are, they will shop with you. If you are not then a better placed competitor will get the chance to close the sale.

Top Coupon Affiliate Sites Survey

JEBCommerce polled the top coupon sites in our affiliate industry on their traffic, during a major recession, as well as consumer behavior and found:

Increased Coupon Site Traffic

90% saw an increase in traffic to their coupon site
54% had site traffic grow by at least 25%
18% saw an increase of over 100%

But that may not be entirely the economy as one respondent pointed out: “Some of the increase could be due to normal Q4 increases and some to Google algo changes but overall things are up…”

There may also be natural increases on an individual basis due to offline advertising and other factors, but the trend is still important to take note of.

Shopping Behaviors Favor Coupons

90% of respondents have heard from their site visitors specifically that they are changing their shopping behaviors to shop more at coupon sites because of the economy.

As one respondent commented: “Absolutely, more users are asking about how long such services as coupon sites have been around. As if they have been missing something. Also, in general a new consumer that refuses to purchase without getting a coupon or at least knowing they got a good deal.”

100% of those participating in the survey said that having your brand on a coupon site does not diminish the brand’s perception in the eyes of the consumer. Their reasons for this should not be discounted:

“People come to my sites to try and get a better deal, they associate MY brand with discounts, not the store’s.”

“I think there are very few merchants that this applies to. Great customer service and quality products are what distinguish brands.”

“Almost every company offers deals. If your company is very high end, then you can offer a gift with purchase in place of a traditional coupon. This is what a retailer like Tiffany does.”

The Bottom Line

Coupon affiliate marketing is more important as the economy swings down. Take advantage of traffic to online coupon sites and develop a marketing strategy to increase sales.

Coupons don’t have to be site-wide, large discounts. Charles Brown, Co-chair of the Promotion Marketing Association’s Coupon Council stated in a CNN.com article: “It’s an individual company strategy. Some may be promoting discretionary items that might not be purchased if a consumer is economizing.”

As some merchants are brand sensitive to couponing, not wanting to offer coupons that they feel may discount their brand, there are other ways to take advantage of the trends outlined.

“I think that what we’re seeing is a behavioral change in the consumer that could have lasting effects. If you shift buying patterns and enjoy the benefits of doing that, you will likely continue in that pattern,” he said. “For the marketer, it’s an opportunity to bring in more customers and get them to try new things.”

7 Creative Coupon Strategies for Digital Retailers:

Offer coupons where you don’t lose margin.
Offer coupons on products that are not moving or are in your clearance section.
Simply use the products in your clearance section as the content for your coupon partners.
Many merchants offer at least free shipping, that is enough to work with these sites and can add quite a bit to your bottom line. (It’s not perfect but may enable you to offer them something to get them started)
Loss leaders – does your company stock products that they lose money on solely to gain the customer? Promote these products to your coupon affiliates.
Offer a small discount on your top items. Product specific coupons are great ways to gain customers.
Offer one-time, new customer only coupons. I haven’t seen anyone do this right yet, but it’s been attempted. To make it work, your shopping cart must be able to identify the customer and whether they have been shopping with you before. All in the cart. That can be difficult.