Season 03 / Episode 003
Reaching discount buyerswithout risking full-margin acquisition
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This episode takes a look at a problem one of our clients is having: How to generate revenue from discount buyers without risking the full margin from other shoppers.
In response, Jamie lays out a three part strategy that will reach those new audiences without risking that full-margin shopper. It can happen!To achieve this, you’ll need a mixture of technology strategy and a full testing methodology. Jamie talks about the technology needed for couponing and protection, how to manage your T&Cs, and what an actual test looks like.
Take a listen and let us know if you need any help with this we would love to work with you and help you execute a strategy that allows you to reach new customers who are discount oriented without risking the full margin customers you’re already getting directly. Email us at email@example.com and we’ll get back to you as quickly as possible.
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[00:00:48] Well, hello out there. Welcome to the Profitable Performance Marketing podcast. I’m Jamie Birch, your host and founder of JEBCommerce, your award winning affiliate management agency. Today, we are going to be talking about reaching discount audiences without risking the margin on full price shoppers.
[00:01:09] Can you even do that? I think you can, and we’ve done it. So we’re going to walk through that strategy and what are the things that you definitely need to have the showstoppers and really what to do. So before we get into the topic of reaching discount audiences without risking full price margin want to talk to you about our new service tiers.
[00:01:30] So if you go to jebcommerce.com/elements, I’m going to do that right now. You go there, you’re going to find five different service levels. One thing we noticed in the industry and we’ve done for a long time as well is it’s not been very clear what service levels are available, what those prices are, and what is done as far as affiliate management for each of those levels.
[00:01:53] Well, our new CEO, Jake Fuller came in and that was one of the strategies and things he wanted to clear up right away. So, you can go now and see the pricing and see all of what is done in each price level. And you may find that you just need the essentials done. Our Bronze program starts at $1750 a month and that is available with no contract. You can go for one month, you can go for 10 years. So go to jebcommerce.com/elements and learn more about which service level may be working for you.
[00:02:25] Okay, let’s get back to the topic du jour, the topic of the day, and that is basically a question one of our clients had is, are you able to reach discount audiences, but I don’t want to risk the customers that are already coming through us that are paying full price.
[00:02:46] So this is a pretty common problem, a common thing that people try to tackle is I want to go out and reach those audiences, but I’m already getting a, a million, 300 million, whatever that is of shoppers that are already coming to me. They already know who I am and they tend to shop without a discount. So I don’t want them to get one. So I, can I use a promotion, a discount, a coupon? Can I use that to only attract those shoppers who need that to make the sale and ones I haven’t had yet?
[00:03:19] So yes you can is the answer. This is a really great strategy to be thinking of. So if you’re thinking of it, you’re on, you know, you’re on the right page. You’re on the right path. This is definitely something you can do. Affiliates are pretty complex and they, they run the gamut of where they meet the customer in the in their journey their path to purchase as well as how they do that and what types of behavior They they’re able to garner from their customers and what they’re able to provide you.
[00:03:48] So it’s really good to think about and break those out into different types and what you can do with each one and totally understand you don’t want to discount to the point where you’re giving away margin that you would have gotten anyway. So how do you do that? Well, you really need a mixture of strategy and technology.
[00:04:07] Both of these things come into play. And I will say this, if you’re not willing to go down this road, excuse me, then don’t, but these things are all like, you have to have these in place. So let’s talk about the tech that you need. And some of these, a lot of the veterans listening to this, you may be thinking, well, obviously. Well, we’re not going to take anything for granted right now.
[00:04:30] There are no “obviouslys” in this podcast episode, we’re going to go over all those things because we have encountered them over the 19 years that I’ve been running this agency, the 24 years I’ve been in the space, maybe 25 now, 24 and working on hundreds, well over 300 different affiliate programs.
[00:04:49] I can tell you, not everyone sees these as kind of duh moments that we need these. But okay, let’s go over the, the tech that you need to have in place so you can reach discount audiences without discounting the margin of shoppers who don’t need a discount.
[00:05:04] So the first one you need the ability. To give coupons in any way. Now, most of the clients we’ve worked with over the years they have that capability, but there have been probably a dozen. They just couldn’t do that. And you’re probably thinking, yeah, Jamie, those are probably like early Shopify or smaller sites on WordPress or something like that.
[00:05:27] No, no, we have had multi channel retailers that have 150 stores nationwide that could not offer a coupon online. They just couldn’t do it. So the first thing is you have to have the ability to do that. Now, in the current instance that we’re walking through is they are so worried and so concerned about discount shoppers, about people being able to grab a coupon that would have bought anyway that they will not allow coupons to be offered on the site.
[00:05:58] So I totally understand that. I understand the fear. I empathize with them. But if you can’t do a coupon, you can’t target discount shoppers. You simply can’t. There are ways to do it, but it’s very hard and the success level is going to be very low. So the first thing is you need to be able to offer coupons through your channel.
[00:06:20] So that needs to happen. Then you need to be able to offer and provide coupon codes to very specific affiliates. So now we’ve established, you need a coupon code, but now you actually need to be able to give this coupon code to this affiliate. So that has to happen. Now why, why do we do this? We’ll go over this in more detail on this episode, but you really want to be able to find the affiliates that are bringing you discount shoppers and you want to maximize and optimize for those.
[00:06:50] So you want to be laser focused and say, affiliate a offers me discount shoppers. I only want them to be able to offer this coupon code. And here’s the coupon code because I want more of those discount shoppers. That’s what I’m looking for. So you want to be able to give coupons, you want to be able to make coupons and offer them to specific affiliates.
[00:07:10] You also want the ability to refuse commissions on unapproved coupon use. So we’re going to get that in more in detail in the strategy section, but you want to be able to say they shouldn’t have gotten that and I’m not going to pay you a commission on top of that.
[00:07:28] That’s going to help you to manage your partners and what they do. So the next thing is as far as tech you want to have some sort of cart sniping protection. Most of the networks have something that they can protect and not commission on an affiliate coming in right at the end within say the last 30 seconds of an order where the customer jumps out, grabs a coupon, and comes back in and they get credit.
[00:07:53] You’d make, you want to de incentivize that sort of behavior from happening. So a lot of this, what we’re going to talk about is proper incentives and the technology to actually take care of those incentives.
[00:08:05] So you want to make sure you have coupons. Give specific affiliate coupons. Ability to refuse commissions on unapproved coupons and cart sniping protection. Now, one of the other things you really want to be able to do is a single use coupon, new customer coupon only so that no one can get that unless they’re a new customer.
[00:08:29] So that’s a little more advanced and that’s more of your backend system, but you want to, you know, does your system allow you, to in the cart, match back, does that household or that email address have they ever shopped before they have not, then they’re qualified for that discount or they don’t get the discount. So if you have that ability to make sure that that person doesn’t get the coupon, then you definitely want to have that tech set up as well.
[00:08:58] Are you enjoying the show so far? You know running an affiliate program can be very complicated. Running a highly successful affiliate program that grows year after year, well that can be even more difficult. At JEBcommerce we’ve been managing affiliate programs for over 17 years in almost every retail category you can imagine.
[00:09:21] With that experience comes a ton of successes and we want to share that with you so you can learn what to do to grow your affiliate program. So we have a section on our website entitled case studies. You can access this page by going to jebcommerce.com/CaseStudies. In this section of our website, you’ll find industry specific case studies, such as our new travel category case study, strategies and tactics we’ve used to grow incremental sales with our clients, an outline of many different tactics, strategies that we’ve executed and partnerships that we’ve cultivated and created.
[00:09:57] In order to grow our clients programs substantially year over year and much much more now I want you to have access to these 100 for free Simply because you’re a listener of this podcast. You can access these by going to jebcommerce.com/casestudies. Now back to our show.
[00:10:17] Now let’s move on to some of the strategy sessions. Now we’re going to try and keep this to under 20 minutes. If you need help figuring this out, you want to walk it through with me, just email me at firstname.lastname@example.org. Either myself or our CEO, Jake Fuller we’ll step in and help you with this, but this can be pretty complex.
[00:10:36] We’re going to go over the basics and we’re going to go over all the stuff, but you can go into these really deeply. You may want to put this one on rewind and go back and forth, but also we’re here to help you with that.
[00:10:47] So on the strategy, the first thing you want to do is make sure your terms and conditions outline your coupons’ do’s and don’ts.
[00:10:57] What is a commissionable order? What do you allow as far as coupon? Do you have a clause in there that say any orders coming from an unapproved coupon usage will not be commissioned? Do you lay out how they get, or what is an approved coupon? Make sure that is in your terms and conditions. So exactly how you’re going to offer these, what is available, what is acceptable.
[00:11:26] On many of the programs we offer, we let them know you cannot promote any coupon unless it’s an approved coupon. And an approved coupon is defined as one provided by your affiliate manager at JEBCommerce or the client. Sometimes we even get really specific and say in there, if you didn’t get it, in writing from Jamie Birch, your affiliate manager, it’s not a qualified coupon, so you want to make sure that that’s in there so you can go back and say that you can’t be promoting this coupon and then you want to work with specific and cooperative coupon partners.
[00:12:01] Not every affiliate is going to fall into this strategy. So what affiliate partners do you have that are driving a heavy amount of discount shoppers? That could be driving a heavy amount of discount shoppers? Maybe they have those discount minded shoppers, but they’re not sending it to you. They have the opportunity to send you more.
[00:12:20] Who are those and which ones can you work with that want to work with you on this particular problem? You want to work with those partners to make sure that those codes aren’t offered through their social channels or their search rankings. So you want to make sure that they don’t pop up for brand plus coupon that you want them to target those discount shoppers themselves and not take advantage of all the brand building.
[00:12:48] So you’re going to need to find the cooperative affiliate partners. Not everyone will do this. So you want to make sure that you’re really laser focused targeting on what you can do and what they’re doing. So I want you to focus on these specific types of activities and they’re not search rankings and they’re not social media.
[00:13:09] And then with those partners, you want to increase the cash back when you do that. So you’re going to negotiate with all of these on the consumer discount, you’re going to provide them how they’re going to promote that discount and I would increase cash back so that you can get more exposure for this particular thing.
[00:13:28] Many of the affiliates you work with, they are what I call database affiliate partners. And you can call them cash back. You can call them loyalty, but a lot of them they have members, they have a database of customers that they work with and they know a ton about them.
[00:13:45] So you can do a lot together to target customers that have not shopped with you before and get really down to the nitty gritty and very niche focused, very detailed in that you’re only going to promote this offer to people who haven’t that they have members they have that have not shopped with you yet.
[00:14:06] Now, when you do something like that, you are going to have to pay for that. It costs to get that level of granularity and that level of focus. But again, we’re talking about reaching audiences that are discount minded, and they’re not shopping from you before. And we want that to be protected.
[00:14:23] So it’s always like, I go to my mechanic. And he says, “look, the work can be cheap, it can be fast, or it can be good. You get to pick two of those.” This is sort of the same thing. If you want all three of those, well, you know, it’s not going to be cheap. So if you want fast and good, it’s not going to be cheap. If you want new and you want, they’ve never shopped with you before and they’re discount minded, you’re going to pay for that targeting, but that’s okay.
[00:14:49] Remember, we’re trying to expand the reach of what we’re doing and not impact any of the full price shoppers. So those are some of the tech, some of the strategy. And one of the last things I’ll say about this is you want to test and test. Just because you tested with one affiliate one time a year, one campaign that just told you one data point.
[00:15:11] It didn’t tell you how they’ll do with a different offer, a higher cash back, a different product, different creative at a different time of the year, or how does the first, second and third test impact each other? Maybe the first test wasn’t very good, but the second really picks up and the third was too much.
[00:15:27] I’ve actually done this with a rewards company several times and we spent, we had a $90,000 placement for a client and on that weekend, that first placement went out very targeted. It went to dual income members who’ve never shopped with the client before, but they have shopped with other retailers like them in the last six months.
[00:15:50] So it got very, very targeted. It generated a 10 times ROI, almost a million dollars in revenue. So we’re like ” we got to do that again.” And the second one generated about half and we’re like, all right, well, let’s see if the third one, third one hardly did anything, but we learned from that. We learned that we got a little too saturated.
[00:16:09] We did those three too close together, and those audiences weren’t going to buy three times. They wanted to buy one and then we needed to space that out, and that’s what we went with after that. So one test isn’t enough. If you only are going to test with one partner, one time, just don’t go through all this process because you’re not going to learn anything that you can really do anything with.
[00:16:31] A good test is a test that happens in multiple ways. So think of it like when we do tracking testing for any of our clients, we will test no less than five orders, different browsers, different affiliates. We even test from different locations, different IPs. We want to test everything. And that’s what a test is trying one campaign once it’s not a test, that’s not going to show much.
[00:16:54] So if you’re trying to do all this and you do it with one partner and someone says, see, it didn’t work. Well, that one didn’t work. There’s a lot more that you can be doing, but you may find some partners, they hurt margin and some don’t. Readjust your test and test again.
[00:17:09] So I would say I try to find five partners to test with five different offers, see what happens. You may find that this didn’t work at all, and you got to go back to the drawing board. You may find two partners worked really well, And want to test them again. And you may want to test those 5, 3 different times, three different parts of the year to really see what’s going on.
[00:17:31] So after each test, determine what your learnings are, determine what you’ll test next, and then go test again. Again, one test, it shows you almost nothing. So test time of year offers, partner, structure, lifetime value of the customer. You can test all those things.
[00:17:50] And you want to be real clear in your arrangement with each affiliate, because remember, not only are we trying to reach new discount audiences, but we’re trying to protect those audiences that are already shopping with us at full margin. So you have to be able to have that tech installed. And I would say getting down to be able to say, you don’t qualify for that coupon is a way to do that.
[00:18:15] You kind of got to balance that out with customer service issues. But again, this is all going to come down to your ROI equation at the end. So you want to make sure those coupons, you have a whole ton of control over this. Who they’re going out to, when they’re going out, and what’s commissionable and not.
[00:18:32] And so you want to make sure affiliates, they can’t commission unless they were giving that offer. And because a lot of the times affiliates will see coupons on one site, and then they’ll see it on another and they’ll take it and promote it. You want to make sure in your terms and conditions, you say that that can’t happen. The way that the affiliates promote it is going to go a long way to what kind of shoppers you’re going to get.
[00:18:57] And then like the big thing is if you can get down to single use coupon, like if you’ve used this, if you’ve shopped with us before, you can’t use this, a new customer coupon, or you’ve used this coupon once before, or this coupon was used and it’s not valid anymore, that kind of tech will help you get through this.
[00:19:14] So in the end, this is a great strategy. This is phenomenal. You can protect your full margin shoppers and that margin and also go out and find new customers that are discount oriented, will never shop from you without a discount. And the main thing is, is you got to go to where they go and where they go, they go to coupon sites, they go to cash back, they go to loyalty sites.
[00:19:39] So go use them, work with those affiliates that are cooperative. Make sure your terms and conditions are set up. Make sure you have the tech to actually do this and then test, test, test. And when you’re done test again. So you’re probably thinking, well, “Jamie, yeah, I’m an affiliate manager. No one will let me do this.”
[00:19:59] And I’ve been in that role. What I have found that really helps me, is I write down a plan to test this out and it may be a 12 month plan and I write out every test and here’s the hypothesis we’re testing, and here’s how we’re going to measure it, here’s the cost of this campaign, and here’s the potential outcome of this.
[00:20:21] And you go down every single one and look, I’m going to do six campaigns over 12 months, we’re going to work with four different affiliates during that timeframe, and I’m going to test different types of offers, and here’s what I need to tech to be set up. And here’s what we’re doing with the terms and conditions. When you line all that out. And you bring that to your supervisor, your manager, the CEO, the VP of Marketing, the Director of Ecom, they’re gonna see a level of thought that’s really gonna help you get this done, but also help you in your career.
[00:20:55] So, map all these tests out. So that’s basically how you reach discount audiences without risking the margin. You’ve gotta go to where they’re at. You gotta protect through technology and strategy, and you got to test. So I hope this was helpful to you on this. The upside is enormous. Those websites generate a ton of business.
[00:21:17] And you’ve seen these affiliates. They are advertising at the Super Bowl. If you watched it last year, I think there were four affiliate publishers advertising in the Super Bowl. These guys drive traffic that you can’t get on your own. So, if you’re looking to do this, that’s where you gotta go. And you gotta protect yourself through technology, through strategy and through testing.
[00:21:39] Hopefully this helped you out. If you’re going, “Jamie, that was great. Uh, I need a lot more information,” then I’d love to work with you. Email me at email@example.com. We will jump on it right away. I’ll try to include all this in the show notes but email us at firstname.lastname@example.org.
[00:21:56] We’re still looking for new guests for the podcast, so if you’d like to be on the podcast, we’d love to have you. Most of our podcast guests have never been on a podcast before. So if you’ve never done it, you’d be in great company. Just email us again at email@example.com.
[00:22:11] And you know, what would really help us get the word out about this podcast, if you found value in it, other people will too. Just go to the podcast player of your choice and leave us a five star review, share it on Facebook, X, and LinkedIn. And if you know someone in particular who needs to hear this, needs to walk through this, send them this episode.
[00:22:30] And don’t forget if you’re looking for affiliate management help, and you want to see different levels of service and what is involved in that, we would love to, to help you with that. Just go over to jebcommerce.com/elements. That’s jebcommerce.com/elements, and you can check out our packages starting as low as $1750 a month for our Bronze essentials.
[00:22:52] But there you go. Thank you for listening all the way to this point. Let us know what you thought about this and hey, have you tried this before? Let us know whether it worked or not. We’d love to hear from you.
[00:23:02] Thank you.