Coupon Code Compliance – Live Blog Post from #AMDays

April 16th, 2013 by

 

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

>

Affiliate deduces commission in exchange for the exclusive discount

>

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

Leave a Reply