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.
- 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).
- 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
- Financial cost
- Promotional cost: Does this make it less likely your organization runs the promotions they want to?
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
- 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