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Are you currently avoiding affiliate voucher codes and offers due to the worry of its effect on your brand’s perception? Are you pushing too much distress marketing on your website? Allow me to take you through an anecdotal approach to tactical consumer offers.

Not that I want to start this piece with too much doom and gloom, but we are still in a recession. Despite market movements and bank bailouts we are still in the midst of tough times and what better way to prove this than with a quick quiz.

Of the three celebrities below, who (according to the very clever guys at Hitwise) is the most-searched-for personality in the UK?
A.      Cheryl Cole
B.      Barrack Obama
C.      Martin Lewis

Surely it has to be Obama? The passionate new world leader? Surely? No.

Oh ok then the UK’s favourite girl and band member of Girls Aloud, Cheryl Cole?

No.

It is Martin Lewis with his Money Saving tips.  So even though we are considered to be a nation fascinated by celebrity, we are clearly more captivated by a bargain.

Challenging times to promote brands & products

So as marketers how do we address this? We all witnessed or were part of the distress discounting led by the large retail stores last Christmas, where consumers were trained to shop a sale; this wasn’t helped by the media either, who championed this type of shopping.

Most worryingly, what is all this distress mass discount messaging doing to the reputation of our brands? I am sure that if Selfridges were to run 20% off all items, in the short term it would drive more footfall and revenue to the store.  However, what would happen in the long term? Would customers ever buy full price merchandise from mid-tier department stores, who constantly run “up to” and “from 70% off” promotions? I definitely feel that loyal customers are becoming less confident in their aspiring advertisers and falling out of love with the brand, as shopping becomes focused on paying the lowest price rather than an engaging experience, highlighted by the retail WOW factor.

Smart advertisers who want to swim clear of tough economic waters know that they need protect their brand whilst competing on price and protecting their product margin.  They need their brand to inspire their loyal customers who will continue to purchase from the store or via the website because of those brand values.  They also need to protect their profit margins by reducing the amount of distress discounting and promoting solid products that have clear USPs – but still need to trade in these tough conditions by providing an offering for the discount focused market.

So with warehouses stockpiling dusty, unsold products, how can retailers reduce the business cost of stocking last season merchandise? How to move these products and produce a profit without damaging the brand values and without shouting from the roof tops – SALE......?
 
It all lies in segmentation marketing!

It is the simple forms of segmentation that are often the best, so let me share a marketing campaign which was run last year by a large department store were using strong relations with an affiliate partner they were able to push out an offer to target the right customer at the correct time to great effects without upsetting the masses.

The Challenge

After stock take, it became clear that there were a significant number of DKNY bath robes.  The big issue was that these were the previous year’s style and we had just received our allocation for the current season. As a result, the Operations Director was paying to move, pick, pack and keep warm out dated products. The obvious solution would be to discount the old stock and promote it on the site, but it was important to protect the DKNY brand, which meant no discount messaging, which would degrade the reputation and margin of the current year’s stock.

The Solution

Working closely with an affiliate partner, the department store was able to specifically target the thrifty customer with a below the fold offer. The old stock was live on the website, but not merchandised for general browsers on the site.  Instead there was one strong link to the product from one of the UK’s hot deal websites. 

The Result

The old season robes were promoted solely by one affiliate website.  Their subscribers quickly rated the deal and it became their daily top offer. The old robes sold out in 30minutes. For the savvy online shopper, who recognised the brand prestige and quality, the robes were a sensational offer.  Those shoppers had grabbed a bargain and were no doubt basking in the glow of being part of a secret members club whom had personally received a deal – it appeared as though it was for their eyes only!

A point backed up by Duncan Jennings, Founder of Vouchercodes.co.uk "Sales are ran too often and people are becoming blind to them. Savvy shoppers want to feel part of the discounting process and hunting down a voucher code, entering it at the checkout and actually seeing the total reduce is a very rewarding experience."

The homepage of the department store’s website continued to push full price and premium brands and traded; business as usual.  They were able to merchandise and push the new season DKNY robes at full price, maintaining the brands premium position whilst protecting their margin.  However, I am convinced if they had attempted to run a brand wide DKNY discount, neither the old nor the new stock would have sold as well – and would definitely not have sold out!

Using this approach tactically, they managed to sell out on seemingly unwanted products, reducing the operation costs but leaving bargainista customers with a positive retail experience (who with some timely and targeted CRM, could then be traded up to full RRP purchases) and ensuring they didn’t harm any future full price brand promotions.

Five affiliate voucher code tips to takeaway

One – Do the math; ensure you are protecting your margin including the money off! Do not discount for the sake of it and remember “It’s all about the margin”.
Two - Ensure the voucher code website is adhering to the new IAB voucher code guidelines.
Three - Effectively communicate the offer to your affiliate network and/or outsourced affiliate agency plus affiliates with as much lead time as possible.
Four - Have clear Terms & Conditions both for the affiliate and the consumer.
Five - Ensure your wider internal team are made aware of the offer – especially your Customer Services team; every action has a reaction!

Chris Bishop

Published 6 May, 2009 by Chris Bishop

Chris Bishop is Founder & CEO of 7thingsmedia and a contributor to Econsultancy. He can also be found on Twitter and LinkedIn.

16 more posts from this author

Comments (2)

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MarDeck

Interesting post. More retailers should read the information. I have run the gamut from flea market, retail, wholesale, Internet, door to door, party, network marketing and garage sales whilst following a lot of the information contained here because it just makes common sense.One major benefit is that it works. Thanks

about 7 years ago

Alec Kinnear

Alec Kinnear, Creative Director at Foliovision

It's all great until your regular shoppers realise they are being left out in the cold.

Counter position: reward your best customers with a special offer, where they get these discounted items as a bonus.

about 7 years ago

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