Affiliate channel shoppers often spend more than the typical online shopper, according to a recent study commissioned by Performics, the Chicago-based performance marketing division of DoubleClick.
The comScore Networks analysis focused on 63 merchant sites with active affiliate marketing programs across all three major affiliate marketing networks and 19 large affiliate publisher sites. The analysis was conducted during the first half of 2006, using Reston, VA-based comScore's panel of 1 million U.S. consumers who have given permission to confidentially capture their browsing and online transaction behavior.
Findings of the study include:
* Shoppers who visit merchant sites from affiliates tend to be wealthier, spend more, and more ready to buy. Affiliate shoppers are 17% more likely than the average Internet user to have average household income greater than $75,000.
* Affiliate shoppers skew older than the total Internet population (32% are between 45 and 64 years old). In addition, they are 4% more likely to have children in their households than the typical Internet shopper.
* Of those consumers who did purchase through the affiliate channel, their average online order value was higher than that of the general Internet user. During the second quarter of 2006, affiliate shoppers spent an average of $112, while the average for total Internet sales was $105.
* Affiliate consumers are 43% more likely to convert into a sale than consumers directed by other referrals, which were defined as all activity that did not come directly to the merchant site or arrive via an affiliate link
by multichannelmerchant.com
Mostrando postagens com marcador merchants. Mostrar todas as postagens
Mostrando postagens com marcador merchants. Mostrar todas as postagens
terça-feira, 10 de julho de 2007
segunda-feira, 9 de julho de 2007
Drive Consumers with Online Coupons
The founder and CEO of ZiXXo shares marketing tactics on how to tap into consumers' purchasing behavior with online coupons.
In the early days of ZiXXo, we used to walk the streets selling online coupons, to get a taste of the issues we were facing. Businesses loved the idea of online coupons for a variety of reasons. But then we would ask them what offer they would use. At that point, they would look like a deer in the headlights, and eventually say "Uh…10 Percent Off?"
The problem is that a 10 percent discount may result in a temporary increase in business, but at the expense of profits. Let me demonstrate with an example where the average transaction value is $100:
Full price scenario:
• Gross margin: 50 percent
• Transaction: $100
• Gross profit: $50
10 percent discount scenario:
• Gross margin: 50 percent
• Transaction: $125
• Gross profit (before discount): $62.50
• Discount (10 percent): $12.50
• Gross profit (after discount): $50
So, in order to earn the same profit, the coupon would have to grow your business by 25 percent. Of course, you may win valuable long-term business, but then these sorts of price-sensitive consumers are likely to jump to a competitor if you don't continue to discount.
Now consider a coupon offer that drives favorable consumer behavior. In this case let's encourage consumers to earn a discount by purchasing more. The actual offer is "$20 Off Purchases of $200 or More.."
Discount scenario:
• Gross margin: 50 percent
• New average transaction: $200
• Gross profit (before discount): $100
• Discount: $20
• Gross profit (after discount): $80
Using this coupon offer you reward only those consumers who are willing to spend $200 in order to earn their savings. Instead of making $50 on a $100 transaction, you are making $80 on a $200 transaction. You'll also note that we didn't use a 10 percent discount, but instead defined a specific dollar value for the discount. In the user's mind they are getting a 10 percent discount, but almost all consumers will actually spend more than $200, while the discount remains fixed at $20.
Offering consumers a deal to encourage increased spending is nothing new. In the online world, Amazon realized that their average transaction was $8. So they offered free shipping for orders of $25 or more. I always buy more than $25 worth of books, because I hate to pay for shipping.
In the offline world, an example is the fast food "Meal Deal." By combining the sandwich, fries and soft drink the consumer gets a discount. Then the restaurant offers to supersize that meal for "just a little more," further increasing the average transaction value. Of course, the portions that are increased are the fries and soft drink, which have the largest profit margin.
You'll also note that in this example, consumers who continue to spend less than $200 gain no benefit. This results in a segmentation of the consumers into those who are willing to spend more to get a discount, and those who aren't. Customer segmentation is an important aspect of most successful coupon offers.
Just how effective are coupons? Well last year some of the largest and most successful companies in the world (e.g. P&G, McDonalds, et cetera) offered a total of 323 BILLION coupons in the United States alone. Also consider that over 50 percent of the Sunday newspapers are purchased for the coupons, and 79 percent of all U.S. residents use coupons. People love coupons.
In order to tap into this demand for coupons you need to determine what consumer behavior you want to reward, and then figure out a suitable reward. Here are a few generic examples that achieve various business objectives:
Trying to gain new customers?
• 15 Percent Off of Your First Order
• Sign-up Now and Get 3 Months Free
• Free Introductory Lesson
Want to reward repeat business?
• Your 5th Sandwich is Free
• Your Second Session is ½ Price
• Every 5th Order is 50 Percent Off
Looking to introduce new products or sell excess inventory?
• 15 Percent Off All Dive Computers
• 10 Percent Off Our Gold Package
• 2005 Snowboards 70 Percent Off (while they last)
Need to grow business during slow times?
• 33 Percent Off Midweek Rentals
• $.50 Off Any Coffee Drink Weekdays 10AM - 3PM
• $3 Off Haircuts Weekdays 10AM - 3PM
• Early Bird Special 15 Percent Off All Entrees Before 5PM
Other business objectives include:
• Capitalizing on seasonal or special events
• Increasing your average transaction size
• Generating customer referrals
Most marketing people believe that coupons simply grow revenue at the expense of profits; in other words, buying your customers. However, the true power of coupons is the ability to drive favorable consumer behavior. The trick is to determine what favorable behavior you wish to encourage and then define a coupon offer that rewards that behavior.
Mike Hogan is the founder and CEO of ZiXXo a web 2.0 service for creating, managing and syndicating online coupons, using a pay-for-performance business model. In addition to providing sample coupon offers, ZiXXo's 1-Click Coupons auto-generates custom coupons for individual businesses, with offers specific to the merchant's business category…10 Percent Off is NOT one of these offers.
By Mike Hogan
In the early days of ZiXXo, we used to walk the streets selling online coupons, to get a taste of the issues we were facing. Businesses loved the idea of online coupons for a variety of reasons. But then we would ask them what offer they would use. At that point, they would look like a deer in the headlights, and eventually say "Uh…10 Percent Off?"
The problem is that a 10 percent discount may result in a temporary increase in business, but at the expense of profits. Let me demonstrate with an example where the average transaction value is $100:
Full price scenario:
• Gross margin: 50 percent
• Transaction: $100
• Gross profit: $50
10 percent discount scenario:
• Gross margin: 50 percent
• Transaction: $125
• Gross profit (before discount): $62.50
• Discount (10 percent): $12.50
• Gross profit (after discount): $50
So, in order to earn the same profit, the coupon would have to grow your business by 25 percent. Of course, you may win valuable long-term business, but then these sorts of price-sensitive consumers are likely to jump to a competitor if you don't continue to discount.
Now consider a coupon offer that drives favorable consumer behavior. In this case let's encourage consumers to earn a discount by purchasing more. The actual offer is "$20 Off Purchases of $200 or More.."
Discount scenario:
• Gross margin: 50 percent
• New average transaction: $200
• Gross profit (before discount): $100
• Discount: $20
• Gross profit (after discount): $80
Using this coupon offer you reward only those consumers who are willing to spend $200 in order to earn their savings. Instead of making $50 on a $100 transaction, you are making $80 on a $200 transaction. You'll also note that we didn't use a 10 percent discount, but instead defined a specific dollar value for the discount. In the user's mind they are getting a 10 percent discount, but almost all consumers will actually spend more than $200, while the discount remains fixed at $20.
Offering consumers a deal to encourage increased spending is nothing new. In the online world, Amazon realized that their average transaction was $8. So they offered free shipping for orders of $25 or more. I always buy more than $25 worth of books, because I hate to pay for shipping.
In the offline world, an example is the fast food "Meal Deal." By combining the sandwich, fries and soft drink the consumer gets a discount. Then the restaurant offers to supersize that meal for "just a little more," further increasing the average transaction value. Of course, the portions that are increased are the fries and soft drink, which have the largest profit margin.
You'll also note that in this example, consumers who continue to spend less than $200 gain no benefit. This results in a segmentation of the consumers into those who are willing to spend more to get a discount, and those who aren't. Customer segmentation is an important aspect of most successful coupon offers.
Just how effective are coupons? Well last year some of the largest and most successful companies in the world (e.g. P&G, McDonalds, et cetera) offered a total of 323 BILLION coupons in the United States alone. Also consider that over 50 percent of the Sunday newspapers are purchased for the coupons, and 79 percent of all U.S. residents use coupons. People love coupons.
In order to tap into this demand for coupons you need to determine what consumer behavior you want to reward, and then figure out a suitable reward. Here are a few generic examples that achieve various business objectives:
Trying to gain new customers?
• 15 Percent Off of Your First Order
• Sign-up Now and Get 3 Months Free
• Free Introductory Lesson
Want to reward repeat business?
• Your 5th Sandwich is Free
• Your Second Session is ½ Price
• Every 5th Order is 50 Percent Off
Looking to introduce new products or sell excess inventory?
• 15 Percent Off All Dive Computers
• 10 Percent Off Our Gold Package
• 2005 Snowboards 70 Percent Off (while they last)
Need to grow business during slow times?
• 33 Percent Off Midweek Rentals
• $.50 Off Any Coffee Drink Weekdays 10AM - 3PM
• $3 Off Haircuts Weekdays 10AM - 3PM
• Early Bird Special 15 Percent Off All Entrees Before 5PM
Other business objectives include:
• Capitalizing on seasonal or special events
• Increasing your average transaction size
• Generating customer referrals
Most marketing people believe that coupons simply grow revenue at the expense of profits; in other words, buying your customers. However, the true power of coupons is the ability to drive favorable consumer behavior. The trick is to determine what favorable behavior you wish to encourage and then define a coupon offer that rewards that behavior.
Mike Hogan is the founder and CEO of ZiXXo a web 2.0 service for creating, managing and syndicating online coupons, using a pay-for-performance business model. In addition to providing sample coupon offers, ZiXXo's 1-Click Coupons auto-generates custom coupons for individual businesses, with offers specific to the merchant's business category…10 Percent Off is NOT one of these offers.
By Mike Hogan
Ten Tips for Online Couponing
If I’ve learned one in my career in retailing and the Internet, it is that people love the opportunity to save money. And they hate it when somebody else is getting a bargain when they aren’t. This is how I got started in the online couponing business. I noticed when I was checking out online there were boxes for discount codes, and I never had any.
Online shopping is still in its infancy, but it continues to experience tremendous growth as retailers amplify security measures and people simply become more comfortable with the process and the convenience. But right off the bat, the idea of “couponing” was part of the Internet shopping experience. And in the three years I’ve been operating CouponCabin.com, I’ve been able to take notice of what works well for retailers offering discounts for online shopping and what doesn’t. These are my top 10 tips for Internet merchants.
1. When creating coupons for the first time, merchants tend to forget that they must create coupons that appeal to a wide audience and are simple to apply. One of the most common mistakes is creating a coupon that is valid only for a specific product or product category. Alternatively, merchants will create coupons that appear general but actually include as many as 30 or more brand and product exclusions. In limiting the product range, merchants are also limiting potential customers.
2. A complicated coupon code is another common problem among merchants using coupons for the first time. Many users tend to write down coupon codes on paper before entering them, so long and complex codes leave room for error. Coupon codes should be short and simple and should avoid using characters that can be misinterpreted, so as “0” and “O.”
3. It is a safe assumption that a greater discount will result in a higher conversion rate, but here are some additional best practices for creating effective coupons:
- Offer a solid discount of at least 5%.
- Keep the coupon generic to all orders or a category.
- Establish a coupon expiration date to create a sense of urgency.
- Create a clear landing page recognizing the discount.
4. Coupons offering a flat rate discount in dollars, such as $10 off a purchase of $50 or more, are very popular. These coupons tend to attract more clicks and have a better conversion rate for sites whose average order totals less than $100. Alternatively, sites with an average transaction size of more than $100 find that coupons offering a percentage discount, such as 10% off a purchase of $100 or more, often perform better. And coupons that provide a discount with a low minimum purchase threshold, such as $5 off a $15 purchase, or even no minimum at all, such as $10 off any order, consistently result in high conversion and clickthough rates.
5. Merchants commonly try to create coupons with a minimum spending requirement that is higher than their average order. By imposing such a minimum spending requirement, the merchant is subtly suggesting that the consumer add an extra item or two to their product order. An example might be a book merchant whose average order is two items totaling $40. Recognizing this average, the merchant would typically offer a 10% off coupon for orders of $60 or more, thus enticing the consumer to add another item to his order to meet the minimum.
6. Free-shipping coupons are also quite popular with merchants, as they consistently perform well. With shipping costs constantly on the rise, consumers take advantage of these coupons, particularly for sites that would normally charge more than $6 in shipping fees.
7. Because new customers typically have larger orders than repeat customers, many online merchants now try to attract first-time buyers by offering them greater discounts. Whereas repeat customers may expect coupons offering 10% off their order, new patrons might enjoy a 15% discount for their first purchase.
8. Another rule of thumb is that user-friendly coupons lead to higher conversion rates. Overall, coupons have a better performance when they can be activated from the user’s click, thereby skipping the step where the consumer must enter the coupon code during the checkout process.
9. At checkout, sites that do choose to use coupon codes should keep their entry boxes clearly marked so that users can find them easily. Entering the coupon code or clicking on the link should activate the code and allow the user to see his discount. It is best that the discount be seen as a line item in the shopping cart before the customer completes the transaction so that the savings are visible and the consumer knows that the discount has been applied.
10. Finally, coupons should be linked to a specific page. Merchants new to the world of Internet coupons will sometimes link a category-specific coupon to a generic landing page, leaving the customer to search for the discount or appropriate page. Merchants should make every effort to link a coupon directly to a landing page that represents the discount. By customizing this landing page, merchants save the consumer time and ensure the shopper that his coupon has been activated. This simple task typically results in considerably higher conversion rates.
Overall, the performance of a coupon is largely dependent on where it can be found on the Web. A more established site will have the ability to generate repeat traffic and develop a loyal consumer base familiar with the concept and use of online coupons. As such, these established sites will see higher conversion rates than sites that are relatively unknown.
Scott Kluth is the president/founder of CouponCabin.com, an online aggregator of consumer discount codes/coupons in Internet retailing.
By Scott Kluth
Online shopping is still in its infancy, but it continues to experience tremendous growth as retailers amplify security measures and people simply become more comfortable with the process and the convenience. But right off the bat, the idea of “couponing” was part of the Internet shopping experience. And in the three years I’ve been operating CouponCabin.com, I’ve been able to take notice of what works well for retailers offering discounts for online shopping and what doesn’t. These are my top 10 tips for Internet merchants.
1. When creating coupons for the first time, merchants tend to forget that they must create coupons that appeal to a wide audience and are simple to apply. One of the most common mistakes is creating a coupon that is valid only for a specific product or product category. Alternatively, merchants will create coupons that appear general but actually include as many as 30 or more brand and product exclusions. In limiting the product range, merchants are also limiting potential customers.
2. A complicated coupon code is another common problem among merchants using coupons for the first time. Many users tend to write down coupon codes on paper before entering them, so long and complex codes leave room for error. Coupon codes should be short and simple and should avoid using characters that can be misinterpreted, so as “0” and “O.”
3. It is a safe assumption that a greater discount will result in a higher conversion rate, but here are some additional best practices for creating effective coupons:
- Offer a solid discount of at least 5%.
- Keep the coupon generic to all orders or a category.
- Establish a coupon expiration date to create a sense of urgency.
- Create a clear landing page recognizing the discount.
4. Coupons offering a flat rate discount in dollars, such as $10 off a purchase of $50 or more, are very popular. These coupons tend to attract more clicks and have a better conversion rate for sites whose average order totals less than $100. Alternatively, sites with an average transaction size of more than $100 find that coupons offering a percentage discount, such as 10% off a purchase of $100 or more, often perform better. And coupons that provide a discount with a low minimum purchase threshold, such as $5 off a $15 purchase, or even no minimum at all, such as $10 off any order, consistently result in high conversion and clickthough rates.
5. Merchants commonly try to create coupons with a minimum spending requirement that is higher than their average order. By imposing such a minimum spending requirement, the merchant is subtly suggesting that the consumer add an extra item or two to their product order. An example might be a book merchant whose average order is two items totaling $40. Recognizing this average, the merchant would typically offer a 10% off coupon for orders of $60 or more, thus enticing the consumer to add another item to his order to meet the minimum.
6. Free-shipping coupons are also quite popular with merchants, as they consistently perform well. With shipping costs constantly on the rise, consumers take advantage of these coupons, particularly for sites that would normally charge more than $6 in shipping fees.
7. Because new customers typically have larger orders than repeat customers, many online merchants now try to attract first-time buyers by offering them greater discounts. Whereas repeat customers may expect coupons offering 10% off their order, new patrons might enjoy a 15% discount for their first purchase.
8. Another rule of thumb is that user-friendly coupons lead to higher conversion rates. Overall, coupons have a better performance when they can be activated from the user’s click, thereby skipping the step where the consumer must enter the coupon code during the checkout process.
9. At checkout, sites that do choose to use coupon codes should keep their entry boxes clearly marked so that users can find them easily. Entering the coupon code or clicking on the link should activate the code and allow the user to see his discount. It is best that the discount be seen as a line item in the shopping cart before the customer completes the transaction so that the savings are visible and the consumer knows that the discount has been applied.
10. Finally, coupons should be linked to a specific page. Merchants new to the world of Internet coupons will sometimes link a category-specific coupon to a generic landing page, leaving the customer to search for the discount or appropriate page. Merchants should make every effort to link a coupon directly to a landing page that represents the discount. By customizing this landing page, merchants save the consumer time and ensure the shopper that his coupon has been activated. This simple task typically results in considerably higher conversion rates.
Overall, the performance of a coupon is largely dependent on where it can be found on the Web. A more established site will have the ability to generate repeat traffic and develop a loyal consumer base familiar with the concept and use of online coupons. As such, these established sites will see higher conversion rates than sites that are relatively unknown.
Scott Kluth is the president/founder of CouponCabin.com, an online aggregator of consumer discount codes/coupons in Internet retailing.
By Scott Kluth
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