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  1. #1
    ...and a Pirate's heart. Convergence's Avatar
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    New VS Existing Customers...
    Merchants, you do realize your affiliates can NOT differentiate between New Customers and Existing Customers - right?

    Of course you do.

    Rewarding your affiliates for NEW customers is one thing. Shoppers come to our sites and are exposed to your brand, click through, and make a purchase. It's a great method for strengthening your brand, gaining additional exposure, and getting life-time customers. Good merchants REWARD their affiliates by offering above normal/industry average rates for new customer acquisition.

    Penalizing your affiliates for returning customers, whether those customers bought once since your site came online, registered on your site but never purchased, or somewhere inbetween is not acceptable. Especially if your policy for return customers is below what is fair compensation for your industry niche as a NORMAL commission rate.

    So, when your old terms were 4% across the board and you announce that you're raising your commission rate to 5% for NEW customers and LOWERING your commission to 1% for 'existing' customers, you are screwing your affiliates.

    The proper thing would be to raise your New customer rate to 5% and LEAVE your Old customer rate at 4%.

    After all, if YOU were doing such a great job retaining your existing customers, why in the world would they ever go anywhere else?
    Salty kisses, Sandy toes, and a Pirate's heart...


  2. #2
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Well said.

    This is a real point of contention, and it is amazing that merchants are unable or unwilling to understand that if the customer were REALLY their customer they would have gone directly to their site and not have come looking for something better or something cheaper on our site.
    Since June 10, 2012 a vegan aarf but still writing the Hound Dawg Sports Blog
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  3. #3
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    Secret Escapes did that but to zero, did a sale, removed their banner after declined.

  4. #4
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    Good idea
    Definitely something for merchants and networks to think about.

    Our merchants pay the same commission rate for return customers which is great as in the pharmaceutical industry, return customers are very common (refill ions), however it may be an idea to bring in increased rates for new customers as we identify this metric to affiliates in our reporting.

  5. #5
    Newbie jojudd's Avatar
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    Great post. I couldn't agree more.

    It's fine to give extra compensation for a new customer, but you should never punish an affiliate for repeat customers.

    A "repeat" customer is so broad. It could be anything from a loyal customer to someone who purchased one time 10 years ago. The affiliate should still be compensated if they drove that customer to your site.

    Additionally, this makes it especially hard for loyalty publishers who award cashback.

    They can post New: % CB, Repeat: % CB, but at this point, customers notice you are giving more for new customers and that's when they either go elsewhere or create a new email address.

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  7. #6
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    Tough subject. To me any customer is a good customer. No matter if it's through affiliate or not. If money is being made, that's great.

  8. #7
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    Great topic! I think the reason they would go elsewhere is to see if they can find a better deal. More often than not, the intent to purchase is already there and extremely high and the affiliate channel is a last stop for some savings more so than the REASON the customer took action. I believe merchant's are willing to pay more for new customers given their knowledge of the long term value and the understanding that existing customers, more naturally than not, come back so the value of the transaction is different to the business' model.

  9. #8
    Influencer Marketing GravityFed's Avatar
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    Good discussion. Been an issue for a while. Convergence great topic, and jojudd (Hi, Jordan!) nails it.

    Hope everyone is having a good Q4!

    I am getting back into the swing of things after 10 month hiatus from affiliate. Plan to be here more often in the coming months...

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  11. #9
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Quote Originally Posted by danlewis8 View Post
    ... I think the reason they would go elsewhere is to see if they can find a better deal. ...
    That translates to the indisputable FACT that that purchaser is NOT the merchant's customer, that they will buy from whoever has the best deal, period. To deny the affiliate their full commission is a meritless, fallacious argument.
    Since June 10, 2012 a vegan aarf but still writing the Hound Dawg Sports Blog
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  13. #10
    Influencer Marketing GravityFed's Avatar
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    I have come across many merchants online over the years that think if a customer buys once from them, they own the customer. At least when it comes to affiliate referrals. It's an uphill battle for sure. EDU goes a long way with some, others don't want to hear it. Agree with Phil!

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  15. #11
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    Quote Originally Posted by Phil Kaufman aka AffiliateHound View Post
    That translates to the indisputable FACT that that purchaser is NOT the merchant's customer, that they will buy from whoever has the best deal, period. To deny the affiliate their full commission is a meritless, fallacious argument.
    Sorry for not being more clear. My comment was more directed around the natural behavior of customers when returning for their second purchase. After being on the merchant's site to identify the product/service they want they then try to find a better offer than was on the site...not a better offer from other merchants. Retaining the customer is brand, experience and intent driven, not channel driven. Very rarely is the affiliate site the first interaction with a customer's second purchase that drove them to want to buy from the brand again. For example, when you shop for your second pair of running shoes from Footlocker, your first interaction with the merchant is a direct nav to the site to find your new pair of shoes. Only then would you leave the site to find a Free Shipping coupon, or something of the nature. I wouldn't disagree that Footlocker in that case would want to pay the affiliate a lower commission, since the intent to buy already existed.

    If consumers used the affiliate channel as the first source of contact and their intent was driven by that contact, I think the argument for higher commissions would be more valid for repeat customers. IMO, when the channel more serves as a cost-savings tool and validation that the price on the site is the best they can get based off of the promotions the merchant supplies the affiliate, the value of the sale is less attributed to the affiliate and more to the natural intent to return.

  16. #12
    OPM/Moderator Hectic GHC's Avatar
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    I'll side with affiliates all day on this issue, but....Setting up the programming on the merchant side to recognize new versus old customers and paying different commissions as a result is not an easy process for the merchant. Getting them to devote the programming time and resources, at any time of the year is a very hard sell. I think Convergence is right. Paying 1% is too low, default commission for content affiliates that bring in existing customers is reasonable. If the technology is in place, the merchant should pay double or triple for new customers.

    That's why I started paying affiliates different commissions based on their model. Content affiliates get the most, traditional couponers get the least. It makes for a balanced program given margins and new vs old crossover. I will argue nose to nose with a merchant that tells me to void sales because the customers have been buying from them for years. The affiliates did their job either way. They deserve something.
    Last edited by Hectic GHC; November 18th, 2015 at 09:42 AM. Reason: agreed with Convergence
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  18. #13
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    Quote Originally Posted by Hectic GHC View Post
    I'll side with affiliates all day on this issue, but....Setting up the programming on the merchant side to recognize new versus old customers and paying different commissions as a result is not an easy process for the merchant. Getting them to devote the programming time and resources, at any time of the year is a very hard sell. I think Convergence is right. Paying 1% is too low, default commission for content affiliates that bring in existing customers is reasonable. If the technology is in place, the merchant should pay double or triple for new customers.

    That's why I started paying affiliates different commissions based on their model. Content affiliates get the most, traditional couponers get the least. It makes for a balanced program given margins and new vs old crossover. I will argue nose to nose with a merchant that tells me to void sales because the customers have been buying from them for years. The affiliates did their job either way. They deserve something.


    Totally agree. I am of the nature to pay commissions for all sales, MUCH higher for new customers and at that 3-5x rate. Couldn't agree more about the different levels of value each affiliate type brings too. X% for existing customers, 5X% for new customers and tiering off of affiliate type is a great model. Well said.

  19. #14
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Quote Originally Posted by danlewis8 View Post
    Sorry for not being more clear. My comment was more directed around the natural behavior of customers when returning for their second purchase. After being on the merchant's site to identify the product/service they want they then try to find a better offer than was on the site...not a better offer from other merchants. Retaining the customer is brand, experience and intent driven, not channel driven. Very rarely is the affiliate site the first interaction with a customer's second purchase that drove them to want to buy from the brand again. For example, when you shop for your second pair of running shoes from Footlocker, your first interaction with the merchant is a direct nav to the site to find your new pair of shoes. Only then would you leave the site to find a Free Shipping coupon, or something of the nature. I wouldn't disagree that Footlocker in that case would want to pay the affiliate a lower commission, since the intent to buy already existed.

    If consumers used the affiliate channel as the first source of contact and their intent was driven by that contact, I think the argument for higher commissions would be more valid for repeat customers. IMO, when the channel more serves as a cost-savings tool and validation that the price on the site is the best they can get based off of the promotions the merchant supplies the affiliate, the value of the sale is less attributed to the affiliate and more to the natural intent to return.
    Absolute garbage.

    When an "existing" [absurd nomenclature under the circumstances] customer goes to the affiliate's site and then ends up back with that same merchant it is despite that merchant being a non-entity to the customer. He has NO loyalty or desire to frequent that merchant and landed back there by sheer happenstance. If I have a link for a blue widget to Merchant X who then lowers their commission rate or raises their prices and I then change out that link to Merchant Y, when then customer comes back to MY SITE and clicks my blue widget link he/she will buy form Merchant Y and couldn't care less that they were not redirected to Merchant X.

    I've said it before - upsetting many on the merchant/OPM/AM/network side, but I'll say it again : This is a scheme designed to screw affiliates out of their rightful commissions. Period.

    Merchants are biting the hand that feeds them. Across the board commissions on consumer goods are lower than ever and dropping every day. This type of scheme is just enough to drive affiliates out of affiliate marketing.
    Since June 10, 2012 a vegan aarf but still writing the Hound Dawg Sports Blog
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    "Raj, there’s no place for truth on the internet." -Howard Wolowitz[/SIZE]

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  21. #15
    Beachy Bill's Avatar
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    For example, when you shop for your second pair of running shoes from Footlocker, your first interaction with the merchant is a direct nav to the site to find your new pair of shoes.
    That is a really poor example and serves to show how unrealistic/ignorant some merchants and affiliate managers are about "shopping" habits. Sure I might go directly back to Footlocker "if" I wanted the exact same shoe. However, we all know that technology changes so I would be looking at my favorite running bloggers and/or running equipment review sites to see what I really want. Footlocker cannot provide that level of expertise/product knowledge. Those bloggers and reviewers should earn some sort of "payment" for sharing their expertise - in the form of affiliate commissions!

    Actually I do not run. I walk a lot because I am a photographer. Now "there's" a niche where technology and models of cameras and lenses change a lot - almost daily. I've been reading the same review sites since their inception.
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  23. #16
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    There is no "Existing Customers" exist. In this digital age, any customers are new customers giving the opportunities of shopping anywhere they want on the net. This "New VS Existing Customers" nonsense need to be stopped. Nothing else, merchants should reward affiliates for bringing first time buyers to their stores, not cutting commission on so called "existing costumers" who might have made ONE purchase in the past 10 years from their stores.

    Take post #11 Footlocker's example,

    First scenario: the customer has Footlocker in mind when he was looking for a second pair of running shoes and came to Footlocker directly, the Footlocker make the sales happen by offering every possible deals they could on their own website so the customer doesn't need to go anywhere else but complete the purchase. Then I will call this customer Footlocker's "Existing Customer" because he went to Footlocker directly and buy his second pair of running shoes without any other channels' help.

    Second scenario: the customer bought a pair of running shoes from Footlocker 3 years ago. Now he is looking for a second pair but decided to search online first. He landed on an affiliate's shoe blog, or a shoe price comparison site, or a deal site, or any affiliate sites about shoes, he read the review, find the best price and click the link, and he is on the Footlocker site. He totally forgot his old pair was purchased from Footlocker site 3 years ago. But the Footlocker database has his name and shipping info as their "Existing Customer". Will I call him the existing customer of Footlocker? Absolutely not. This customer doesn't even remember where he got the first pair of running shoes. Footlocker should thank the affiliate site which lead him to the Footlocker. The least Footlocker can do is to pay the affiliate default commission rate.

    Third scenario: the customer went to Footlocker site directly and have in mind which pair of running shoes he want. He when through shopping cart, saw the "Enter Coupon Code" box and couldn't find the code anywhere on Footlocker's site. What will he do? Simple, leave the shopping cart and search for "coupons" which may or may not exist. He clicked all kinds of coupon sites who claim to have Footlocker's coupon codes. Then he clicked the coupon link to Footlocker's site and finishing the purchase with or without coupon codes. Now will I call this customer the "Existing Customer"? It is tough because he was suppose to be buying directly from Footlocker, but got sent away and a coupon affiliate cookie was set for the last click. To be fair to the last click attribution, the affiliate should get commission(depending how the merchant's setting for coupon affiliates: default commission, reduced commission...). IMHO, it is totally the merchant's fault to turn this possible "existing customer" into a "new customer" by not displaying coupon codes on its own site.

    Bottom line, merchants don't "own" any customers just because they buy once or twice from your sites. If the customer doesn't go directly to the merchant's site and complete the purchase, any affiliates who lead the customer to the merchant's site deserves the commission. If the merchants think coupon hijackers deserve lower commission rate, that's up to them. Merchants who use "New vs Existing Costumers" tactic to cut affiliate commission are clearly trying to screw affiliates over.


  24. #17
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    I agree commissions should be paid on ALL sales and perhaps the "existing" and "loyalty" to a brand is more a factor of the line of business. Different products and services carry a different level of brand loyalty.

    The more natural sites (content/blogging/comparing products) carry more value to a merchant than a coupon site as MayFly's 2nd example proposes. In this situation, there is great value to the affiliate and the commission should be higher. The freedom to go elsewhere and the time since the original purchase are more than reason enough to pay a great commission.

    In the 3rd example, I agree a commission should be paid because the affiliate played a role. I think we can all agree the value the affiliate played in the intent and likelihood to purchase was low and much lower than in the 2nd example. In regards to coupons being available on the site, this may be due to a merchant's promotion strategy. Additionally, keeping promotions on the site reduces the need to go to an affiliate causing affiliates to lose out!


    I do think the conversation regarding the type of affiliate and the payment of commissions may have been overlooked. The original statements suggested paying commissions on ALL sales and tiering based on the value the interaction played in the conversion process. If merchant's are reducing commissions consistently enough to drive affiliates out of the space the it may be suggesting a new market. The digital age certainly has and continues to evolve from consistent commissions across the board. I believe deeper analytics is a part of that, showing merchants where the value is in regards to their bottom lines regarding attribution and lifetime values. Sometimes at the expense of some affiliate interactions and sometimes in other channels.

  25. #18
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    Quote Originally Posted by danlewis8 View Post
    Additionally, keeping promotions on the site reduces the need to go to an affiliate causing affiliates to lose out!
    Right and wrong.

    Keeping promotions on the site might reduce the need of coupon affiliates, but definitely not reduce the need for content affiliates, price comparison sites, review sites and other affiliates. Further more, if merchants keep promotion codes on their own site, customers have no need to leave the shopping cart and go somewhere else to look for that code. If for any reason a costumer has already arrived at the merchant's site, be it by merchant's own PPC effort, affiliate sites referral, or mail list...the only thing the merchant's site need to do is to seal the deal.

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  27. #19
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    Quote Originally Posted by mayfly View Post
    Right and wrong.

    Keeping promotions on the site might reduce the need of coupon affiliates, but definitely not reduce the need for content affiliates, price comparison sites, review sites and other affiliates. Further more, if merchants keep promotion codes on their own site, customers have no need to leave the shopping cart and go somewhere else to look for that code. If for any reason a costumer has already arrived at the merchant's site, be it by merchant's own PPC effort, affiliate sites referral, or mail list...the only thing the merchant's site need to do is to seal the deal.
    +1

  28. #20
    OPM/Moderator Hectic GHC's Avatar
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    Let me tell you something you don't already know. Merchants don't understand affiliates. Most of them are not trying to screw affiliates, they probably think affiliates are trying to screw them. They have no clue what goes on here. They don't care. The only way they will ever know is if an affiliate actually gets in touch with them or they find a proactive manager to explain it to them.
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  30. #21
    Beachy Bill's Avatar
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    I've learned something new in the last two weeks about online shoppers and coupon codes. I created a couple of niche calendars for niche areas here at the beach and am using Zazzle for fulfillment. I promoted these calendars on two of my Facebook pages and provided the "current" Zazzle coupon code. Zazzle also has a coupon code every day AT THE TOP OF EVERY PAGE. I have sold 30 calendars to date and SIX OF THOSE CUSTOMERS PAID FULL PRICE! That's one out of five people who are missing a 20% discount.

    Example: Go to Zazzle and do a search for Indian River Bridge Calendar - and check the top of every page along the way. Somehow I find it to be interesting - that 20% of my customers are missing the discounts.
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  31. #22
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    Quote Originally Posted by Bill View Post
    I've learned something new in the last two weeks about online shoppers and coupon codes. I created a couple of niche calendars for niche areas here at the beach and am using Zazzle for fulfillment. I promoted these calendars on two of my Facebook pages and provided the "current" Zazzle coupon code. Zazzle also has a coupon code every day AT THE TOP OF EVERY PAGE. I have sold 30 calendars to date and SIX OF THOSE CUSTOMERS PAID FULL PRICE! That's one out of five people who are missing a 20% discount.

    Example: Go to Zazzle and do a search for Indian River Bridge Calendar - and check the top of every page along the way. Somehow I find it to be interesting - that 20% of my customers are missing the discounts.
    I know this world all too well! I believe a majority of it has to do with customers ASSUMING the discount is already applied, or will be applied. Savvy shoppers and marketers (obviously) would just say "why don't you check to see if it's applied" but some people go fully on trust and others are just blind. Banner advertising has trained shoppers over the years to ignore parts of pages since the original inception was spammy and annoying. It's amazing what can be missed when right in front of you!

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