Results 1 to 8 of 8
  1. #1
    Newbie
    Join Date
    November 5th, 2015
    Posts
    4
    referral vs affiliate coupons - help starting a program
    Hey there, I'm planning to start an affiliate program soon, and I'd like to get an affiliate's POV before building my program incorrectly.

    Quick Background:
    I run a coffee subscription service with gross margins of 20%. We're in the process of building our referral program which will give existing customers a 25% off coupon to share, and will credit them with a 25% discount on their next shipment when the coupon is used. That coupon works only on the first order on new subscriptions, not on pre-paid gifts.

    The Plan:
    I've had good luck selling subscriptions through bloggers who have reviewed my product, but have been told by many of them to set up a referral and/or affiliate program (with ShareASale being the most commonly recommended). I'm leaning towards a program that offers a 16% commission and a 25% coupon for the affiliates to use. Settled on 16% because 25% free coffee=20% cash at 20% margins, and ShareASale takes 20% too. So it makes the programs somewhat equivalent. Currently my conversion rate is about 3.5%, tops out over 10% for traffic from coffee specific blogs though (with zero coupons, which I think will make it an easier sell). My ASP is $13.50, though I expect that to increase as we just released a new product at $20 yesterday, and will be increasing the price of another $20 product to $22 soon (selling well on Amazon at $24). Only three products on the site, so it's easy to keep track of everything.

    Key Questions:
    1. Is the above an attractive deal?
    2. What can I do to make the deal more attractive without destroying my business?
    3. Does my coupon strategy make sense? Would affiliates rather have an easier sale or a higher commission?
    4. I can't offer a 16% commission on gifts, that would leave me at a 4% gross margin. Is there a way to separate those sales out and offer a different commission structure on that? How do other companies deal with this?

    Thanks for reading!
    -Jeff

  2. #2
    OPM and Moderator Chuck Hamrick's Avatar
    Join Date
    April 5th, 2005
    Location
    Park City Utah
    Posts
    16,646
    We're in the process of building our referral program which will give existing customers a 25% off coupon to share, and will credit them with a 25% discount on their next shipment when the coupon is used. That coupon works only on the first order on new subscriptions, not on pre-paid gifts.
    Is that coupon code unique to the customer?

  3. #3
    Newbie
    Join Date
    November 5th, 2015
    Posts
    4
    Quote Originally Posted by Chuck Hamrick View Post
    Is that coupon code unique to the customer?
    Yup, that's the plan.

  4. #4
    OPM and Moderator Chuck Hamrick's Avatar
    Join Date
    April 5th, 2005
    Location
    Park City Utah
    Posts
    16,646
    16% sounds really good and coupled with the 25% off coupon sounds like a winning formula. Have you checked similar SAS programs to insure you are are competitive? I take it you are using the affiliate program to acquire new customers so are willing to lose money or break even on first sales?

  5. #5
    Newbie
    Join Date
    November 5th, 2015
    Posts
    4
    Quote Originally Posted by Chuck Hamrick View Post
    16% sounds really good and coupled with the 25% off coupon sounds like a winning formula. Have you checked similar SAS programs to insure you are are competitive? I take it you are using the affiliate program to acquire new customers so are willing to lose money or break even on first sales?
    Thanks for the feedback Chuck, that's encouraging! We're a subscription service and our retention stats are solid so I'm willing to give up the first two months of profit. Been browsing the SAS catalogs, is there a place where I can find more of the old ones? I noticed the Summer 2014 had more stats than just the % commission.

  6. #6
    OPM and Moderator Chuck Hamrick's Avatar
    Join Date
    April 5th, 2005
    Location
    Park City Utah
    Posts
    16,646
    Don't know offhand, try sending a tech ticket.

  7. #7
    Newbie
    Join Date
    November 5th, 2015
    Posts
    4
    Quote Originally Posted by Chuck Hamrick View Post
    Don't know offhand, try sending a tech ticket.
    Will do, thanks for the help. Really appreciate it!

  8. #8
    Newbie
    Join Date
    November 13th, 2015
    Location
    Earth
    Posts
    6
    Yeah a coupon code for the affiliates would be awesome. I would consider that over the referral.

  9. Newsletter Signup

+ Reply to Thread

Similar Threads

  1. Does Performics have a referral affiliate program for the network?
    By Azam Marketing in forum Google Affiliate Network - GAN
    Replies: 1
    Last Post: May 6th, 2008, 10:33 AM

Tags for this Thread

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •