Why you should avoid discount code and cashback affiliates

Affiliate marketing is a fantastic opportunity to drive traffic and increase sales for your online store. However, as an advertiser, it’s important to understand that not all affiliates are equally valuable to your program. Discount code and cashback affiliates may seem like an attractive solution to quickly attract customers, but they can ultimately damage your brand and affiliate program in the long run. In this article, we will discuss why you should avoid discount code and cashback affiliates, as well as the issues that arise with sub-networks that exploit these methods.

Discount code and cashback affiliates: A short-term solution

Discount code and cashback affiliates offer customers incentives to purchase by providing discounts or cashback. While it may seem appealing to attract more customers through these methods, it can quickly lead to the devaluation of your brand. There are several reasons why discount code and cashback affiliates can be problematic for your business:

1. Lower profit margins:
   Discount code and cashback affiliates directly reduce the profit you make on each sale. Since these affiliates typically require a cut of the revenue and customers are usually only motivated by discounts, you risk driving traffic that doesn’t necessarily result in profitable sales.
2. Damage to Brand value:
   When customers become accustomed to purchasing with discounts or cashback, it undermines the perceived value of your products. Your products will be seen as a “discounted item,” and you may lose customers who no longer view your brand as a premium offering worth paying full price for.
3. Poor customer relationships:
   Customers motivated only by discounts and cashback don’t necessarily have any loyalty to your brand. They are likely to shop around for the best deals, regardless of whether they purchase from you or your competitors. This type of customer doesn’t generate long-term value for your business.

Sub-Networks: exploiting your program

Another issue that arises with discount code and cashback affiliates is the creation of sub-networks. Sub-networks are small affiliate groups that operate under a larger network and exploit discount and cashback programs to attract customers. These sub-networks can create unhealthy competition in your program and lead to problems such as:

• Dishonest traffic:
  Sub-networks may drive low-quality traffic to your store, where customers are only interested in discounts and are not likely to make purchases in the long term.
• Unnecessary erosion of profit margins:
  By exploiting discount codes and cashback, sub-networks can create excessive discounts on your products. This results in unnecessary costs and can harm your earnings over time.

How to avoid problems with discount code and cashback affiliates

1. Implement strict affiliate criteria:
   Ensure that the affiliates you work with have an audience genuinely interested in your products. Screen your affiliates to make sure they align with your values, and avoid those who rely only on discounts.
2. Use incentives instead of discounts:
   Rather than offering large discounts, consider offering exclusive benefits like early access to new products, free shipping, or loyalty programs. This provides more value to your customers without devaluing your brand.
3. Track affiliate performance:
   Make sure you can track the traffic and conversions generated by your affiliates. If you notice that an affiliate program is only driving discount-seeking users, it may be time to sever the partnership.

Advantages and disadvantages of discount dode and dashback Affiliate programs

Advantages:

• Quick traffic to your online store.
• Can attract price-sensitive customers who may not otherwise purchase your products.

Disadvantages:

• Reduces profit margins.
• Can damage customer loyalty and brand value.
• Causes excessive discounts and costs.
• Sub-networks may exploit and harm your program.

Conclusion

As an advertiser, you need to be cautious about the affiliates you work with. Discount code and cashback affiliates may seem like a quick fix, but they can lead to long-term problems for your brand and profits. Be selective, use healthy incentives, and maintain strong relationships with your affiliates to ensure that your program remains sustainable and profitable.