Articles in The 'incentives' Tag

March 9 2010

Why Are Online Affiliates Outselling Me?

by Katherine Bennett

It’s happened time and time again. A company produces a product and pays online affiliates to sell their product with the promise that they will receive a commission.
The online affiliates begin to sell the product and end up selling more than the actual company. Then the age old question occurs, why are my online affiliates selling more than me? This seems to be a problem for ecommerce companies who sell their goods online and use online affiliates to help. There are many reason why online affiliates outsell company’s on their products, but the main two that we will focus on are price and incentives.

One of the primary drivers of consumer purchases is price. Everyone should know that consumers have become “shop around” savvy. It’s no longer the “buy because I want it and forget price.” Instead it has become “let’s shop around on the internet for the best price,” and this isn’t hard for consumers to do with shopping engines and comparison shopping sites springing up on the internet daily. If a company is selling a product online and they want it to generate more revenue than online affiliates, they need to make sure that they have the best price possible. A perfect example would be my recent purchase of a cell phone. I bought my cell phone from a third party vendor instead of my cell phone service provider. The third party vendor had a better price; they included a car charger, a leather carrying case, and didn’t require that I extend my cell phone contract. If I had bought my phone from my service provider I would have spent at least $40 to $60 more, plus I would have had to pay an upgrade fee. The third party vendor offered better incentives than my actual cell phone service provider.

Incentives to buy a product are also important factors to help a company outsell their affiliates. Let’s say that your company and your affiliates are selling product “x” for $40. This puts you on the same playing field as your affiliates, but what happens when your online affiliates adds incentives. The affiliates offer free shipping on orders over $25 for example. Guess who’s actually gaining a new customer? Correct, the affiliate. Incentives such as free shipping, a free gift, and discounts can influence consumers to buy from an online affiliate instead of the manufacturer. What’s the purpose of selling a product on your site if a consumer can go to reputable online affiliates and buy it cheaper, with better incentives?

Many online companies need to sit down and be honest with themselves about their online affiliate strategy. Online affiliates are supposed to increase company revenue not take away from it. If all of your customers are going to online affiliates, then you have to pay out more commissions. The whole purpose of online affiliates is to help your company generate more revenue by reaching consumers that normally wouldn’t know or come to your site. There’s a delicate balance that must be kept between online affiliates and companies, otherwise the online affiliate becomes a paid competitor.  If you’re going to sell your product online and use an online affiliate marketing program, make sure that your website has the best price and the best incentives. Otherwise, you should let the online affiliates sell the product and focus your attention elsewhere.

June 3 2009

Online Incentives Are a Necessity

by Marni Weinberg

It should come as no surprise that our struggling economy is a focal point for everyone. Almost all of my clients have expressed in one way or another how challenging their online business has become from many standpoints, specifically in terms of ROI. In an effort to combat these difficult times, advertising budgets are being stretched thin and cutbacks are occurring.
At the same time, much to our delight, Search Engine Marketing (SEM) continues to be one of the most cost effective and quickest ways for online retailers to get their message across. In fact, many clients have told me they have had to decrease (in some cases cease completely) their television, radio and print efforts, due to the increasingly high cost to advertise on these platforms. 
That being said, every click counts to retailers, while consumers want to get as much as they can for their hard earned money. I personally feel that when an incentive is offered, the result is two-fold. It shows compassion for consumers who are battling through this tough economic climate. It also makes prospective shoppers feel they are getting a bigger and better value and will be more apt to take out their credit card. So what are the best incentives to get prospective shoppers and qualified leads to your website? Here are just a few tips…

  1. Offer free shipping whenever possible. If free shipping is not an option, perhaps offer a shipping upgrade at no additional cost.
  2. Provide a free gift with purchase. This can be something small and relatively inexpensive. This is also a great branding opportunity for you. Examples: shirts, pens, notepads, etc. with your company name printed.
  3. Offer a discount; even 5 or 10%, as every little bit helps.
  4. Extend a customer loyalty discount for repeat customers, or a coupon code that provides a discount on a future purchases.
  5. Be sure to have competitive pricing. Online shoppers are smart and they will search around now more than ever before for the best deal. If your pricing is favorable, you will more than likely get the sale. If possible, offer a low price guarantee.
  6. Provide free samples with orders; shoppers love samples!
  7. Extend a free trial of your service.
  8. Give a free whitepaper and/or newsletter when searchers register on your site. This is a great way to build your database and remarket in the future.

I recommend testing any of the above tips and then track your progress to see which incentives work best for you and your business. Good luck!

November 18 2008

Incentives is the Keyword this Holiday Season

by Katherine Bennett

This holiday season the keyword is incentives. Most consumers aren’t frivolously spending their money; they’re cutting back and searching for the best deals. If you want to be the retailer that they choose, you’d better consider incentives. This statement might sound forward, however the statistics don’t lie. Let’s look at some incentives that consumers are searching for before making a purchase.

Coupons are a big hit and they are becoming more popular. According to comScore, a global internet information provider, 62% of consumers are using coupons to help cut back on their shopping expenses. A survey by eMarketer, a market research company, shows that 59% of consumers will be using coupons to decrease their shopping expenses. Surprisingly enough, wealthy consumers, those that make $100,000 plus a year are turning to coupons. According to a survey by comScore, coupon site visits by the wealthy increased by 37% compared to this same period last year. Here’s a hint, if you have an ecommerce site, coupons are a definite plus and consumers will be looking for you.

Consumers are also motivated by free shipping. If I’ve heard it once I’ve heard it twice, “If a site doesn’t offer free shipping, I’ll find a site that does.” If you don’t believe me check the statistics. According to a survey by comScore, 72% of consumers said, “If an online retailer charged them for shipping they would search for an online retailer that offered free shipping.” Now more than ever before consumers are becoming more savvy. If a competitor is offering the same product with free shipping, I’d bet money that you’re going to lose the sale if you’re not offering the same.

Sales and deals are being sought out by consumers. Everyone loves a discount. According to a survey by e-Marketer, 40% of consumers will be looking for sales and 24% will be looking for deals in order to lower their shopping expenses. Why do you think Black Friday is such a busy shopping day, not to mention Cyber Monday which follows a few days later?

Incentives are the key this year. More and more consumers are comparison shopping and not just buying items on the first site they see. Comparison shopping sites are seeing an increase in traffic and more competitors are allocating their advertising budget towards online spending. If a retailer wants to be competitive this year, they need to have an incentive, even if it’s not coupons, free shipping or big sales, there needs to be an offer that tells the consumer they are getting the best deals on a particular site.

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