Everyone with any knowledge of affiliate marketing will know that providing merchant discount codes is key to many affiliates’ business strategy.

So is affiliate marketing all about discount codes? Well simply, no… partner with the right affiliates through the right networks, utilising functionality that suits your relationship with them then the sky is the limit. Affiliates can be capable of delivering huge quantities of traffic that generates valuable revenue all at rates of commission set to suit your marketing strategy and return on investment (ROI) goals. However in my experience many merchants find when their affiliate marketing is scrutinised the majority of it comes from discount codes. Often these merchants don’t understand affiliate marketing and haven’t invested sufficiently to allow this aspect of their online marketing to flourish or have simply left it to go stagnant. Like everything in business affiliate marketing must be invested in and then maintained if it is going to become a serious part of your strategy.

So are discount codes good or bad for online merchants? This really is impossible to give a general answer. Discount codes can be great for some and terrible for others. They can keep customers coming back to your site time after time and they can also kill off the perception of exclusivity that you have spent so long to building up.

So why should I be concerned about affiliates using discount codes? Well if all affiliates do is provide your customer with a discount on a purchase they were going to make anyway (because the affiliate has a well optimised affiliate discount code site and your sites checkout shows you accept discount codes) then you are potentially giving up valuable revenue unnecessarily!

The important thing to remember is your business needs a marketing strategy that considers all the the relevant factors. Is you aren’t familar with any of the concepts then you should seek advise from someone who is.

What is affiliate marketing? I am often asked this question when speaking to prospective clients and clients with little or no online marketing experience. The answer… ‘The use of affiliates, normally through an affiliate network, to provide a recipricant with online marketing services, for which the affiliate will receive payment usually in the form commission, which is based on the results.’  This isn’t necessarily an answer that is easy to understand for anyone with little online marketing knowledge, so let me explain what you need to know…

Some affiliates have a great deal of online marketing expertise and ability. They can utilise this ability to generate you revenue for your business and in return you pay them for their services. Now in order for this relationship to work effectively two things have to happen. The return they see from you has to leave sufficient margin for them against what they have spent generating your revenue for the amount of time they have spent doing it. If they aren’t satisfied then they won’t be working with you for long. But most importantly for you, the revenue they generate for you has to be sufficient to warrant letting someone else do such a fundamentally important role for your business and for you to give them this responsibility.

So why should you worry about letting affiliates deal with your online marketing? Well one issue is some (not all) affiliates aren’t exactly full time and they don’t always update the marketing they do on your behalf. This can often mean your online message or promotions become inconsistent. This becomes worse over-time. An example might be an affiliate who has left their marketing for you for years without updating it and they are still very prominent. This will lead to problems if your message or promotions has changed significantly or now isn’t appropriate. The next issue is if you let affiliates deal with aspects of your online marketing where competition can be a problem and you do your own marketing in this area. You can and will likely end up competing against your own affiliates. This will increase the cost of your own marketing and is likely to reduce your own rankings too.

So is affiliate marketing a bad thing? No, definitely not! Some affiliates are fantastic at what they do and can generate huge amounts of revenue for the merchants they work with. They will pro-actively keep up to date and will always work within the rules set by the merchant to limit any duplication. However most aren’t quite at this level. Even ones that aren’t fantastic can still be very valuable but in order for you to maximise the revenue you generate from them you will need to follow a few steps. Gain a good understanding of affiliate marketing and your affiliates, invest enough time and money to make ensure it works, set clear rules that are incorporated into your marketing strategy and keep control. If you leave them to it or hand them the ‘keys to the door’ it will go horribly wrong.