Focus on Cashback Affiliates

1st October by Chloë Thomas

Why use Cashback Affiliates…

Cashback sites have been responsible for delivering large volumes of sales and increasing the number of consumers who are exposed to the merchant. Cashback Affiliates have a loyal following and attract a strong and vocal community, which means the popularity of your website can be dramatically increased. If you are looking to increase the traffic visiting your site, you may like to consider giving Cashback sites a promotional offer in order to generate more interest and sales for your brand. However, the use of Cashback Affiliates in your affiliate programme does have drawbacks and it is worth considering these before you take any action.

Potential drawbacks of using Cashback Affiliates…

Losing out on margins:Consumers are becoming increasingly confident in the validity of these sites, with newspapers and other opinion leaders advocating their use, so are actively checking these sites for deals. Cashback Affiliates try to lock in user’s loyalty to the site by having a threshold in place, which users must reach before they can withdraw their earnings. This is where problems for merchants can lie. Users of these websites tie in users and further purchases may come through the website rather than customers going directly to the merchant’s site, therefore costing them the commission. Can you be sure you are not wasting money on giving away margins in your discount when people would be buying anyway? This depends on your product and how loyal people are to your brand, as well as how price conscious they are. Financial services, for example, are popular with Cashback users as the brands do not have the same emotional connection with customers.

Higher chance of affiliate fraud:Fraudsters sign up to Cashback websites, place orders using fake details, in order to gain Cashback earnings on these fraudulent purchases. Placing a fraudulent order for £1000, with a ten percent Cashback gives a trickster a quick £100, and can show how quickly these orders can add up. In my previous post discussing the top 5 most useful affiliate metrics, I talk about using the percentage of fraudulent orders, which can help highlight any affiliate which users are placing fraudulent orders. Do not be afraid to highlight this problem (either directly or through your affiliate network) to the affiliates with the issues. In cases where I have seen high levels of fraudulent orders, the affiliate itself is keen to get the issue resolved and has listed the steps it has gone to, to help eradicate the problem.

Chance of losing good relationships with your other affiliates:If you have a presence on a Cashback or Voucher-Code website, then consumers may be likely to search for a promotional offer after they have made their purchase decision. Due to the ‘last click wins’ rule consumers may have used other affiliate sites (e.g. content sites with rating/reviews/information) to make a purchase decision, and then will check the Cashback sites just in case there is a discount or Cashback on offer. This will mean that the Cashback site will be credited with the commission although the purchase decision was made after using another affiliate site – which obviously will cause resent from these other affiliates. The ‘last click wins’ debate, however, is one that has and will go on for sometime though….

Summary:

Use of Cashback Affiliates will depend on a variety of factors such as your brand identity and value, strategic objectives and budgets. As with any affiliate scheme (especially if you are offering consumer codes/promotion) it is vital to carefully monitor and evaluate performance on an ongoing basis.