Debsena Chakraborty, Vice President, Growth - EMEA, MFilterItIn GCC, most online platforms rely on coupon websites to increase sales while they spend large sums of money across other digital channels such as social, programmatic, etc. to maintain brand recall. This practice creates a perfect scenario for channel cannibalisation.
Today users are not loyal to any certain brand or retailer. They only look for the goods they want and will but from any retailer giving them the best price. Sometimes even a Dirham pricing variability can sway users. This is especially true in quick commerce. Keep in mind that consumers are constantly searching for deals.
Given this situation, the question therefore is “Is coupon the answer?” The answer is somewhere between ‘yes’ and ‘no’. Yes, because if a user wants to make a purchase at a discount, they will look for coupon code. Coupon sites have great SEO and therefore not being present there can mean that you lose a confirmed sale.
No, because if you do not have a well setup attribution model, you will never know how the user moved through your funnel to make a purchase. Add to this, coupons mostly cannibalise other channels by giving instant benefits.
At this very moment, there is no way to say “No” to a channel as lucrative as coupons but there is a silver lining. That is solving the attribution matrix. Given how hard this riddle is to crack, most of my clients fall back to the last click attribution model. Let’s say that we cant do much today to change the fact that last click attribution is here to say, what then can solve the issue of cannibalisation?
The answer is to move towards a click to purchase based payout model. First, benchmark a session time required to complete a purchase. Now, if a click to purchase takes less that the benchmarked time, allocate lesser amount of commission payout.
This trick allows you to preempt customer’s coupon hunting behaviour and optimise your payouts. Content driven pathways take a lot of time to convert while coupons take very little time to convert. However, if the coupon is responsible for driving the user from the awareness or the consideration phase to an actual purchase then payout commissions in full.
The above solution is not ideal but can come in handy with the Ramadan sale approaching. In an ideal scenario, linear attribution or time decay attribution must be considered to unlock the full potential of your digital channels.
In my day job I come across many marketing professionals who take pride in the channel they manage but I hardly hear anyone say that they specialise in “Attribution”.
Attributing sales to a channel is hard. Given that channel’s have their own P&Ls, channel owners are encouraged to cannibalise from one another.
When that occurs, you either need some kind of attribution czar who makes sure the cannibalisation only occurs toward the free (or less expensive) channels, or you need extremely honest channel owners who will not do it (even on marginal decisions) and very hands-on overall owners who will stop them.
Till that time small tricks such as these can help you optimise your marketing budgets.
By Debsena Chakraborty, Vice President, Growth – EMEA, MFilterIt
