Figleaves Reducing commissions to voucher, cashback, loyalty and points affiliates

[getvisible]

Just had this email through:

Due to an unprecedented & unforeseen situation concerning the use of Figleaves discount voucher codes, and the rapid take up of these voucher codes by UK consumers, we have been forced to implement a short term change to our commission structures. The situation is thus; with up to 75% of affiliate generated customers using a Figleaves 20% off voucher code, in combination with the percentage revenue commission paid to affiliates, most customers generated by the affiliate programme are unprofitable for Figleaves. Clearly this is an unsustainable situation for Figleaves in the long run. Therefore, we are taking the short term approach of reducing commissions paid to voucher, cash back, loyalty and point?s scheme affiliates to a flat rate of 2%. The commission level paid to all other types of affiliate will be a flat rate of 8%. The stated changes will take place as of 11.00am (05.12.08) tomorrow morning and continue until further notice. We appreciate this will have a significant impact on affiliate activity and Figleaves competitiveness in the affiliate market, and understand that many of you will be forced to downgrade your activity for Figleaves. However, we are working hard to understand how to remedy this situation and are undertaking an in-depth analysis of customer profitability and long term sustainable commission levels. This will allow us to create new, more sophisticated commission levels that will drive long term profitability for the Figleaves business. Finally, we understand that for many of you this is an unwelcome and frustrating change to what has historically been a mutually successful relationship. Please accept our apologies for any difficulties this causes in the short term; however, rest assured we are working very hard to develop new commission structures that reflect the Figleaves business model and the increased use by consumers of voucher codes. In the long run this will be to the benefit of Figleaves and its affiliates. If you have any questions, please feel free to contact the team at TradeDoubler. Kind regards, The Figleaves Affiliate Team

This is basically what I've been saying all year! And I know many merchants agree with me on this.

The voucher code business model can only continue when it is in the interest of merchants to offer them.

If merchants are loosing money then they won't be around in this guise much longer!

I know of a number of merchants that are having their own marketing spend butchered by code affiliates.

Could we please have an unhindered and open debate on this please?

[ash]

Perhaps the unprecedented use of voucher codes might have something to do with the amount of spammy forum posts / blog comments some of us have been receiving....

Figleaves Voucher Spam?

As a code affiliate myself, i'm not really bothered by reduced commission (after all everyone needs to make a profit), although would'nt the better solution be to reduce commission on sales that utilise a voucher code? That way as a code affiliate i would'nt be penalised for also promoting the merchant on a 'content' site too.

[Barry]

I can only find two affiliate sites with the code on, one from a well know voucher site owner and one who is bidding on 'figleaves promotional code' on adwords. (and the other site is the first result in the serps for the same phrase).

Its a shame that responsible voucher site owners who are only promoting figleaves 'affiliate' vouchers are being penalised because of a few affiliates.

Why dont they just penalise the affiliates who are distributing codes that are not within the channel? Or offer no commission when a voucher outside the affiliate channel is used, I believe webgains have a system that they can do this with.

Ta

Baz

[loquax]

would'nt the better solution be to reduce commission on sales that utilise a voucher code

yes it would... that and not hiring a bunch of muppets to spam the internet so that you have more control over codes etc.

Sorry, but I kinda think this has been brought on by ineptitude as well as the increase in interest in codes.

I know of a number of merchants that are having their own marketing spend butchered by code affiliates

Then now is the time to act - because there's a new code site appearing ever week - Existem for example... plus I've also seen Dennis Publishing (Maxim and the like) have their own code site too.

The problem ain't going away.

And let's face it - if you're an affiliate and have say 1 hour to create "unique content that might SEO ok and then might get traffic and then might get commission because the consumer hasn't bogged off to find a discount (whether there's one or not" or "put up a bunch of codes" - I'd reckon the latter seems a good option.

Jason

[notabene]

Its a total smokescreen.

Reduce commission at Christmas...Abel & Cole, Figleaves etc etc

I predict this time next year VC world will look very very different...

[Cheapdvds]

well if i was figleaves the first thing I would stop doing is releasing 20% discount codes , just have 2, 5 or 10% codes and the jobs a goodun ,simple

[darrenb]

Originally Posted by Cheapdvds well if i was figleaves the first thing I would stop doing is releasing 20% discount codes , just have 2, 5 or 10% codes and the jobs a goodun ,simple

I was thinking the same thing along with a mixture of lower commission on sales that utilise a voucher code (for those who have both content and voucher code sites) and where codes are used outside the affiliate channel offer no commission.

[Mogga]

Originally Posted by notabene Its a total smokescreen. Reduce commission at Christmas......

If there wasn't a major financial disaster going on right now I'd be there jumping up being cynical.
OK, not strictly true. I'm incredibly cynical still - an affiliate program should be profitable all the time. If it can't be profitable at Christmas then ...
But vouchers are out of control. Network haven't dealt with roguevouchers quickly or effectively and so we're all going to suffer.

[bazza99]

Afraid to say that I've absolutely no sympathy for Figleaves here - they've done the sums wrong and should be paying the price.

The solution to this "issue" would have been for them not to offer discount codes in the first place, or else to work out how much discount they could afford before creating the offers.

Bad business practice.

[affiliateadvocate]

Oh dear.

I've been thinking about this quite a bit tonight, and I'm undecided on the following, either..

1) Figleaves or Tradedoubler (or both) are slightly ignorant and have ignored the fact that networks are able track the user of voucher codes and that the merchant can just reject sales

or

2) It's a clever ploy to reduce their costs and they have no intention of changing their commission back - it's purely that they don't value the customers coming from Cashback and Voucher code sites.

I'm still unsure which it is, but would imagine it's point 2, and if that is the case then it's a shame they couldn't have just been honest about it with their affiliates, it's the least we deserve after all.

If it's point 1 then tradedoubler should really be advising their merchants on how to manage programmes... it's possible to track vouchers and, believe it or not, reject or change the commission levels of the affiliates causing the problems rather than a blanket change like this.

Sometimes it surprises me that even with all the conferences, the training and the information available the merchants and networks they still manage to get it so wrong.

[KirstyM]

Figleaves is a very big merchant for me. I know for a fact that I'm one of their larger affiliates. Despite having taken on a marketing agency to manage the programme, there are no contact details of anyone from the agency or Figleaves being provided - that's pretty interesting. It tells me the agency aren't really working for their massive fee and instead choose to communicate with affiliates 3rd hand.

I for one am not that amused that their voucher code strategy has impacted on the affiliate stream. I think the new management at Figleaves have absolutely no understanding of the sector and this is reflected in their recent actions.

Fortunately, my margins are well able to sustain this kind of commission reduction. Who knows, perhaps I'll even see a reduction in PPC competition as those with smaller margins peel off / reduce activity!

I honestly don't believe this is a voucher code affiliate issue. This is the result of an ill thought out voucher code strategy during hard times. I'm not surprised they've cut commissions to be honest. I think a lot of merchants will be doing the same in the near future as they look to improve margins - I'm just not all that happy about the notice period and the way it's been implemented.

**edit - Oh, and affiliate advocate is dead on, these commission rates won't be going back up.

[loquax]

On the TD CMS the following is being promoted

"Figleaves Mega-Weekend - VAT Free sale this weekend only + Free Delivery on all orders over £75! For this weekend only Figleaves are launching the ultimate in Christmas promotions, customers will receive an automatic VAT free reduction on their orders (that’s a saving of 17.5%) AND free delivery on all orders over £75."

So 20% discount, plus VAT discount plus 8% affiliate commission - can't leave much profit?

Jason

[KirstyM]

Was just thinking similar myself Jason. I'm not sure why they're paying for premium TD sponsorship to promote an offer to affiliates that will surely lose them money through the channel.

I can't really fathom the thinking behind that one.

[loquax]

I can't really fathom the thinking behind that one.

Either they're struggling sales wise or they've been caught out through a screw up due to these 20% codes being distributed around. Perhaps a mixture of the two?

When I was emailed a 20% code I emailed back and asked for verification and this is the reply

"Each person at figleaves have each been assigned a code with the aim to distribute as widely as possible. I use your site a lot
and just wanted to submit it to other people on the site in the spirit of open source."

To me it's a balls up and half and Figleaves don't sell pants big enough to contain them!

Jason

[getvisible]

Originally Posted by loquax When I was emailed a 20% code I emailed back and asked for verification and this is the reply "Each person at figleaves have each been assigned a code with the aim to distribute as widely as possible. I use your site a lot and just wanted to submit it to other people on the site in the spirit of open source."

And I'd expect that each employee gets a "commission" per sale against their own code too, per chance?