I got to work this morning to find an email from the cashback website Quidco informing us that as of September 1st 2008 they (one of my top 10 affiliates) have decided to leave the network we work with on an exclusive basis and who quite frankly cleaned up at this years A4U awards showing their pedigree because:
"The increasing mainstream use of cashback has brought greater pressure on the service we offer including the technical integration of Quidco with our network partners. As part of our effort to deeply integrate with network merchants and create bespoke solutions for their needs we have made the decision to reduce the number of our network partners. Unfortunately this means that we will be unable to promote you on the Affiliate Window platform as of September 1st 2008."
Now what I note about Quidco's email is that they arn't asking me to form a direct partnership with them (which i'm sure AW would have had something to say about anyway) or suggesting any way of moving forward with them other then to sign up with another network of whom can accomodate their technical requirements (I think thats a fair way of summing it up?).
This as a businessman causes me a slight issue, Quidco are indeed a top 10 affiliate of mine and during our peak months generated a sizeable chunk of our affiliate revenues and the loss of such an affiliate may well mean my revenue budgets for this year may not be achieved. So as a entrepeneur i'm left with no choice but to contemplate buying out our exclusivity with Affiliate Window and signing up with another network.... But should I do this for one affiliate, no matter how big they are?
I skip back to 10am this morning when I recieved this email from Quidco,I dropped Julie Wood an MSN asking what was going on before I commented publically. Two minutes later Julie was on the phone to me explaining the situation from both AW and Quidco's side, there was no forced opnions, simply the truth about how both parties percieved the relationship breakdown.
I skip forward an hour or two where I note Affiliate Windows public response to the issue: http://blog.affiliatewindow.com/?p=143
Affiliate Window as per usual have IMO delivered a transparent explanation, anybody that knows me will know i'll vouch for AW at every opportunity because they do a fantastic job for us, but personal opnions aside, its a pretty comprehensive and detailed response, which everybody should appreciate.
I've worked hard not to go into the key issues of the debate here as I feel its not really my place to argue either way, I can say that over the last few months we've had more and more validation enquiries and order numbers not tracked being raised by Quidco, which has raised internal concerns aside from this debate. I can also say that recent analysis showed that during the period we monitored Quidco delivered 29% new customers, accounting for 71% repeat purchasers, which makes me obviously wonder whether we'd have gained the majority of the revenues anyway.... (thats a question not an assumption and/or statement).
Theres deffinately a place in affiliate marketing for cashback sites, certainly cashback sites that go that extra mile to promote offers users might oftherwise be unaware of. In this case though I truely believe AW have acted in the best interests of me as a merchant, and the industry on the whole. Essentially Quidco have forced an analysis on me, life after a large cashback site... only time will tell but our exclusivity with Affiliate Window will remain intact, I'm comfortable knowing their working hard in our interests and not shying away from issues they should be taking a stand on.
*This post is a personal post by me Paul Smith and may not refelect IWOOT's business opnion. I.e if anyones offended, you'll need to take it up with me and not I Want One Of Those.
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12 comments:
really interesting situation, look forward to discussing it with you over a few beers on Friday :)
I suppose this is the danger of relying upon super-affiliates. It gets to a stage where they are large enough to start making demands that the merchant cannot afford to refuse.
What this does mean, however, is other cashback sites can have a go at claiming Quidco's share as I'm sure they are not yet at the same stage of leaving networks.
On another note, it means there's more scope for traditional affiliates to take a market share here too. It gives us a chance at winning competitions or driving more sales.
From my perspective, this move by Quidco is bad for merchants and networks but is great news for affiliates (especially other cashback sites).
Hi Paul.
Interesting times.
I believe your sales will recover quickly with other affiliates (hopefully including myself) filling the void.
I won't ever drive a large volume of sales BUT (as someone on the a4u forum suggested) more affiliates sending a lower volume of sales seems likely - which means less eggs in one basket from your POV.
It will be interesting to see how Quidco respond. It's hard to believe they simply won't promote merchants that are exclusively on AW and it's more likely they will actively steer their gadgt traffic to your competitors.
While this may damage you in the short term you said 71% of your Quidco traffic was repeat orders so it seems likely those people would shop with you anyway and after a quick look around for codes will click through via another cashback site or discountcodes.tv using my lovely exclusive code ;-)
(thanks Guys).
I'm sure Quidco will regret this move and it definitely makes it harder for the other cashback sites to maintain their 100% cashback models.
I've always wondered how cashback sites can deliver incremental customers given that people use them repeatedly (71% of the time).
I was going to talk about that cashback sites act to keep sales within the affiliate channel and that you may loose them to competitors who remain with Quidco. However, many of your competitors are on other networks so I hope you won't loose out to them!
If merchants and networks act collectively against such bullying then I'm sure it'll all work out well for your sector.
As an affiliate I wonder how many of my cookies are over-written by cash back sites after I've spent hours writing copy to inform the user of the buying options? That's the name of the game though!
I didn't even get a reply to my email asking for an Exclusive code. Well done Joe!
I'm sure between Paul and Julie they'll organise a code for you Ray.
Hi Paul,
We really appreciate your support on this one - in fact we've been bowled over by the support we've received from merchants.
Interesting times ahead indeed. I think this is good news for a lot of our content affiliates as well as the smaller cashback sites who will now have a USP in order to grow market share.
We're really interested to know whether we're going to see sales drop or whether the vast majority are just made up elsewhere. Fortunately we're not as reliant on Quidco as other networks given they've pretty much opted for alternative networks on any dual network programmes we run (why is a whole other story....!)
I think the message we've received from affiliates and merchants so far is that in a three way relationship, consultation, negotiation and arbitration is key and when one party challenges this it can throw everything into disarray.
But fear not, we have strong contingency plans and I'm confident we'll continue to provide unique opportunities for our merchants over the next few months.
Paul, here's an update that could be considered a view from another window perhaps.
Click here
Very interesting but i can't see it posing any problems.
Hi Guys, I just wanted to let you know that Rejuvenate Auto just launched our reseller/affiliate program.And we’d love you to sign up. We've been getting a lot of inquiries from people who sell carwash products on how to resell our waterless car wash. It’s easy, for more information, just click on the link: http://www.flpcorporate.com/aff/index.php
Hi friend,
Quidco is the web's cashback cooperative that collects referral commissions from online merchants and passes them all on to our members. Thanks God it's you Quidco that save my money.
Good blog for a newbies.
Thank you so much for the help
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