How Vouchers Affect Your Marketing Performance

Do you think you have an advanced marketing controlling in place? Do you consolidate raw data from your web analytics tool with your backend data? Have you integrated an attribution model beyond last click or linear and are you able to calculate a proper CPO/CPA, based on cost distribution to single touchpoints?

Even if you can answer yes to all of these points, you might still be short sighted regarding the evaluation of your campaign performance, since you probably don’t take voucher usage and cost into account there (or do you?).

The approach I would like to present in this post will provide you with a more realistic and holistic view of your online marketing efforts, one which has become best practice at the ventures of our portfolio.

So, what am I suggesting here more precisely? I would recommend that you take voucher usage into account for 3 concepts:

1. Customer Journey

2. Attribution Modelling of conversion credit

3. Marketing Cost and cost-related KPIs

Let’s take this example of a simple customer journey (3 sessions with one conversion worth 100€ during the third one) to demonstrate the changes:

What does that mean?

1. Your customer journey: Voucher redemption should be considered as an additional touchpoint (like a session or entry to your website).
2. These voucher touchpoints should receive conversion credit (revenue, orders or whatever you attribute), according to specific rules as well.
3. Voucher spend (discount amount) should be integrated in your total marketing spend and KPIs such as CPA , CPO and CRR .

You may still be asking yourself why this is relevant…

• I think you will agree that vouchers are part of your marketing activities and cost — and that they can influence conversion a lot.
• Thus, integrating voucher usage in your marketing controlling will considerably improve the big picture regarding campaign performance evaluation.
• As a result, you will be able to avoid considering the wrong campaigns as successful.
• This integration will give you a competitive advantage if you aim to be among the leaders in performance marketing.

Now how exactly can you implement this and what are the requirements?

How-to — Requirements

• Have access to your web analytics raw data (single touchpoints/sessions).
• Have it connected to backend order data (so that you can e.g. match cookies belonging to the same customer).
• Distribute marketing cost to single touchpoints (sessions).
• Last but absolutely not least: Have a voucher campaign structure in place, in order to have at least a set channel and partner for each of your promotions. This can be done in your backend or a data warehouse database.

Having implemented the first 3 points, KPIs for your customer journey might look like this per session:

These preconditions may sound pretty specific to you, but the first three points are currently becoming the industry standard — so you shouldn’t be afraid of making a little extra effort in order to have a holistic view of your marketing performance. No pain, no gain.

How-to — Rules to be applied

• If a voucher was redeemed, create an additional voucher touchpoint for each order with voucher usage.

• For the campaign structure of these voucher touchpoints, use the channel/partner/campaign info on voucher promotion you stored in your database.

• For attribution of conversion value: Assign voucher touchpoints the same weight as a regular touchpoint (or adjust the rules according to your use case, e.g. affiliate “last minute voucher usage” might get less credit).
• For cost related KPIs: integrate voucher cost (discount amount) from your order data as a new measure representing part of your total marketing cost. If acquisition vs. reactivation is relevant for you, distinguish between first and recurring orders with vouchers in order to calculate a CPA/CPO before and after vouchers.

Again: this probably looks like a lot of effort to you and you might think you’re doing well enough since you look at voucher cost per month or order — but let’s look at some results to demonstrate in which sense this is short sighted.

Results — before and after

Eventually, you will be able to analyze new measures such as first or recurring orders with vouchers, CPA/CPO before and after vouchers, broken down to marketing channels or more granular levels such as campaigns. Naturally, your total CPA/CPOs will increase, depending on your voucher spend, and for certain channels/campaigns much more than for others.

In our example, the result would be the following:

Note that your CPO and CRR would increase by 40% (from 25 to 35€)!

A real-life example for total cost increase:

Obviously, not all your marketing managers will be happy, but your reporting will be much closer to reality and a relevant part of it will no longer be hidden. (A higher CPA might of course also be justified when leading to a higher CLV in the long term, but this assumption needs to be proven).

As a next step, you should identify campaigns where the increase is particularly high and the CRR not good enough to allocate more of the budget to it. Look at this example, where the respective campaign was stopped when the results of the shift were shared:

To sum things up

Get a more realistic view of your marketing performance and avoid losing money ­– you don’t have to reinvent the wheel yourself. Don’t stop after the implementation is done — start analyzing and eventually shifting budgets.