The story of discount coupons in India is in its infancy and is all set to grow to huge proportions as the online and retail industry grows. It is at this stage, that one needs to look at and address certain areas in coupon promotion to create a standardized and level playing field to avoid needless controversy in the future.

Discount coupons in India are distributed directly by the merchant to customers and through affiliates and partners as well. By giving discount coupons to affiliates and partners the merchant accesses the user base of the affiliate and partner and converts some of the users as well. The partner and affiliate provides access to the merchant to a larger base for a reward or commission. Despite appearing like a win-win situation there are a few discrepancies in the process. These discrepancies are best solved right now before the market matures.

Single-use Coupons Better than Multi-use coupons
In India the current practice is that merchants offer two types of coupons – single-use and multi-use coupons. As their names suggest single-use coupons can be used only once while multi-use coupons can be used many times. Clearly the multi-use coupons reach many more people because it travels faster on the net and through social networking sites, forums, employees of big corporate etc. A single-use coupon has limited visibility because it cannot be shared.

Though it has limited visibility a single-use coupon is in the better interests of the industry as a multi-use coupon affects the merchant and partner/affiliate relationship adversely. A multi-use coupon that gets leaked across the internet brings no branding value to the merchant when it gets leaked across the partner channel. When it is shared on the net, it will be done without any T&Cs for the coupon. A potential customer who is unaware of the T&Cs may find the coupon not valid and goes away from the merchant site with bad experience. One bad experience could affect the merchant adversely as customers express their experiences on several sites which could have a cascading effect.

Secondly, the merchant is rewarding the affiliate / partner for nothing in the case of multi-use coupons. When the coupon gets leaked out, the affiliate / partner is not adding any value but he is still getting rewarded. The merchant can with some effort achieve that objective themselves.

Differentiating between Partners / Affiliates Through Coupons
Sometimes merchants use the coupons to differentiate between their partners and affiliates which is not in keeping with the spirit of the industry. Some affiliate / partners are given single-use coupons and some are given multi-use coupons. The partners who get single use coupons are at a disadvantage and have to promote the coupon many times more than a partner who got multi-use coupons to get the same results.
In other cases merchants give better coupons to performing partners and less value coupons to nonperforming partners which again discriminates the partners. Typically partners are limited by their reach – a bigger partner performs better because of his reach and a smaller partner’s performance could be lower because he has smaller reach. By giving less attractive coupons to smaller partners, merchants are not creating a level field again and instead ensuring that the smaller partners fail. Such practices could lead to unethical practices and non-standardized processes developing in the industry. The merchant could avoid this possibility by sharing similar coupons (need not be necessarily exact) with all the partners but choosing to share more commission / incentivize better for better performing partners.

Merchant’s responsibility to create level playing field
In the end it is the merchant’s responsibility to create a fair and level playing field so the industry develops on sound, transparent and ethical practices which are fair to all. Moreover as transparency and standardization is the key to building brands and customer loyalty it is in the best interests of all stakeholders to standardize coupons quickly and create a level playing field.

Views in this Article are expressed by R. Rama Raju – CEO of Marketing Promotions Company –