As a consultant, one of the services I provide for merchants is an objective review of their affiliate program. Recently, a merchant who has been struggling with their program, retained me to review their program. After I completed my research and evaluation we had a lengthy discussion of my findings. As you can expect, for a merchant who invested a lot of time, energy and money into their website and program finding out some simple but costly mistakes were made can be hard to digest. One of the hardest for many merchants to understand are leaks.
Leaks can be costly. No, not talking about a leaking pipe or roof, but leaks on a merchant website. A leak on a merchant website is any link or text that invites the visitor to leave the website. It is hard to understand why a merchant would invite their customers leave. In my opinion there is enough competition without creating more.
Each time I see a leak on a website I am reminded of the 1947 classis movie, “Miracle on 34 Street”. In that movie there is a great scene with Kris Kringle and a female shopper. Although working for one famous department store as Santa Claus, Kris tells the shopper to go to Gimbles (a rival department store) to make a purchase; Gimbles had better quality and better price on a toy. The shopper is so impressed that Kris and the store he worked for had her best interests at heart, she vowed to the store manager that she would not shop at Gimbles but instead she would remain a loyal customer. In this movie, after an outpouring of positive feedback, the department store runs with the new marketing ploy of referring their customers to other rival stores for best prices. The positive feedback increased their public image and they saw increased profits despite inviting customers to leave and shop elsewhere. (In my movie scene summary I have removed the name of the store Kris worked for because that store and its program have nothing to do with this post.)
While it may have been plausible back in 1947, that same marketing technique has little value in 2014. Referring customers to visit another store after you worked hard to get them to your website can cost you. Shopping at any store has become easy, we can easily shop almost anywhere and have a product within days. We have less of a sense of loyalty to a merchant because they are local, instead, we often shop value and price. Why send your customers to a competitor?
As a merchant, if you are giving your website visitors an invitation to shop elsewhere, you are risking losing them. Weigh the benefits of linking to a competitor and more importantly, know the costs. Let your competitors do their own advertising,