Webhosting providers are increasingly using a combination of affiliate and coupon marketing to attract customers. For instance, web hosting companies send their discount codes to their affiliates who then promote the offers on blogs, coupon sites and newsletters. The discounts provided may be very attractive, some reducing the prices of web hosting products by 50 percent.
One of the main reasons even the best of web hosting businesses use coupon is new customer acquisition. If this is the case, a major objection to coupon marketing arises. One wonders how web hosting companies know whether the people redeeming the discount vouchers are new customers or existing users. What percentage of discount vouchers are being used by new customers?
If the coupons are used primarily by existing customers, then obviously these web hosting companies give discounts to customers that would have anyway paid full prices on the products and services.
Coupon marketing means having a long term view
Is giving coupons to existing customers, really, a waste of potential earnings? In the short term, it may look like web hosting companies are losing a big chunk of their potential earnings by giving coupons to existing customers. However, the picture is different in the long term.
Bluehost and Domain.com are two of the best WordPress hosting companies in the USA and very popular among bloggers. Both companies have shown that making profit is possible, despite offering generous webhosting coupons. Firstly, these web hosting providers make money because theirmargins are high. Secondly,they still make money because the customers can be convinced to buy more products than the vouchers provide.