My life is loosely based around many fundamental beliefs. And one such belief is about capitalism and business: Most businesses are created to help someone because capitalism lines the business owner’s pockets.
Tis a surprisingly simple belief that is at least partially responsible for the successes I’ve enjoyed. If, for example, I believe that money and business are evil (as many of my lost Facebook friends from high school actually believe) then, well, I probably wouldn’t have ever started a business.
But there’s one business in particular that might have just shattered this simple fundamental belief.
(Okay, maybe shattered is a bit too harsh, but keep reading for the story and come up with your own conclusions…)
Because there’s a business that exists that not only barely helps anyone, but it also actively tries to fvck over its customers. They’ve been able to get away with it for years. And they would’ve gotten away with it too if it wasn’t for some pesky YouTubers.
Today, we’re talking about Honey, the browser extension that promises users to find them the best deal whenever they’re online shopping. It seems simple and noble enough.
But be wary of anything that’s free.
For years, people thought Honey was engaging in a practice that most find evil, but I don’t have much of a problem with it: Selling your data to third-party companies. I know, I know… we’re supposed to hate companies that sell your data. But as long as they’re selling said data to other companies (and not governmental bodies), I don’t see the problem with it. When sold to other companies for advertising purposes, it just means you get served up more accurate and relevant advertising—and companies can get more nitty-gritty with the details of their ads.
But it doesn’t look like Honey was doing this. What they were doing is far more nefarious…
Honey was acting more like the mafia than a company.
They’d scan the code of websites to “steal” different coupon codes that they’d show to their users while they were online shopping. Then, when that company would realize how many customers were using promo codes that Honey was promoting but they weren’t, they’d reach out to Honey to stop them from sharing discounts. When this happened, Honey would charge them 3% of revenue they generated to allow these companies to pick which promo codes ended up on Honey.
And so, on one hand, Honey was promising its customers access to the best deals. But on the other hand, they were charging companies behind the scenes and only showing their customers the smallest promo codes (unless, for some silly reason, a company allowed Honey to use higher, Black Friday-sized promo codes year round).
Sounds kinda like a mafia right?
But wait — there’s more:
A few years back, Honey decided to get more aggressive with its marketing. It reached out to several influencers on YouTube—and a bunch of YouTubers started shilling for this company.
On the surface, it sounds like a simple and noble idea: You can help your viewers save money regardless of where they’re shopping.
But again, behind the scenes, Honey acted like a mob.
The most popular YouTubers tend to promote the same kind of products: BetterHelp (which was exposed a few years back for selling data to third-party companies), Honey, and other types of businesses with the most “broad appeal” because once you hit a certain amount of popularity, you lose your niche (and niche-based YouTubers and affiliate promotions tend to make the most moolah for no other reason than the alignment of the brands).
And here’s where Honey’s action became even more nefarious:
Since they “work” (aka steal) coupon codes from all the biggest online stores, they have a massive catalog of businesses they have codes for. And many of these businesses established affiliate relationships with YouTubers.
If you’re somehow unaware of how affiliate relationships work: YouTubers would receive a commission for customers they sent to the business. But Honey also worked with these companies—and if you use their browser extension and click on a coupon code, they’ll reload the page and swap your affiliate code for their affiliate code.
In other words: They were stealing last-click attribution from almost any affiliate that was actually responsible for driving traffic to said business.
So, not only were they screwing over businesses by forcing them to pay 3% or lose more from Honey dropping higher percentage discounts, but they were also screwing over users because Honey didn’t result in getting the lowest prices. And they were also screwing over their main marketing engine (YouTubers and influencers) by stealing any commissions they would’ve gotten.
And believe it or not, it still gets worse…
After their free service was a success, the soul-sucking, money-hungry corporate types came up with another idea: Honey Gold.
Honey Gold was a paid version of Honey that offered better perks. And by that I mean they gave you some kind of cash back when you used their service. Except this percentage was pennies compared to the commission they stole from the pockets of actual affiliates.
It was a dirty business in all respects.
Moral of the story?
Well, there are several:
First, do your due diligence before working with anyone. This includes affiliates, partnerships, freelancers, agencies, even me.
Second, make sure you delete old promo codes or at least set them to expire. Especially some of your biggest codes.
Third, make sure your affiliate legalese has the appropriate legalese to ban this kind of affiliate that steals commissions. Also, I recommend keeping an eye on your best affiliates—they might just be up to shady tactics too. (This is hardly the first time a last-click attribution controversy happened.)
And fourth?
Email marketing is still the safest, most profitable, more personable, and yes, most human way to advertise.
This gives it obvious perks that most marketing channels don’t have.
If you want to see how powerful a better email marketing strategy can be for your business, hit reply, and let’s chat.
John
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