Discount Codes vs Affiliate Token: Which one is better

Understanding Recurring Commission in Affiliate Marketing

Recurring commission affiliate programs represent the holy grail of affiliate marketing, offering ongoing payments for as long as referred customers remain active subscribers or buyers. Unlike one-time commission structures, these programs create sustainable income streams that reward affiliates for bringing in loyal, long-term customers.

The beauty of recurring affiliate models lies in their alignment of interests—affiliates are incentivized to refer quality customers who will stick around, while brands benefit from higher customer lifetime value and reduced acquisition costs. This creates a win-win scenario where successful affiliates become true partners in business growth.

Successful eCommerce brands like our Hemp ECommerce Partner, BakeBoxx, SaaS platforms, and membership sites have built empires on recurring affiliate programs. These models encourage affiliates to focus on education, trust-building, and genuine value proposition rather than quick conversions at any cost.

However, many brands unknowingly sabotage these powerful programs by introducing discount codes, creating a race-to-the-bottom mentality that destroys the very foundation of sustainable affiliate partnerships. At CodeCraft Studios (CCS), we've seen how this single decision can turn thriving affiliate programs into chaotic battlegrounds.

 

Why Can't I Have Custom Discount Codes With BakeBoxx

 

"It becomes a f*cking PVP server when you have affiliates fighting for Discount codes... What happens if one person refers you, but you use another person's affiliate code? Do you lose a customer you brought if they use someone else's code?" These were my thoughts when making the Affiliate Program for BakeBoxx. We had two options... either we said "f*ck it" and let affiliates fight it out with discount codes like every other program, or completely rethink how affiliate attribution work to properly reward affiliates. We care about our affiliates, and believe that if you bring a customer, you get to keep that customer forever, so every sale goes to you, even 5 years after, or a thousand. This also avoids your customer get "stolen" by using someone else's code. 

 

So the options were:

Option 1: Do what everyone else does - give out discount codes, watch affiliates compete on who can offer the biggest savings, and deal with the inevitable chaos of code stealing, customer confusion, and good affiliates leaving because they can't compete with coupon sites.

 

Option 2: Build something that actually makes sense - a system where the affiliate who brings the customer gets credit regardless of anything... A CODELESS affiliate program. No more fighting over codes, no more losing customers you worked hard to educate just because they found a random discount floating around the internet.

 

We chose Option 2, because we love you. But implementing it meant completely reimagining how affiliate tracking works.

 

Here's what we built instead:

First-Touch Attribution: The affiliate who brings the customer first gets the commission, period. Doesn't matter if they use someone else's link later - the person who did the actual work of education and trust-building gets paid.

 

Token-Based Rewards: Instead of competing on discounts, affiliates get to post a link, which stores their affiliate token on the client's device, until they create an account and get saved on the database. As shown:

 

The result? Our top affiliates aren't coupon sites - they're content creators, educators, and genuine advocates who understand that building trust pays more than slashing prices. And our customers actually stick around because they bought for value, not discounts.

But here's the kicker - most eCommerce platforms aren't built for this kind of sophisticated tracking. Which is exactly why we built our own attribution system that.

 

The False Appeal of Discount Codes

Discount codes seem like a logical addition to affiliate programs—they provide immediate conversion boosts, give affiliates something tangible to promote, and create urgency that drives quick sales. Many eCommerce brands introduce them believing they're empowering their affiliates with better conversion tools.

The initial results often look promising: conversion rates spike, affiliate signups increase, and revenue numbers climb. This short-term success masks the underlying damage being done to program sustainability and affiliate relationship quality.

What actually happens is that discount codes attract bargain hunters and deal-seekers rather than genuine customers interested in your product's value. These "customers" are primarily motivated by price, not product benefits, creating a foundation for poor retention and high churn rates.

More critically, discount codes fundamentally change the affiliate's role from trusted advisor to coupon distributor. Instead of building genuine relationships and educating prospects about value, affiliates begin competing on who can offer the deepest discounts, completely undermining the brand's positioning and perceived value.

Token-based codes also encourages creators to keep promoting the product on the long run, rahter than with with one-time comissions.

 

Turning Your Website Into a PVP Server

The gaming analogy is perfect—discount codes transform collaborative affiliate programs into player-versus-player (PVP) battlegrounds where affiliates fight each other instead of working together to grow the brand. What should be a cooperative ecosystem becomes a cutthroat competition for the lowest prices.

Affiliates start undercutting each other with progressively deeper discounts, creating a race to the bottom that benefits no one. High-quality affiliates who focus on content marketing and relationship building find themselves unable to compete with coupon sites offering 50% off deals.

This creates massive trust issues between affiliates and the brand. Quality affiliates feel betrayed when their careful audience cultivation is undermined by discount warriors, while the brand loses control over pricing and positioning in the marketplace.

The inevitable result is code-leeching, where non-affiliates steal and redistribute codes, cannibalization of full-price sales, and the exodus of serious affiliates who refuse to participate in the discount wars. What remains is a hollow program focused entirely on price competition rather than value creation.

 

The Churn Problem: Customers Won't Stick Around

Customers acquired through discount codes exhibit fundamentally different behavior patterns than those who purchase at full price. Research consistently shows that discount-driven customers have lower loyalty, higher churn rates, and reduced lifetime value across virtually every industry.

For recurring commission affiliates, this creates a devastating scenario where their hard-earned referrals disappear within months, killing the ongoing income stream that makes affiliate marketing sustainable. Instead of building long-term wealth, affiliates find themselves on a treadmill of constant customer replacement.

The psychology is simple—customers who buy primarily because of discounts are inherently price-sensitive and will leave as soon as they find a better deal elsewhere. They never develop genuine attachment to your brand or appreciation for your value proposition.

This discount dependency also trains customers to wait for sales, reducing full-price purchases and creating seasonal spikes followed by dramatic revenue drops. Brands become addicted to the discount cycle, further eroding their perceived value and making it increasingly difficult to maintain profitable pricing structures.

 

Better Ways to Incentivize Affiliates

Smart eCommerce brands incentivize affiliates through value-added benefits rather than price reductions. This includes exclusive content access, early product releases, higher commission tiers based on customer retention rates, and bonus payments for long-term customer referrals.

Education-based incentives work particularly well—providing affiliates with detailed product training, marketing materials, and customer success stories that help them promote value rather than price. When affiliates understand and believe in the product, they naturally attract better customers.

Tiered commission structures that reward quality over quantity create healthy competition. Affiliates earn higher percentages for customers who remain active longer, naturally aligning their efforts with customer lifetime value rather than quick conversions.

The key is brand-aligned partnerships where affiliates become genuine advocates rather than discount distributors. This requires careful affiliate selection, ongoing relationship management, and incentive structures that prioritize long-term success over short-term gains. At CCS, we help brands design these sustainable affiliate ecosystems.

 

How CodeCraft Studios (CCS) Builds Smarter Affiliate Models

Our approach at CodeCraft Studios focuses on creating affiliate programs that scale sustainably without compromising brand value or customer quality. We design token-based systems that reward affiliates for customer retention and lifetime value rather than just initial conversions.

Token-based affiliate systems work by giving affiliates an unique rather than a disocunt code during checkout.

One recent case study involved an eCommerce subscription brand struggling with high affiliate churn and poor customer retention. By eliminating discount codes and implementing a token system with retention bonuses, they increased customer lifetime value by 340% while maintaining a thriving affiliate community.

We've developed frameworks that help brands audit their current affiliate programs, identify discount-related problems, and transition to sustainable models without losing existing affiliates. Our commission logic ensures that quality affiliates are rewarded appropriately while discount-focused partners naturally filter out.

 

Conclusion

Discount codes in recurring affiliate programs create a destructive cycle that hurts everyone involved—brands lose pricing power and customer quality, affiliates lose sustainable income, and customers never experience true product value. The short-term conversion boosts simply aren't worth the long-term damage.

At CodeCraft Studios, we specialize in transforming chaotic affiliate programs into strategic partnership ecosystems that drive sustainable growth. Our frameworks eliminate the PVP dynamics that discount codes create while building programs that attract and retain top-tier affiliates.

Ready to audit your affiliate program and eliminate the discount code problem? Contact CCS to discuss how we can help you build an affiliate system that rewards quality, promotes retention, and creates genuine partnerships with your marketing allies.