WHAT IS A COUPON?
“A voucher entitling the holder to a discount for a particular product” would be the clean and simple definition of a coupon. We basically all know them from marketing emails, customer support contacts, when booking vacations, buying things. Some companies are using them aggressively, other companies not so much. In all simplicity, a coupon is a code that you type or scan at the POS to receive a discount.
WHY IS IT IMPORTANT TO BE AWARE OF COUPON MARKETING?
A lot of studies show that coupons are extremely important to your e-commerce business. (See references for details.) For instance:
- Two thirds of consumers made purchases they were not originally planning to make – only because they found a coupon.
- 4 out of 5 shoppers found themselves encouraged to make a purchase – even with brands unknown to them – if they found a coupon.
- Almost 70% of millennials do not complete purchases without first searching for a coupon.
- More than 80% of consumers choose which stores to shop at based on discounts.
It is obvious that coupons are such an important part of e-commerce business that a focused strategy, implementation and tooling around it can determine the difference between success and failure.
DIFFERENT TYPES OF COUPONS FOR E-COMMERCE
Coupons come in many flavors. First of all, there’s a difference between private and public coupons.
Public coupons can be used by anyone, as many times as you would like. So, if a consumer gets coupons from their local paper, giving them $10 off on product X, with no limitations, they could use as many coupons to purchase any number of product X – all with $10 off.
Most companies, for this reason, put limitations on their coupons, but it is hard to check. Also consider the differences between online and physical purchases. It can be hard to control limitations like “can only be used once by each household,” or “each individual.”
Private Coupons are meant to be used only by a single user. But private coupons are hard to control because omni-channel e-commerce makes that a challenge.
For instance, while companies really want to ensure private, single-use-coupons, that can be a challenge if their IT systems are not using a central system to handle this, or if their configuration is more “batch/jobs” oriented. A customer using a private, single use coupon on their phone two minutes before they use it at a physical store can sometimes be difficult to control. The most important thing is to be aware of it, and to be able to track and report on it.
Within these two main categories, coupons are heavily tied to the actual discount or promotion. At a high-level that would be – as examples:
- Percent-Off or Dollar-Off Coupons
- BOGO Coupons
- Free-with-purchase Coupons
- New Customer Coupons
- Loyalty Coupons
And only your imagination sets the limits here – lots of other coupons/offers/discounts are possible.
HOW TO TRACK WHAT WORKS AND WHAT DOES NOT IN YOUR COUPON STRATEGY
As always, tracking and reporting are critical to the success of your online business strategy. Any marketer can launch as many “great ideas” as they like, but the only truth that counts is user data. So as you lay out your strategy, and execute it, make sure you have the right tools in place to track what’s going on, so you can learn and figure what is working for your business and your customers.
I’ll write more about this in another post.
IMPLEMENTATION CONSIDERATIONS AND WHERE TO GO FROM HERE
There are several key things to consider when implementing coupons for your e-commerce business. Below just a few:
- Make sure that applying coupons is easy and that you track if your users “leave the funnel” doing that. Studies show that coupons that are difficult to use are a big deal-breaker. As much as coupons drive customers, it is a real turn-off if they don’t work.
- Remember to preserve your brand’s integrity. Coupons are extremely important, but avoid overuse, and use the right tools, reporting and analytics to see where they support your long-term business strategy.
- Analyze your customer base and the use of coupons to identify the bargain hunters from your loyal customers – so you focus and target your coupon strategy where it creates the most value.
- Lastly, it’s important to have the right team and the right tools to support your coupons and promotions strategy.
In the rest of this blog series, we will go from high-level to hands-on tools, reporting and technologies to support the use of coupons.
Interested in stepping up your coupon game? We can help. Contact us.
Sources and further reading: