Every business aims to make money, and one effective way to persuade people to make purchases is by using coupons. Studies reveal that online shoppers who use coupon codes
spend 24% more than those who don't.
Why is that? Well, when customers use coupons, they feel like they're saving money, which encourages them to spend even more.
Now, coupons have been around for a long time, over 120 years. The coupon market in India is growing at
63% YOY and now stands at a whopping 13% of all e-commerce audience in India. So, if you know how to create a good coupon campaign, it can be a powerful tool for marketing.
But if you are new to the business, you should think about the below-given questions first before starting a coupon campaign-
• What exactly is a coupon marketing strategy?
• How do you go about setting up your coupon program and offering discounts?
• How to proficiently promote your coupons?
Through this blog post, we'll delve deeper into these questions and try to acquire better insights that can give you growth and advantage.
What is coupon marketing?
Coupon marketing is a way to entice customers to purchase your products using unique offers and various discounts. This approach presents a win-win situation for both parties is beneficial for both parties because with from coupon marketing, customers can save money while businesses get the chance to sell more products.
There are usually two main types of coupon codes:
- Generic codes: These are codes that anyone can use to get a discount. We see them typically circulated on social media, in advertisements, or in emails.
- Unique codes: These types of coupon codes are mostly made for a particular group of consumers, some specific marketing campaign, or a specific product. They're personalized and can't be used or shared over and over. For instance, instead of everyone receiving a "PURCHASE10" code, you might get a "PURCHASE1234" code, while someone else could receive "PURCHASE5678." Whatever the situation, each individual receives a unique code for themselves. This also allows you to track every conversion made from your coupon campaign, allowing you to optimize and push the channel giving you better conversions.
Should You Use Coupon Marketing?
As discussed above, coupon marketing is an effective way for small businesses to captivate more and more consumers, improve sales and build loyalty.
However, it's not a one-size-fits-all approach. Utilizing coupons quite often could end up making your brand look inexpensive and less appealing. You also need to evaluate who your consumers are, their stages in the purchasing procedure, and what activates them.
To figure out if a coupon is perfect for your small business marketing, take a look at these aspects when creating a campaign for you:
- Create clear goals on the number of products/services to sell during the campaign.
- Compare the achieved profits you will make per sale to the discount you will be providing.
- Monitor and compare the budgeted costs with the actual expenditures including channel expenditures.
- Utilize various tools to analyze customer demographics automatically.
- Use demographic data to pinpoint your target audience and create coupons tailored to their preferences.
- Analyze if your offer reverberates with your intended audience based on the campaign data.
- Evaluate the effectiveness of your selected marketing categories based on your campaign planning.
How to Develop a Coupon Marketing Program?
While creating a coupon campaign, you can’t ignore the biggest piece of it all- having an amazing website that your customers actually want to buy from. The shift to mobile has happened with retailers as well,
64% of retailers get traffic from mobile compared to only 29% from desktop. So, if you’re looking to create a successful coupon marketing strategy, you need a mobile optimized website first. If you’re looking to create an amazing mobile friendly- no code website in minutes,
try SmartBiz by Amazon right now!With SmartBiz by Amazon, you can also
create customized coupons for your business.Below is the curated list of the strategies that need to be considered for developing a coupon marketing program:
1. Customize your coupons:
Shopping as an experience is unique for everyone, and discounts should be too. It's essential to tailor your offers to each customer. Research by Epsilon signifies that
80% of consumers are more likely to purchase from a brand that focuses on customized experience.
To make your coupon marketing strategy more customized, you can design unique campaigns for certain groups, events, or promotions. For example, you can send discounts based on what customers have bought before or if they're part of a loyalty campaign. If you have their personal data, you can even offer them discounts for their birthdays or anniversaries.
Another way is to reach out to consumers who purchased with you a while ago. Send them a virtual coupon to entice them to return or remind them about products left in their cart. The aim is to show your consumers that you value them and offer something unique.
2. Set A Deadline for Savings
Limited-time offers are more expected to excite consumers to take action compared to discounts available anytime. This is because when you set a time limit for your offers, it generates a sense of urgency that encourages customers to act swiftly.
Short-lived campaigns, like a flash sale lasting just a few hours or a code expiring in a day, can be particularly effective at driving purchases. Combine this with interesting social media marketing campaigns to drive interest in the offer. If your offer lasts a few days, sending a reminder email on the expiration date can also help.
3. Add an Element of Fun:
Many customers enjoy playing games, and when you transform discounts into a fun challenge, you can increase commitment and boost sales. Different gamification tactics work well with digital coupons.
For instance, you can arrange a mystery reward campaign, where consumers need to hit a link to know their discount's value. You can also make the coupon available for the first 100 people who click it or who purchase the product, integrating a sense of urgency with a challenge. This can be integrated with product/ collection launch campaigns.
Loyalty programs can also comprise gaming elements. You can provide discounts when a consumer accumulates a specific number of points based on their engagements/ purchases with your brand. Alternatively, surprise discounts that feel like a lucky win can keep shoppers coming back to see if they can score more.
4. Use Referral Marketing
According to Nielsen,
92% of consumers trust recommendations from friends and family. You can employ this marketing tool by offering your consumers digital coupons that they can share with others.
For example, you can give discounts to both your customer and their friend for their purchases, like "15% off for you and 15% off for a friend." Don't forget to include a "forward this to a friend" link in your email marketing campaigns.
Another way to get referrals is through influencer marketing. You can reach out to YouTubers, bloggers, local celebrities, or even community members and offer them unique discounts to share with their followers.
While you might need to pay influencers for their referrals, this strategy can often pay for itself. HubSpot reports that
58% of marketers consider influencer marketing to be the most influential trend in marketing.
5. Analyze Your Campaigns
To ensure the success of your campaigns, it's imperative to track the performance of each coupon. This enables you to understand which types of coupons contribute to enhanced sales and recognize areas that may need a bit more attention. Analytics will help you understand if your campaign has been a success or not. You will need to factor in costs apart from the discount on the products provided to have a comprehensive idea of the cost to business that the coupon campaign has incurred.
Analysis of you campaign is also imperative to confirm if the target group of your business actually availed your offer.
To assess your coupon marketing strategy and improve your campaigns, consider the following steps-
- Check how many products were sold during the campaign.
- Calculate the exact profit earned vs the projected number.
- Analyze customer demographics to know who actually bought your products.
- Use the data on customers who actually bought your products to double down and create coupons tailored to their needs.
- Evaluate if the channels you chose to distribute your coupons actually worked and stop using the channels that didn’t work
How to market your coupons?
There’s many ways to market your coupons. However, we’ve come up with a list of channels and points in your customers’ journey where adding a coupon can influence purchase decisions. If you’re looking to learn on how to market your online store, click
here.Here's a list of places where you can insert or market coupons to attract and retain customers:
- Website Homepage:
Feature coupons prominently on the homepage to capture the attention of visitors as soon as they land on the site. This will require you to create an illustration/banner to grab the attention of your website visitors. - Pop-Up or Exit-Intent Overlays:
Use pop-up or exit-intent overlays to display special offers and coupons before visitors leave the site. This will make an exiting shopper rethink their decision to leave your website without making a purchase. - Product Pages:
Include coupon codes or promotions on product pages to encourage immediate purchases. This can be in the form of a pop-up once a visitor reads your product page/ description and is deliberating a purchase. - Shopping Cart Page:
Display a coupon code box on the shopping cart page to incentivize users to complete their purchase. This will need to be calibrated and modified based on the kind of products they have in their cart. - Email Marketing:
Send out newsletters or targeted emails with exclusive coupon codes to your subscribers. Do remember that you need to make this special/particular to incentivize them staying subscribed to your emails. - Abandoned Cart Emails:
Implement abandoned cart recovery emails with personalized coupon codes to entice customers to complete their purchase. This can help reactivate a shopper who has abandoned his cart. - Social Media Profiles:
Share coupon codes on social media platforms to engage with followers and encourage social sharing. Its also an effective strategy to improve following and the reach of your social media accounts. - Paid Advertising:
Include coupon codes in your paid advertising campaigns to attract potential customers and drive sales. This can help improve clicks on your ad. - Affiliate Marketing:
Provide affiliates with unique coupon codes to promote your products and earn commissions. However do remember that affiliates work on a commission basis, so you will need to factor that in when considering the discounts your provide to their audience. - Loyalty Programs:
Integrate coupons into loyalty programs to reward repeat customers and encourage brand loyalty. - Refer-a-Friend Programs:
Offer coupons as incentives for customers who refer friends to your e-commerce store, you can also modify this to provide a discount if your friend completes the purchase. - Printed Materials:
Include coupons in physical packaging or shipping materials to encourage repeat business. - Flash Sales or Limited-Time Promotions:
Create a sense of urgency by running flash sales with exclusive coupon codes for a limited time. You will need to promote your sale on various channels in order to create awareness. - Seasonal Promotions:
Align coupon promotions with holidays, seasons, or special events to capitalize on festive shopping. - Partnerships and Collaborations:
Partner with influencers, bloggers, or other brands to promote your products with associated coupon codes.
Remember, the effectiveness of coupon marketing can depend on your target audience, the nature of your products, and your overall marketing strategy. It's often beneficial to test and analyze different approaches to see what resonates best with your customers and then doubling down.
Pros and Cons of Coupon Marketing
Let's take a look at the pros and cons of coupon marketing:
Pros:
- Enhanced sales: Providing discounts or unique deals can motivate consumers to conclude their intended purchases.
- Attraction of new customers: Vouchers and coupons perform as efficient tools to draw in new consumers and entice them to try your products or services
- Rewarding existing customers: By providing particular discounts or deals to loyal consumers, you can increase the chances of consumer retention and loyalty
- Marketing campaign effectiveness: Vouchers and coupons are effective enablers to increase conversion rates for specific marketing campaigns
- Evaluating customer loyalty: By observing the redemption rate of vouchers and coupons, businesses can determine their customer’s commitment level.
Cons:
- Risk of brand devaluation: Frequent and extreme offers and discounts might reduce the anticipated value of your products or services in the eyes of your customers. Be sure to use coupons carefully.
- Attracting non-loyal/ price-sensitive customers: Vouchers and coupons can attract consumers who prioritize low prices and may not become long-term, loyal clients.
- Fraud potential: Some consumers may try to use fallacious coupons or vouchers, resulting in possible financial losses for the business.
Coupons offer an attractive way to increase sales and volume. Including them in your marketing campaign can significantly improve your consumer base and temporarily boost conversion rates. However, while quality products and equal pricing are unchangeable, coupons efficiently entice these segments, especially when faced with solid competition or changing customer expectations.
It's imperative to schedule and budget carefully, as becoming overly dependent on couponing can be a costly and unfeasible approach that many enterprises cannot sustain. Coupons, on their own, won't improve marketing campaigns, but integrating them with thoughtful coupon planning and excellent products can lead to a superior consumer experience.
FAQ's
1. What Legal and Ethical Considerations Should I Keep in Mind?
When implementing a coupon marketing strategy, it's crucial to be aware of legal and ethical considerations to ensure compliance and maintain a positive relationship with your customers. Here are key factors to keep in mind:
1. Expiration Dates and Terms:
- Clearly communicate expiration dates and any terms and conditions associated with your coupons. Transparency helps build trust and prevents customer dissatisfaction.
2. Truth in Advertising:
- Adhere to truth in advertising principles. Ensure that your coupon promotions accurately represent the benefits customers will receive, avoiding misleading statements or exaggerations.
3. Honoring Agreements:
- Honor the terms of your coupons without ambiguity. Failing to fulfill promised discounts or benefits can lead to customer distrust and potentially harm your brand reputation.
4. Compliance with Laws and Regulations:
- Stay informed about relevant laws and regulations governing coupon marketing in your region. This includes consumer protection laws, advertising standards, and data privacy regulations.
5. Anti-Fraud Measures:
- Implement measures to prevent coupon fraud, such as limiting the use of coupons to one per customer, tracking redemption, and using unique codes. This protects both your business and genuine customers.
6. Personalization and Data Privacy:
- If utilizing personalized coupons, ensure compliance with data privacy laws. Clearly communicate how customer data will be used, and obtain consent before collecting or utilizing any personal information.
7. Clear communication of terms:
- Clearly communicate the terms of the coupon, including any restrictions or limitations. Ambiguous or confusing terms can lead to customer frustration and potentially damage your brand image.
2. What Mistakes Should I Avoid in Coupon Marketing?
Coupon marketing can be a powerful tool for your e-commerce business, but it's essential to navigate this strategy carefully to maximize its effectiveness. Here are some common mistakes to avoid:
• Over-Discounting:
a. Offering overly generous discounts might attract customers, but it can erode your profit margins and potentially devalue your products. Find a balance that benefits both your customers and your bottom line.
• Lack of Personalization:
a. Generic, one-size-fits-all coupon strategies may not resonate with your diverse customer base. Consider personalizing offers based on customer behavior, preferences, or purchase history for a more targeted approach.
• Ignoring Analytics:
a. Neglecting to track and analyze the performance of your coupon campaigns can hinder your ability to optimize future efforts. Utilize analytics tools to measure the success of your promotions and adjust your strategy accordingly.
• Ignoring Existing Customers:
a. While attracting new customers is important, don't neglect your existing customer base. Implement loyalty programs and special offers to reward repeat business and encourage customer retention.
• Complicated Redemption Processes:
a. Make the redemption process straightforward. Complicated or cumbersome redemption processes can discourage customers from taking advantage of your coupons.
• Lack of Exclusivity:
a. If your coupons are constantly available, customers may delay purchases in anticipation of future discounts. Create a sense of urgency by using exclusive or limited-time offers to drive immediate action.
• Forgetting to Test and Iterate:
a. Every audience is unique, and what works for one may not work for another. Continuously test different coupon strategies, analyze results, and iterate to find the most effective approaches for your business.
• Neglecting Brand Image:
a. Be mindful of how your coupon strategy reflects on your brand. While discounts are enticing, ensure that your brand's perceived value and image remain intact.
• Avoiding these common mistakes will help you create a more effective and sustainable coupon marketing strategy that not only attracts customers but also enhances their overall experience with your brand. Regularly assess and refine your approach to stay in tune with your customers' needs and market trends.
