The ability to engage your customers and motivate them to make a purchase is tough.
Especially when you are working in an industry where your competitors have similar products (like fashion). That is when you can introduce coupon marketing for eCommerce.
Now, this might sound like an “old marketing practice” but a recent report by Statista shows that 92% of online consumers look for relevant coupon discounts before making their purchases.
Yes! 92% of the ALL online consumers.
But don’t fall into a trap of simply creating a coupon code and sending it to your customers. They might not even look at it. It should be more creative and personalized than that.
And in this guide, you’ll be learning just that.
- What is a coupon marketing?
- Coupon Marketing Strategy Benefits
- Types Of Coupon Marketing Strategy
- Steps For Developing Coupon Marketing Strategy
- Tips To Optimise Your Coupon Marketing
- Important Coupon Marketing Statistics
Feel free to jump to any part of the blog. But if you would like to enjoy the flow of learning let’s start from the top.
What is a coupon marketing?
Coupon Marketing is a pull-marketing strategy, where the customer’s interest in saving money is used to attract them towards buying products. Various methods such as promo codes, discounts, or digital coupon codes are shared with the customers.
The drive to save money brings them to the store and motivates them to make a purchase.
It is among the most efficient ways to create brand awareness, build relations and start a word of a mouth marketing campaign, which according to Invespcro, results in 5X more sales than paid media impressions.
But the benefits of coupon marketing for eCommerce are beyond sales. Here is a shortlist of benefits that you can refer to to understand – what to expect.
Benefits of Coupon Marketing
Coupon Marketing is one of the hottest trends in the world of eCommerce. Every brand on the internet (established or newbie) understands how a coupon marketing campaign can start a wildfire – if done right.
Here are a few benefits of coupon marketing for eCommerce other than sales that you must know.
Increasing Brand Awareness
You already know how important brand awareness is for eCommerce. The more people know about you, the more likely they are to trust and buy from you.
Coupon codes allow you to reach an untapped audience and motivate them to engage with you. The fact that they are saving money, creates a memorable bond with your brand and can result in loyalty among customers.
And you might even be surprised to learn that in a survey by Inmar, 94% of Gen X said – personalized coupons and promotions were the key reasons they joined the brand’s loyalty program. And for the Baby boomers, it is 86%.
The whole process of coupon marketing for eCommerce can be explained in just two steps.
- You give a coupon code to your customer
- They use it to make a purchase.
Now, let’s focus on the fun part.
Because you created the coupon code, you’ll know who has it. And when that same code is used, you will easily be able to track what order was placed.
This clear tracking gives great insight into customer behaviour. The more you learn about the customer preferences like the price bracket and their engagement with your products – the more personalized you can be with your customer experience and retargeting.
Up-Sell and Cross-Sell
Upselling and cross-selling are two of the most effective business practices. They increase the average cart value and overall customer lifetime values of your customer.
But to do that, you must have a little understanding of what your customer is looking for. If you are using coupon codes, you’ll know what your customers have purchased and based on that data, you can suggest even more products to them in the future.
As per Socialmediopolis, when customers use a coupon code, 37% of them buy more than they would normally do. Taking this into the account, you are more likely to make a profit based on the quantitative sale even if you run a simple and targeted coupon marketing campaign.
If you are already running an eCommerce, you’ll find that you pay a good amount towards keeping your products in stock.
Products that spend a lot of time in the storage units, increase your day-to-day inventory cost. To avoid this, you can use coupon marketing for eCommerce. Putting an expiry on the coupon code creates a FOMO in the customers.
Hence, they tend to make a faster purchase before their code expires. Result? You save on your inventory cost and your customers save on the purchase. Ultimate Win-Win!
Types Of Coupon Marketing
After discussing the benefits, it is clear why you must use coupon marketing for your eCommerce. And to understand even better, here are the 6 types of coupon marketing strategies that you can use.
Lead Generation is a type of coupon marketing strategy wherein exchange for information (like email) a discount is given to the customer.
It is a personalized, but one-time offer. For the new customers, it is a great deal as in the exchange for just a little contact information they get an offer for their first purchase.
And either way, even if they don’t purchase at that time – you can use their information to contact them and remind them of the deals you are offering.
Another type of coupon marketing for eCommerce is FOMO creation. The Fear Of Missing Out is a strong action emotion that pushes your customer to make a purchase. If you put a time on the validity of the coupon code, the customer is more likely to buy your products sooner than they might have done.
According to Trustpulse, 60% of people make purchases mostly within 24 hours because of FOMO. That means during the Holiday Season, using a coupon marketing strategy for eCommerce can give a major boost to your sales and visibility.
We all like gifts and today we share gift coupons. Not kidding! As per Valassis report, 69% of consumers love receiving coupons.
And especially parents. 76% of parents and 77% of millennial parents state that they love receiving coupons.
You can use the following understanding to create gift coupons for your customers to share with their friends or family.
To be honest, this is a type of coupon marketing strategy where you can be really creative.
You have an option to attract your customers, at the same time, make them refer your products to others.
Social Media and Influencer
With dropping organic reach, social media and influencers have become a major part of any eCommerce marketing campaign. And one of the most common methods used to grow conversions from this channel is coupon marketing for eCommerce.
If you are already running a coupon marketing campaign, you can work with influencers to grow its engagement. If you are working with influencers, you can create a personalized coupon for their audience.
Both these techniques are effective and help the eCommerce (as well as the influencer) to grow.
As the Kynship CEO Cody Wittick puts it-
“When a brand talks about itself, it reads like a car salesman. When a genuine user of the product is talking about a brand, that’s an endorsement from your friend.”
And if you combine influencer marketing with coupon marketing, it becomes an easy way to track your goals and optimize your spending.
This is a type of coupon marketing for eCommerce where rather than sharing the coupon codes or promoting sales – you allow your customers to choose from various offers running in your store.
The goal is to make the customers make a purchase again and again. It is a successful coupon marketing strategy for eCommerce as the customers trust you with the best price and are tend to promote you through word of mouth.
(Note that it can easily become your USP and in case you decide to stop running this strategy it can churn down your customers.)
Lastly, if your goal is to bring back your existing customers, you can use the following type of coupon marketing strategy.
Here, you can use different acquisition channels such as email, SMS, or social media to call back your customers.
And to be more precise, you MUST work towards personalizing your marketing campaign. The more personalized your coupon marketing campaign is, the higher your conversion rate goes.
Steps For Developing Coupon Marketing Strategy
Just like any marketing strategy, following some simple steps can help you enhance the whole process of creating a coupon marketing campaign.
Here are a few of the recommended steps for developing an ultimate coupon marketing strategy.
Set Your Goals
Before getting started with anything else, you must have a specific goal for your campaign. This will help you determine the KPIs and help analyze if your campaign was successful.
Mainly, coupon marketing has one out of these three goals.
- Increasing sales
- Bring in more traffic (Brand Awareness)
- Increasing returning customers (Retargeting)
An effective marketing strategy will help you with all these goals (all at once). But to create an effective marketing strategy, you must focus on just one main goal.
Re-Group Your Customers
Before moving forward, you’ll need to create a group of customers you want to target. Again, this will entirely depend on your coupon marketing goal.
Based on your analytics, your insights, and your industry – create a group of audiences that could have a high conversion rate (based on your goal).
Collect them in the spreadsheet and draw out a perfect coupon marketing strategy for eCommerce in the next step. You can even add important insights right next to them to enhance the whole campaign.
Finalise The Expiry
Your coupon code can’t be valid till the end of time. You need your customers to make a decision – Quick. For that, you must put a validity stamp on your coupon marketing campaign.
Give your customer a time frame in which they can easily decide – but at the same time don’t forget about your offer. For example, if it’s a New Year Sale – you can make the code valid till the clock hits 12.
Giving your customers this time frame will create a sense of urgency. Exactly what you need to sell your products.
Choose Your Acquisition Channels
You have your goals and you have a group of customers that you wish to acquire. Now all you need to do is create an acquisition channel or channels.
That is, how will the customers learn about the marketing campaign, what will be the offer and what steps will they take.
Your acquisition channel will determine the success of your whole campaign. And that is why it can be the most time-consuming step.
You can also look into your google analytics to see – which acquisition channel has the most conversion rate. Based on the following, you can plan out your whole coupon marketing campaign
Tips To Optimise Your Coupon Marketing
While you can create your coupon marketing for eCommerce in no time, it is recommended to optimize and refine it again and again. Here are a few tips that you can keep in mind while creating your coupon marketing strategy from scratch.
Pre-Plan Your Work
Creating a coupon marketing strategy is fun and great. But to see the results, you will need to optimize it. So rather than rushing into this, plan out the whole process.
For example, if you are planning to run a holiday campaign, you must start preparing for it at least two-three months before the season arrives.
Planning out the goals, segmenting the audience, and doing the market research – all take time. And all are very important in helping you run a successful marketing campaign. Having a plan and sticking to it will help you create an organized coupon marketing strategy for eCommerce.
Prepare your inventory
Running a coupon marketing campaign is risky. But you should prepare your inventory for an influx of orders in no time.
Also, you must find a way to engage customers in case you start running out of stock. According to Socialmediopolis, 48% of customers will buy sooner if they have a coupon.
That means in a short period, you are likely to see an influx of customers placing orders. And this is a golden opportunity for your eCommerce to build a healthy bond by showcasing your special customer experiences.
What are these “special customer experiences”? Optimize your coupons for mobile. Almost 53% of the customers want their coupons directly to via smartphones.
Promote Your Marketing Campaign
Yes – that’s right. To see actual groundbreaking results, you’ll need to make sure that your customer is aware of your offers. So don’t hold back.
Put in that little extra effort and believe me – you’ll see the results compounding themselves.
One Code Policy
This isn’t something to worry about. Moreover, it’s about making sure there is nothing to ever worry about. If your store has never run a coupon marketing campaign before, make sure you run it using only one code at a time.
Create your whole marketing campaign around that coupon code. It will reduce your burden of tracking code and help you focus on one specific goal.
It will also eliminate the possibility of having a loophole in the system that people can use unfairly.
You have a great coupon marketing strategy for eCommerce to generate a lot of sales – Great! But will it affect the customer buying decision? Giving them a discount is not enough. What matters is the value they get from that offer.
Your marketing strategy must put customers’ interests first, and give them a really good reason to be part of your campaign.
Did you know, in a study by NRF it was found that 47% of consumers admitted that free shipping is more important than saving on everyday products?
That means, for customers, a discount is “fine” in the case of an everyday product, but getting free shipping is GREAT.
Do thorough research and find what your customers are really interested in.
A/B Test Your Campaign
Here’s our final tip for your coupon marketing strategy. A/B test your campaign – before you run it for the masses.
For example, you decide to run a retargeting campaign through email by offering 20% off. Now before you run if it all your customers pick 2 to 3 small groups of audience and test it.
One group with a 20% off coupon, the second with a 15% off coupon, and the third with free shipping. This simple test will show a clear winner. That is if you find both 20% off and 15% off campaigns are doing the same – you can go ahead with 15% off.
If you find free shipping has outperformed other groups then make it your final campaign
Using A/B testing will help you remove any speculations and help you find the campaign that works for you and your customers.
Important Coupon Marketing Statistics
69% of consumers in Generation X who participated in the study admitted that they are actively using digital coupons to decide which products to buy. (Grocerydive)
94% of Gen X said – that personalized coupons and promotions were the key reasons they joined the brand’s loyalty program. And for the Baby boomers, it is 86%. (Grocerydive)
84% of consumers believe they will stay devoted to the brands that offer a loyalty program. (Nielseniq)
92% of online consumers looked for relevant coupon discounts before making their purchases. (Statista)
Almost 48% of customers buy sooner when they have a coupon. 37% of consumers buy more than they would normally do. (Socialmediopolis)
Customers with coupon codes spend 25% more money than others. (Socialmediopolis)
Around 76% of the shoppers agreed to share their email addresses in exchange for a special offer. (Socialmediopolis)
47% of online customers admitted that free shipping is more important than discounts on everyday products. (NRF)
53% of online shoppers want their coupons to be delivered digitally via mobile. (Socialmediopolis)
Having coupon marketing for eCommerce means an opportunity to engage with your customers at both ends. First before making the purchase and second, after the order is placed.
Something that can’t be seen in any other form of marketing. That is why, if you have never had an opportunity to create a coupon marketing strategy for eCommerce – the time is now.
Go through your analytics, talk to your customers and create your ultimate marketing campaign.