5 Reasons Your Business Needs Coupons

5 Reasons Your Business Needs Coupons

By Holly Millar Icon comments Tags:

Why should you use coupons? Because they are a great strategy for increasing conversions, acquiring new customers and rewarding loyal customers.

More that 70% of US internet users said their purchases were influenced by coupons and discounts (eMarketer 2016).

You've probably considered creating a coupon campaign, but maybe you are worried about a loss of revenue, how to securely validate the codes, fraud or having right solution in place to support the campaign.

However, when executed correctly, coupons can be incredibly beneficial for your business, increase profits, increase customer engagement and reduce customer acquisition costs.

Here are 5 reasons you should implement coupons in your promotion marketing strategy.

1. You will drive traffic to your website

Credit cart and computer Idea: Run a coupon campaign valid for 10% off all orders on your site for purchases made in the next 72hrs.

96% of consumers would still use coupons even after winning the lottery a (Red Plum).

Why: Both new and and existing customers will have a compelling reason to visit your site to browse products and redeem their valuable coupon. Increase the sense of urgency to discover your site and buy products by adding a time-limit to the campaign.

How: Promote your coupon effectively to ensure higher campaign reach. Target a large segment of your audience with the code in an email, promote on social channels and consider a paid Facebook promotion to acquire new customers.

Remember: Ensure your website can handle the spike in traffic, that all coupons can be securely validated within a short time frame and the coupon itself has an expiry date.

2. You can increase product sales

Idea: Send new customers a 5€ coupon code when they sign up for your newsletter, to use for their first purchase. Set a minimum order value to increase the average spend and increase product sales.

57.4% of consumers claim they are more likely to buy a product from a retailer's site when the retailer emails them a discount code (Cue Connect).

Why: Reward customers for signing up to your newsletter and encourage a first purchase with a valuable offer. Once they have stepped into the sales funnel, they are more likely to make a second purchase and see the value in opening brand communications (e.g., newsletters, sale alerts, contest).

Tactics: Create a positive customer experience from day one and reward them for opting in for communications. Suggest other relevant products based on their cart items to help them reach the minimum order value.

Remember: Analyze customer data to see what products are most relevant to customers, the optimal time to send communications and what customer segments should actually receive offers (not every customer needs to be incentivized!).

3. Promote new products

Idea: Give your active customers access to your latest product or service before anyone else and a coupon code for 50% off, valid only for the new item. Ask for a product review or rating after a successful purchase.

47% will sometimes try a new product after receiving a coupon/discount offer while 23% said they "almost always" will (ScanBuy).

Why: People are more likely to purchase a new product if it feels like an exclusive offer and they will have it before anyone else. This will positively impact sales, product awareness and assuming product reviews are good, build positive brand awareness.

Tactics: Leverage customer data to achieve the highest level of personalization for these customers. Be sure your new product is ready, in-stock and has all the features you say it does. Target people who trust your brand already so they will be excited (not apprehensive) about trying something new.

Remember: Don't forget to ask customers for a product rating or reviews. Include a social sharing element to expand campaign reach.

4. You can reward loyal customers

Wrapped Gift Idea: For customers who make regular and high-value purchases like plane tickets, reward them with 50€ coupon to be used for a hotel or tourist attraction.

Existing customers are 50% more likely to try new products, and spend 31% more than new customers (Nielsen).

Why: Customers who are loyal to your brand should be rewarded for their good behaviour, and if you deliver an exceptional experience, they will return the favour by making purchases or recommending your brand to their friends.

Tactics: Send the coupon code via email once they have made a minimum number of purchases on your website. Leverage your customer data to reward them with a highly personalized offer that recognizes their unique behaviour and preferences, like a family friendly hotel or luxury spa.

Remember: It costs 5 times as much to acquire a new customer than retain an existing one Invesp, so it is worth it to invest in building this relationship.

5. You get customers to come back (and convert)

Idea: Send a “Welcome Back!” coupon code to inactive customers. Offer a very valuable reward like a free 3-month subscription to your service if they use the code in the next 24 hours.

Lowering your customer churn rate by five percent can increase your profitability by 25 to 125 percent (AnnexCloud).

Why: There are numerous reasons customers might stop interacting with your service, but that does not mean you should give up on them. A re-engagement email with a compelling incentive might be just the trick to get them interacting with your brand again.

Tactics: Give customers a chance to experience your service for free or at a heavy discount and show them what they have been missing. Highlight products they might enjoy, communicate the improvements made or features you have added since they have "been away".

Remember: Analyze customer data to determine what customers are worth targeting. You don’t want to give free subscriptions to customers who have only been inactive for a few days (but this definition is up to you).

What are you waiting for?

Coupons are a great way to drive traffic to your site, increase product purchases, drive product awareness, reward loyal customers and re-engage with customers.

Now that you know the benefits of sending coupons to your customers, always keep the following in mind to ensure the success of your campaign:

  • Define target audience and promotion channels
  • Create compelling creative and a clear call to action
  • Determine timeframe (start and end date)
  • Ensure codes can be validated efficiently
  • Prepare for increased traffic and product orders
  • Set campaign goals, measure and track results

Have you had successful experiences with coupons? Challenges? Let us know if the comments below. If you have further questions or want to discuss the right strategy for you get in touch!

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