Who doesn’t like a deal? Who doesn’t like to pay less than what everyone else is paying for the exact same item?

Coupons have been in existence since the dawn of the Modern Age and for good reason – they work. 

This is no less true, and perhaps even more so, in the Ecommerce Age. Using coupons is an easy way to increase conversions and augment sales.

But how you employ them can be just as important as their actual use.  What follows is a compilation of best practices for offering coupons, so you can derive the greatest benefit. 

It discusses how to structure coupons, when to use them, how often and in what manner. Follow these suggestions and your coupon campaigns are sure to become an effective marketing tool.

1. Properly structure and segment your coupons

To optimize the usefulness of coupons, it's important to know how to structure them.

There are several elements which must be decided: the amount of the discount, the length of its validity, the amount of the cart to which it applies and the types of items or services to which it applies.

All of these can be defined with a personalization engine.

By segmenting your coupons and offering different types for different situations you enhance their effectiveness.

For example – for carts of greater value offer bigger discounts, increasing the chance of a sale.

You could offer 10% discounts to shoppers with cart contents over $100, but only 5% to all others.

If you have overstock of a certain item, you can offer coupons for only that product. You can even decide that a coupon only applies to a certain region.

2. Use them when shoppers display exit intent

If a shopper is heading out the door without making a purchase, make one last effort to seal the deal.

Display a pop-up with a coupon offer so that it will be presented to the visitor when she is about to abandon the site.

 

3. Incorporate them into your email marketing campaigns

Include coupons in all types of email campaigns – promotional, retargeting and newsletters.

With cart abandonment so pervasive you need an effective response. Luckily, given a little persuasion, shoppers who abandon their carts are ripe for conversion.

Retargeting abandoners with an email that includes a coupon is a proven way to get them to convert. When clicked on, these coupons take shoppers back to the site where they are automatically applied.

If you're worried about creating expectations of discounts among your customers, segment your coupons by cart value, only offering markdowns on larger sales.

You can also use A/B testing to experiment with different discount amounts on different cart values to find what works best for your store and visitors.

Another good idea is to include coupons in your email newsletters. When clicked on the visitors are directed to your site where a banner or pop-up appears restating the coupon offer. 

 

4. Use auto-applied coupons

To encourage former customers to return to their site, ecommerce marketers issue specialty coupon codes through email campaigns.

Although the coupons create a small short-term loss, the retailer expects to recoup that by motivating long-term loyalty from these customers.

Unfortunately, discount shopping sites often get wind of these private codes and post them publicly beginning a dangerous chain reaction.

The code is soon posted on many other sites and a tidal wave of unwanted discount seekers begin to visit your store. At this point, the goal becomes mitigating losses.

Merchants now have a difficult choice – deactivate the code and risk damaging your image with your loyal customers or leave the code up and suffer a large monetary loss.

This serious problem can be easily solved by doing away with coupon codes altogether and using instead auto-applied coupons. Clicking on one takes the customer directly to the site and automatically applies the coupon for them. Now no codes are needed.

Segmenting your coupons further insures they are used only by the targeted customers.

Another common problem is lost coupon codes. Many shoppers forget where they placed their coupons, rendering them useless and endangering the sale.

Here the auto-coupons can help as they automatically apply the coupon directly from the email, so shoppers don’t have to remember the coupon code.

A third reason to do away with coupon codes is jealousy. When shoppers who don’t have codes see the coupon box, they believe other customers are getting a better deal and feel cheated.

As a result, they may leave your site. For all these reasons, auto-applied coupons are your best answer. 

 

5. Reinforce email incentives on your website

When visitors enter your site through clicking on a coupon in an email, they should see a reinforcement banner or pop-up restating the coupon offer and informing shoppers that the discount will be applied automatically, saving them a hassle.

You can also greet them with a welcome back message.

6. Create urgency

The best time to get shoppers to use their coupons is when they first access them. Make sure they use them by creating urgency at the moment of access. 

This can be accomplished by including a countdown clock informing shoppers how much time they have until the offer expires.

Another way is to offer a limited number of coupons with a counter displaying how many are left. 

7. Use coupon offers to capture emails

Shopper emails are gold for ecommerce marketers allowing them to continuously engage shoppers and retarget them.

Present a pop-up offering first-time visitors your newsletter and a discount in return for giving their emails. 

Embed an auto-applied coupon in the reply email, so when the visitor revisits the site, the promised coupon is automatically applied.

8. Use them cautiously

Use your coupons sparingly. You don’t want your customers getting used to receiving discounts from you.

So set a long blocking time between emails that include coupons (say 30-60 days). This is especially true for sending coupons to those who abandoned in the past or who converted from a previous campaign.

Conclusion

Used correctly, coupons can be a great way to augment conversions. This means employing a variety of best practices.

  • Optimize their effectiveness by properly structuring and segmenting them.
  • Deploy them at optimal moments, such as when shoppers display exit intent or in your retargeting campaigns.
  • To ensure they get used, employ auto-applied coupons which also eliminate the need for problematic coupon code boxes.
  • Increase their chances of getting used by creating urgency with countdown clocks or limited amounts.
  • Use your coupons to capture emails and use them sparingly to avoid creating expectations of discounts.

If you follow these simple rules you are certain to maximize the effectiveness of your coupon program and derive the greatest benefit from your coupon campaigns.

Good luck!

Ido Ariel

Published 8 October, 2015 by Ido Ariel

Ido Ariel is Founder at Barilliance and a contributor to Econsultancy. 

6 more posts from this author

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Comments (2)

Landon Donovan

Landon Donovan, Digital Marketing Consultant at Picreel

Hey there Ido,

I have some experience using coupon campaigns on my ecommerce store. Btw, after reading this story I can see a couple of mistakes that I can improve in the future.

The thing is, you have to do a lot of testing before coming up with something that visitors just cannot resist. Perhaps the most important thing to consider is that coupons must be used sparingly. Don’t let your customers get used to them. If they do, they will always keep waiting for a coupon code and will not buy without a coupon. That’s what I realized :) Trust me, this is not a situation that you want to go through.

“Use coupon offers to capture emails”, this is the thing that has worked exceptionally well for me. Instead of offering them coupon code right away, allow visitors to sign up so as to receive immediate discount (once). This works awesome.

Exit intent technology helped me a lot with offering coupons at the last moment. I use it on my store now. I have been using Picreel for exit intent popups. You need to throw your secret card at abandoning visitors to bring them back.

Ido, how exit intent popups work for you while you were managing coupon campaigns? Any recommendations?

about 2 years ago

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Matt Lovell, Head of Customer Insight at Jack Wills

Nice article. The other ones I would add in is the use of personal, single use discount codes (as these get around a lot of the problems with discount sites) and the consideration of codes to draw customers back in post purchase (for holidays this works well on a customer's return from their trip but similarly retail stores could focus things after say 30 days post purchase while also checking on how the customer found their item / getting them to submit a review...

about 2 years ago

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