Using coupons and promo codes effectively can increase customer acquisition, build brand loyalty, and boost revenue. However, using them sparingly can help your profit margins.
Offering exclusive discount coupons motivates customers to return and recommend your business, bringing in like-minded lifetime value customers. Implementing reasonable limitations such as expiration dates and minimum purchase amounts promotes responsible use of the discounts.
Use them wisely
Coupons and promo codes are the most effective ways to drive new and repeat purchases, build brand loyalty, and increase sales and revenue. They are especially effective for e-commerce companies because they offer a level of personalization that competitors can’t easily replicate. Using digital coupons can also provide valuable metrics and analytical data that help optimize marketing campaigns.
To use digital coupons effectively, it is essential to establish clear and specific goals. These goals include increasing sales, attracting new customers, encouraging repeat purchases, or promoting a particular event or holiday. Setting these goals makes it easier to develop a plan that will help achieve them. Digital coupons can also create A/B testing scenarios, allowing marketers to compare two versions of a promotion or campaign to determine which performs better.
Another way to use digital coupons is by offering them as a reward for specific actions, such as signing up for a newsletter or making a first-time purchase. An example of an e-commerce company that used this tactic by creating a “Find Best Coupon” banner on its checkout page. This allowed shoppers to view available discounts and apply them automatically before they completed the transaction. It is also a good idea to restrict the usage of digital coupons to specific products if a business wants to limit the number of times customers can use a code.
Use them in conjunction with other offers.
Having a good coupon strategy can be very effective for an online store. It can help build a brand’s image, generate more leads, and increase conversion rates. However, it’s important to remember that coupons should be used with other offers. Using coupons exclusively can lead to a loss of sales and profitability.
For example, Temu could offer a coupon to new customers and a loyalty discount to existing members. This would encourage existing customers to continue to shop with the business, which can increase customer lifetime value. It can also motivate new customers to join the customer community by giving them a special deal to entice them to sign up for an email newsletter.
Savvy shoppers use discounts to their advantage, and businesses need to understand the impact of these deals. Coupons can significantly boost a customer’s purchase habits, increasing the average order value of each transaction. A recent expert study found that e-commerce companies with coupons experience 24% higher average order values than those without.
Coupon codes to promote other offers, like free shipping or product samples, can also increase the average transaction value. Businesses must understand customer demographics, psychographics, pain points, and behavior to create the most effective campaigns.
Check the expiry date.
Many coupons include an expiration date to encourage customers to take advantage of the deal before it is too late. Including an expiry date can also create a sense of exclusivity, which can help drive sales by making the coupon feel less accessible to non-customers. Expiration dates should be set strategically, however. If the expiry date is too soon, customers may be hesitant to use the code, or it might need more urgency for them to take action. On the other hand, if the expiry date is too far, the offer might retain its appeal to customers or create a sense of satisfaction with the brand.
Customers often abuse promo codes by exploiting loopholes in the redemption process or circumventing usage restrictions. This devalues the purpose of a promo code campaign designed to attract new customers, increase loyalty, or reward customer behavior.
You should clarify that unauthorized usage will be penalized to prevent coupon abuse. This can be done by establishing clear terms and conditions that state restrictions, limitations, and an expiration date. These should be shared through multiple channels to ensure that customers know the rules and expectations surrounding promo code use.
You can also limit the number of times a coupon can be used. To do this, navigate to the coupons page and click Usage Limits. Enter a valid value in the Coupon usage limit per coupon field to establish the maximum number of times the coupon can be used.
Use them regularly.
Discount coupons are an integral part of your e-commerce marketing toolbox. They provide a cost-effective way to incentivize customers, increase cart value, and attract new buyers. But they must be used sparingly to avoid chasing away potential customers with discounts that dilute brand image and devalue products.
The key is to make the coupons you use strategic and targeted so they don’t hurt your sales. For example, it’s best to offer coupon codes that incentivize upselling rather than discounting the product they purchased. Upselling boosts overall revenue and creates a more complete customer experience. A free shipping coupon or a buy one, get one promo are great examples of upselling incentives that can increase checkout totals by up to 30%.
Another common e-commerce coupon mistake is using them to promote discounted items that already sell at or above market value. A purposeless blanket discount can throw the product’s value into question and lead to churn rates that far outweigh the investment in promotional campaigns that use scarcity strategies.
Providing coupon codes by email can also be risky, as it requires users to navigate away from the website and could cause them to be distracted by other distractions on their devices. Instead, consider providing a Find Best Coupon banner during checkout or automatically applying discounts on the cart page to reduce user effort and keep them on your site.