Strategies for using discount coupons in your online business

Discount coupons are a marketing strategy widely used in e-commerce to increase conversion rates and customer loyalty.

However, the question remains: how can retailers offer discounts and still meet revenue and profit targets? Let’s find out.

What are discount coupons?

A discount coupon is a special code made available by stores to give an extra discount to the consumer during an online purchase.

In addition to encouraging purchases, discount coupons are also an excellent way to increase the company’s mailing list, gain more followers on social media and encourage purchasing via mobile devices (m-commerce), through the virtual store app. 

Each time more, consumers expect to receive coupons along with promotional and product messages. 

Retailers that don’t offer this benefit risk losing out to a competitor. See the statistics below:

• 90% of consumers use coupons: It’s a positive and reassuring feeling (even if it’s not that profitable for the customer) to complete a transaction with some discount or incentive applied.

• The projection is that the global online coupon market will reach US$14.8 trillion by 2027.

• 63% of shoppers say they wish coupons were more available: Retailers who offer coupons regularly see recurring sales increase.

• 35% of people spend 5-10 minutes searching retailer emails for relevant coupons: Linking a coupon to product emails can significantly increase their effectiveness if the recipient, offer, timing and product mix are right.

Types of discount coupons

Although there are many types of discount coupons, which can be applied in many ways, we have listed some of the most popular ones used today.

Downloadable Coupons

These types of coupons are accessible to consumers from several different locations. 

Customers download coupons from a company’s website, directly from an email, or from social media. Most of the time, these coupons can be accessed on mobile devices as well.

Mobile Coupons

As ecommerce platforms that have integrated mobile applications into their operations offer coupons only for use via the app, with the aim of boosting sales on this channel.

Promotional Codes

The growing popularity of e-commerce has greatly contributed to the rise of promotional codes. This form of discount is faster than downloading a coupon and is easier for the customer to use at the point of sale.

These codes consist of a combination of numbers and letters unique to the brand and are often applied during the checkout process. They can be from single-use, personalized for an individual or a generic code that can be shared.

– How to improve the checkout process in e-commerce

Automatic Discounts

Discounts automatically applied at checkout are gaining popularity because the consumer does not need to take any extra action at checkout. 

This strategy helps decrease shopping cart abandonment rate and churn rate.

– How to avoid cart abandonment

6 Strategies for using discount coupons and boosting sales in e-commerce

When used smartly, discount coupons can generate a considerable amount of revenue with just a small allocation of marketing resources. A cost, but with a great return. 

Here are some ways to use this strategy and guarantee profits:

1. Get rid of slow-moving items

Some items just don’t sell as well as others. The best way to clear stock? Offer a discount on “out of stock” products. Sometimes a minimum percentage discount, like 15%, helps items fly off the shelves.

Don’t forget to take your gross profit into account. You may find that a 15% discount works just as well as the 25% you were willing to offer first.

According to recent research, most respondents indicated that a coupon should save them between 10-30% of their shopping cart in order to be worthwhile to search for one and use it. 

2. Build your email list

Contact data is very valuable, especially if it comes from potential customers. Many ecommerce stores offer a small discount if you sign up to their email list. 

A 10% discount is already a valuable incentive and can substantially increase your mailing, which certainly helps generate sales.

3. Encourage customers to spend more

Adding spending limits is a great way to increase average order values. For example, it’s not difficult to incorporate messages like “Only R$20 left to get 20% off your entire order!” This gives the consumer a reason to buy more.

Percentage-off coupon codes came on top as the most liked ones, but not by a large degree. Overall, it is clear that offering diverse savings opportunities is the way forward.

Using an automatically applied coupon or discount here is the best strategy to please the buyer.

4. Measure channel effectiveness

Discount coupons can also be used as a test of channel effectiveness for your marketing strategy.

If you put a 10% discount code on Facebook, Instagram and send it via email, you can see which channel performs best. This provides great insights into where you should focus your investment in marketing.

5. Boost your referral program

Most referral programs essentially work with discount coupons. 

The existing customer introduces a potential new customer to the store and offers them a coupon to use. After the referred buyer places an order, the original customer receives a discount coupon that can be applied to their next order.

6. Add a time restriction

“Checkout by 12pm on December 31st to get 20% off!”

The urgency factor – or FOMO (Fear Of Missing Out) – is a tremendous sales driver. 

Setting a deadline leads many customers to finalize the purchase. Make sure you make your window of opportunity realistic, but not so far away that it becomes less effective.

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