Coupon Marketing: How coupons can increase your conversion rate
Verena Voss, Marketing Manager
Published on 02.10.2020
Coupons as marketing concept have been existing for over one hundred years. Officially, the very first documented coupon is a coupon from the Coca Cola Company, which was sent to customers and printed in magazines in 1888. The concept soon proved to be extremely successful and thus the foundation stone was laid for couponing as an effective marketing tool.
The statistics speak for themselves: according to a study by Hawk Incentives, 97% of all users look for special deals and discounts while shopping online. 92% of users even look for coupons when they are not actively shopping online. According to a study by Inmar 83% of the asked ones indicate that coupons change their shopping behavior, and according to a study by Kelton 48% of the consumers buy a product faster than planned, if there is a coupon for it. A total of 82% of the respondents even state that they buy more often from a certain brand if it offers coupons. Last year, a total of over 31 trillion coupons were redeemed worldwide and this number has grown steadily over the years.
So it becomes crystal clear: Coupons are becoming more and more important as an effective marketing instrument. Couponing creates attention, binds existing customers to your own company and helps you to acquire new customers. So coupons generally lead to more sales and a higher conversion rate, because they offer the prospective customer a special incentive to buy one or more products from your company instead of another.
You can even increase your shopping cart value by linking the coupon to a minimum order value (for example: get a 10% discount for a minimum order value of 30 Euros). Couponing can also reduce the shopping cart abandonment rate, which brings us to the link between coupons and conversion rate optimization.
So how can you use coupons as a marketing strategy for your company to increase your conversion rate?
For an optimal couponing strategy that ultimately leads to a higher conversion rate, a few things should be considered.
1. Personalization of a coupon
A study of business.com found out that the personalization of an offer and/or a coupon is more important than ever before. The consumers do not want to have the feeling to be only “one of the masses” – they want to feel special and they want offers, which feel personally relevant for them. Today’s savvy consumers do not want to receive offers for products or services in which they have no interest. But if we can personalize these offers based on past interactions, we can be very successful.
The numbers make it evident: 99% of respondents said they would “probably or very probably” use a discount coupon from a retailer they regularly shop with.
Even if they have not shopped with a company for a long time, an astonishing 97% said they would “probably or very probably” return to the store after receiving a high discount coupon.
Offering a customer an individual, personalized coupon is therefore extremely important to increase the likelihood of conversion. Examples of this could be:
- A special discount for first-time customers
- A special discount for regular customers
- A coupon for a customer who has added a product to his shopping cart, but then left it without making a purchase
- A coupon for a customer who has just bought a product
- A coupon for a customer who reaches a certain minimum order value
- A coupon for people with certain characteristics (e.g. living in Berlin – Here Facebook Ads with certain target groups are very helpful)
2. Limited time offer
A coupon is usually only attractive to a consumer if it is linked to a certain period of time. On the one hand, this protects the own budget (no company wants to offer discounts on the same products all the time) and creates much higher incentives to buy.
Since the offer ends promptly, the user is much more likely to make a spontaneous impulse purchase rather than leaving the site without a conversion or seeking other offers for the time being. Here the concept of FOMO (“Fear of missing out”) plays a major role.
Tying coupons to popular time periods is also a good way to do this because customers are more willing to spend money on products at certain times of the year anyway. Examples would be Christmas or Black Friday.
Closely related to point 1 (personalization of a coupon) is the tracking. An individual or personalized coupon code is also much more advantageous for tracking a coupon campaign. Every potential customer can be tracked by it, for example by an individual QR Code. So you can track exactly which customer has redeemed the coupon and which has not.
4. Lead forms
Once a customer has bought from you and is satisfied, there is a good chance that he will buy from you again – so it makes sense to build long-term customer loyalty. This works through lead forms.
Lead forms can record personal data of the user, such as his name and e-mail address. For example, if a user wants to receive a coupon, you could link this to a lead form and ask the user for his or her email address. In this way, you generate a lead and can send this user further offers in the future.
Gonnado creates flexible lead forms, adapted to your customers and your needs. Talk to an expert now.
5. Use different distribution channels
Sending coupons by email is effective; in fact, companies that send coupons by email have a 48% increase in sales. However, since email is not always opened immediately, you should consider using other channels to maximize your reach, generate more leads and increase sales.
According to the Rich Media Messaging news service, the opening rate for texts is even higher than for email, so it makes sense to promote coupons via text as well. In addition, 53% of the customers indicate that they prefer it if their coupons are delivered digitally through their mobile phones. The inclusion of a mobile option in your coupon marketing strategy is important because 72% of e-commerce will take place on cell phones and tablets by 2021.
In summary, couponing as a marketing strategy and as a customer retention tool can increase conversion rates if you consider a few things. The customer has to be presented with a good offer that results in real savings, and personalized coupons generally work better, also in terms of tracking.
So as a company, you have to follow a clear coupon strategy, i.e. you have to know exactly what is offered to which customer and in what time frame. Only then can coupons actually lead to an increase in conversion rates and sales.