According to Vouchercloud’s Value of Coupons in Digital Campaigns research, 91% of customers say they would shop with a company again after using a coupon, and 57% say they wouldn’t have completed the sale without a coupon. When you consider the options, it’s not rocket science: don’t make the sale (and make £0) or sell at 50% off, and, yes, your margin will be reduced, but it’s still better than £0!
Coupons create happiness
Effectively, when we use a coupon, we are buying the good feeling that a discount brings. It sounds silly, but that’s what the research says: Dr. Paul J. Zak, Professor of Neuroeconomics at Claremont Graduate University, found that people who received coupons were happier and more relaxed than those who made purchases without coupons. Knowing that we spend more when we’re happy, coupons can really be a boost to business.
Stop cart abandonment
Almost 70% of online shopping carts get ‘abandoned’. This means that customers spend time browsing the website, looking for products and adding them to their baskets, yet when it comes to checking out, they really do check out – they leave the website! Coupons can help to stop this because consumers know they’re not just abandoning their cart – they’re also abandoning their ‘free’ money!
Receiving a coupon in an email is twofold: first, we’re reminded that the website actually, y’know, exists. Second, it incentivises us to visit the site and see if we can really make use of the coupon.
This is more effective than a standard marketing email, which won’t necessarily have the effect you’re intending… We can’t be the only ones who feel pestered and enraged by daily marketing emails inviting us back to spend more money on a website, can we?
“Jeez, I already spent £100 with you last week! Give me a break!”
Yet, throw a coupon into the mix and the perspective changes: “Ooh. 20% off my next order. Result!”
In fact, research from Vouchercloud shows that 93% of people who receive vouchers in emails are ‘very likely’ to use them. Not bad!
Make sure the coupon is relevant
Don’t offer a coupon for money off an electric men’s razor if your customer previously bought a super-sensitive lady razor. Chances are they won’t really be able to make use of that one! Equally, don’t offer 50% off the next purchase of a product that generally lasts a few months, if not years – receiving a coupon for money off a hairdryer one week after buying one will not please your customer.
What’s the best kind of coupon?
Vouchercloud says that 31% of coupon users prefer coupons that offer a specific amount of money off a purchase, rather than a percentage. Apparently this is because shoppers find it too difficult to work out percentages, and very few will be swayed by a voucher which offers free shipping, as they think that should come as standard anyway.
More research shows that 43% of consumers consider a voucher of 25% or less to be a ‘good deal’ (despite apparently not being able to understand it!), with the best coupons being either a) Discounts on products customers would be buying anyway, or b) Discounts that are substantial enough to justify the time clipping them out of newspapers or filling in forms to download them.
Coupon abuse – a good thing?
Many eCommerce sites will offer loyal customers coupons with unique codes. This ensures the coupon can only be used once, so won’t be abused.
But could it be a good tactic to ‘allow’ coupon abuse? We think yes. Here’s why:
Imagine a new photo printing company has just started up business. They’ve got to compete with well-established industry big-hitters and try to persuade loyal customers to divert their money, which can be pretty daunting and difficult.
Here’s their plan: offer a discount coupon code for 50% off during the first month of business. The code could be, say, LAUNCH50OFF. They then chuck this out on social media, where it gets picked up, used, shared, used, and shared again, and before they know it, they’ve made hundreds of sales. Who cares that the coupon got passed around like a baby with a dirty nappy? This kind of coupon ‘abuse’ has a tremendous effect on business.
See, this new photo printing company has the email addresses and details of all the people who used the coupon code. Now, they can send them unique codes for follow-up purchases, which keeps them hooked and coming back for more. But the unique code means that these offers and discounts can’t be abused. Clever, eh?
When it comes to coupons, it pays to think about a long-term strategy. Be kind to loyal customers and incentivise them with one-off discounts and they’ll keep coming back. Entice new customers with easily-abused, ‘viral’ discount codes.
But remember: if the coupon is going to be specific to an item, do your homework and make sure it’s relevant. There’s not much worse than buying a £550 washing machine only to receive a ‘30% off washing machines’ coupon the next day. Ugh.