Everybody loves discount coupons. Your eCommerce customers love ‘em more.
Coupon codes are incredible sales boosters for eCommerce businesses. When used correctly, you can effortlessly increase your store’s average order value and your revenue.
However, most e-commerce stores are not using it to the fullest and missing out on huge revenues.
We’ll discuss everything you need to know about coupon codes. You’ll learn how to plan and create coupon codes, the best practices to boost sales using coupon codes, and the dos and don’ts.
What are Coupon Codes?
Coupon codes (or discount coupons) are a unique string of characters created and shared by businesses with their customers. Customers can then redeem these coupon codes to get discounts on their order value while making a purchase.
They are also called promo codes, discount codes, or voucher codes. Coupon codes can provide various discounts, such as a percentage off the order value, a fixed amount discount, free shipping, or other special offers.
They are commonly used by eCommerce stores to incentivize customers to make a purchase and track the effectiveness of their marketing efforts.
Coupon codes are very popular among online shoppers looking to save money and get the best deals.
Importance of Coupon Codes for eCommerce Growth
Coupon code promotions are one reliable strategy for increasing your eCommerce store sales. A study says about 37% of consumers regularly or always look for coupons before making an online purchase.
Here are a few ways coupon codes can help your business.
1. Attracts New Customers
New customer acquisition is one of the most costliest affairs in eCommerce marketing. If you cannot reduce your customer acquisition cost, you’re looking at lower and lower marketing ROI.
In such scenarios, promoting coupon codes is a reliable strategy to attract new customers. It encourages first-time shoppers to complete their purchases by giving them more value for the money spent.
2. Increases Repeat Purchases
The sooner a first-time customer purchases from you again, the more likely you can retain them for a longer period. It is much easier to boost repeat purchases with tailored marketing strategies using coupon codes.
For example, offering your customers a 5% discount coupon when they complete a purchase. It encourages your customers to come back again and purchase more. You may also structure your offer based on your customers’ interest or offer limited-time coupons to improve your conversion rate.
3. Increases Average Order Value (AOV)
Increasing the average order value (AOV) is a straightforward way to increase your marketing ROI and revenue. Coupon code promotions are among the most successful ways to systematically increase the average order value of your store.
eCommerce stores often use coupon codes to motivate customers to spend more by offering discounts on larger orders. For example, your customers are more likely to spend $100 or more when you offer a 10% discount on orders over $100.
4. Easily Track Your Marketing Efforts
Since the coupon codes are unique, either on the campaign level or customer level, they are easier to track. This possibility helps you get sales insights per campaign and in some cases, customer behavioral insights.
You may use these insights to assess the performance of your marketing campaigns or further optimize your marketing campaigns.
For example, by assigning unique codes to different marketing channels, such as social media or email campaigns, you can see which channels generate the most sales and adjust your marketing strategy accordingly.
Different Types of Coupon Code Promotions and Their Benefits
There are several kinds of coupon code promotions that you can use based on your marketing and promotional requirements.
We’ll discuss the different types of coupon codes and their advantages.
1. Percentage-Based Discounts
It is one of the most popular promotion methods used by eCommerce stores. A percentage-based discount offers a specific percentage off of the total purchase price.
For example, a 20% discount on a $100 purchase will save $20 for a customer. You also have the flexibility to add a minimum order value limit and/or maximum discount value to these coupons.
The ability to add such limits gives you more control over your campaigns and ensures you’re not cutting into your profit margin.
2. Free Shipping Discounts
Shipping costs are often a conversion barrier for most eCommerce customers. Free shipping coupon codes offer customers free shipping on their purchases.
Even though it is not discounting the product price, it is still a lucrative offer. It will encourage your customers to complete a purchase without a second thought about paying for the shipping charges.
3. Buy-One-Get-One-Free Coupons
Buy-one-get-one-free (BOGO) coupon codes allow customers to receive a free product when they purchase a specific item. BOGO deals are popular because they give customers an extra product free of cost.
It is one of the least used coupon code promotion strategies. However, it is also the most successful coupon code promotion type with higher conversion rates.
4. Clearance Discount Coupons
Following the BOGO Discount coupons, clearance discount offers are also a profitable promotional strategy using coupon codes. These coupon promotions offer customers discounts on clearance items.
On top of sales, it is an excellent way for businesses to move excess inventory and for customers to get products at a lower price.
5. Loyalty Discount Coupons
Loyalty discounts reward customers for their loyalty to a particular brand or store. These discounts are not promoted as often as the other popular ones. However, it is a terrific strategy to reduce your churn rate and improve your customer lifetime value significantly.
These discounts are often offered to customers who have signed up for a loyalty program or made several purchases.
6. Referral discounts
Referral discounts reward customers for referring new customers to a business. These discounts are usually promoted and managed exclusively under a referral program.
Discounts or discount coupons are offered to customers who share a referral link with their friends and family.
7. Abandoned cart coupons
Abandoned cart coupons are sent to customers who have added items to their online shopping cart but haven’t completed the purchase. These coupon codes encourage customers to return to the store and complete their purchase by offering discounts or other special deals.
These promotions also tend to have a higher conversion rate since it discounts on products the customers already want.
8. First-Time Purchase Discounts
First-time purchases are one of the hardest sales to convert. Giving discount coupon codes to customers making their first purchase acts as a catalyst for overcoming this barrier.
Regardless of the discounted value, the timely promotion of the first-time discount coupon codes is key to a successful first-time purchase discount promotion.
9. Exit-Intent Discounts Coupons
Exit-intent discounts are displayed to customers about to leave a website without completing a purchase. The customer’s mouse movements trigger these coupon codes. They are designed to capture their attention and encourage them to complete their purchase.
10. Holiday and Seasonal Discount Coupons
Promoting seasonal and holiday discounts to your customers are full-on sale promotions. It may also include any one or several of the coupon discount types discussed above.
For example, you may offer a percentage-based discount or a flat discount on certain products. Parallely, you may promote a first-purchase discount coupon code to your first-time website visitors or newly signed-up users during the holiday season.
They are typically time-limited and are often promoted heavily during the holiday season.
The holiday and seasonal sales promotions usually happen during Christmas, Halloween, and BFCM. It may also happen during other times depending on your niche, the target market, and the audience.
Using different coupon code types or discount promotions to suit your business needs will result in a better conversion rate in your eCommerce store. Regardless of the type, the benefits are clear: customers get great deals, and businesses increase their sales and customer loyalty.
6 Best Practices for High Conversion Coupon Codes
Coupon codes are effective in attracting customers and driving sales. However, not all codes are created to be equal.
Follow these best practices to make the most of your coupon code promotions.
1. Make It Easy to Use
Your coupon codes should be easy to find, apply, and redeem. Display them prominently in any marketing channel you are promoting. It may be the exit-intent popup on your website, email newsletters, social media posts, inside the cart, etc.
Make sure the instructions for using the code are clear and straightforward. Here’s an example.
Here are the Steps to Redeem Your Coupon Codes:
1. Copy your coupon code
Copy the coupon code you received from the respective platform.
2. Add items to your cart
Browse the store and add the items you want to purchase to your cart.
3. Proceed to checkout
Once you’ve added all your items, click the shopping cart icon to review your order. Then, click on the “checkout” button to proceed to the checkout page.
4. Find the promo code box
On the checkout page, you’ll see a summary of your order, including the total price. Look for a field labeled “promo code,” “discount code,” or “voucher code.”
5. Enter the coupon code
Type or paste your coupon code in the field. Make sure the code is entered correctly and doesn’t contain any typos.
6. Apply the coupon code
After entering the coupon code, click the “apply” or “submit” button to apply the discount to your order.
7. Check the total price
Once the coupon code has been applied, check the total price to ensure the discount has been deducted. If the coupon code doesn’t work or the discount isn’t applied correctly, try a different code or contact customer service for assistance.
Tip: Always remember to read the terms and conditions of each coupon code and check the expiration date before using it.
Adding such instructions along with your coupon code to your distribution channel will help your customers complete the purchase without any issues.
2. Create a FOMO
When there is a discount, people do not want to miss it. Use this to create a fear of missing out (FOMO) in your customers.
Use expiration dates and limited availability for your coupon codes. This sense of urgency will encourage customers to act quickly and purchase before the coupon code expires or runs out.
3. Offer a High-Value Discount
When you offer a discount of significant value, your customers are more likely to use coupon codes and complete a purchase. Consider offering a percentage or fixed amount off the total purchase price, free shipping, or a buy-one-get-one-free deal.
One of the best ways to execute this is to create a stackable coupon code that is mutually beneficial.
4. Target Your Audience
Create coupon codes that are specific to your target audience. For example, offer discounts on products or services that are popular among your target demographic.
You may also refine your targeting by segmenting your customers. For example, offering loyalty discounts to customers who have purchased “n number” of times in a year.
5. Use Social Proof
Use customer reviews, testimonials, and social media posts to show how others have benefited from using your coupon codes. This will help build trust and encourage more people to use your codes.
6 Coupon Code Promotional Strategies for Success
Creating a discount plan and generating your coupon codes are only half the job done. Success lies in promoting your discount coupons to customers in the right way at the right time with the right message.
It is essential to increase your customer satisfaction and loyalty in the long term. Here are some strategies for effectively promoting your coupon codes.
1. Promote It in Email Newsletters
Send regular newsletters to your subscriber list, highlighting your current coupon code promotions. Make sure to include a call-to-action and a clear expiration date.
2. Social Media Promotions
Use your social media channels to promote your coupon codes. Share posts with your followers, run paid advertising campaigns, and consider collaborating with influencers to reach new audiences.
3. Promote It Using Website Popups
Use a popup to promote your coupon codes. This can be triggered by the customer’s behavior, such as when they are about to leave the site or add a product to their cart.
4. Promote It with Referral Programs
Encourage customers to refer their friends and family to your business by offering them a coupon code as a reward. This will help promote your coupon codes and increase customer acquisition.
5. Synergize with with Other Businesses
Consider partnering with complementary businesses to offer joint promotions and coupon codes. This can help expand your reach to new audiences and increase brand awareness.
6. Initat Loyalty Programs:
Use loyalty programs to reward customers who make repeat purchases with exclusive coupon codes. This will incentivize them to continue shopping with your business and promote your coupon codes to their friends and family.
Mistakes to Avoid when Promoting Coupon Codes
By avoiding these common mistakes, you can ensure that your coupon code promotions are successful and help drive sales for your business:
1. Complicating Your Offer
Avoid making your coupon code promotions too complicated to understand. Ensure that the code’s instructions are clear and easy to follow. Avoid using long or complicated codes that are difficult to remember.
2. Offering Steep Discounts
While offering, significant discounts can be a great way to attract customers, be careful not to offer too steep discounts. This can erode your profit margins and train customers to only buy from you when a deep discount is available.
3. Not Setting Clear Limitations.
It’s essential to set clear limitations on coupon codes, such as expiration dates and minimum purchase requirements. This will prevent customers from abusing the promotion and help maintain profit margins.
To Wrap Up
Discount coupon codes are powerful sales and customer loyalty boosters for eCommerce stores. Following the best practices for creating and promoting coupon codes, make it happen for your business, and watch your sales and revenue increase with every campaign.
If you do it right, you may see immediate results. Although, there is no one right way to do it and it may take a while, especially if you want to run multiple campaigns at once.
However, a proper built-for-result tool like TargetBay Rewards can help you get started and run a campaign within minutes.
