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12.Feb.2019 Pon Pandian Paulswamy - eCommerce
“We like getting gifts, we like being close to people who have given us a gift and might do it again.” says Seth Godin, the American entrepreneur, and marketing visionary in his blog.
Almost everyone loves receiving gifts. We all know that gifts are a great way to demonstrate that you care about someone. From the day of birth, humans have all experienced the pleasure of receiving gifts. The corresponding evoked feelings are ingrained in our psyche as much as those generated by a smile. Even when you give a simple surprise gift or special offer like a coupon to a customer, you are connecting with them and making them feel appreciated and special.
Undoubtedly gifting is a great way to build relationships. In business, positive customer relationships are worth their weight in gold and they can be leveraged to create a goodwill multiplier effect. In spite of this common knowledge, for many retailers, there is still a lingering question -Do coupon incentives really produce positive returns?
This blog explores and breaks down how coupons can actually incentivize customers to shop more, stay loyal and even spread the message
The hidden power of incentives in eCommerce: Here are seven ways coupon incentives create returns.
As just explained coupons work the same way as gifts. They create a positive bond that draws customers closer to your business. Even a small incentive like free shipping for the first order subliminally helps place your brand on the top of the customer’s mind.
A RetailMeNot survey found that customers are always looking for offers or discounts throughout the entire purchase journey. The study also found that 67% of customers said they’ve made a purchase they weren’t originally planning on because they found a coupon or discount.
According to Business Australia, “Giving your customers a reward for returning to your business can be an effective way of encouraging your customers to stay loyal to you.” Because a significant percentage of customers look for alternatives shopping destinations where they can find cheaper prices or better discounts, coupons are useful tools to deter this habit. They keep your loyal customers coming back to you versus looking for better deals.
To cite an example, let’s say your online store is offering a 5% discount coupon for a second purchase in the same week. Now when a customer is evaluating a buying decision, your store will appear to be a wiser choice than your competition. The buyer is less likely to feel the need to shop around your competition who could actually be offering the same or even better price.
Acquiring new customers can be five to ten times more expensive than retaining an existing one. If your store is facing that challenge, coupons use this loyalty benefit to help keep your churn low.
Getting a new customer to register as a user on your online store is not an easy task. Site visitors frequently need incentives to sign up before they purchase from your store. Coupons can act as those motivators that persuade new customers to sign up. Additionally, these first-timers can be converted into repeat loyal customers by adding coupons for future purchases to their store account.
Jersey Mike’s which has more than 1500 franchises open across the United States makes it enticing for first-timers to sign up with a free sub and drink on their birthdays.
No matter how well-planned the supply chain process is, orders sometimes get mixed up, deliveries get delayed or worse – they don’t get delivered at all. When such mishaps happen to your customers, an incentive can turn that negative experience into a positive one.
Zappos, which has sworn itself to delivering happiness, dodges bullets by offering customers coupons. Here is an example tweet that proves that coupons are very effective at solving problem situations.
Shopping cart abandonment is a menace that every online retailer struggles to address. Studies peg the average cart abandonment rate to be in the range of 67%. That is a huge amount of sales that any business is leaving on the table.
Is it possible to get them back? An abandoned cart email bundled with coupons can help turn those abandoned carts into completed checkouts. Brandless, an online grocery brand sends retargeting abandoned cart emails that include a $1 shipping offer. These retargeting emails not only remind customers that they have left something in their carts but also persuade them with coupons to complete the order.
We live in an era of hyper-personalization. The more personalized the experience the more likely the desired result. Retailers are trying to personalize the shopping experience at every stage of the shopping funnel. From displaying products that fit the budget range to those that match the last purchases, customer data is being used to drive higher conversions. Retailers, who want to personalize offerings for their customers, first have to get that data from their customers and coupons are proven to be a great way to do so.
A recent Harvard Business Review study on customer success found that 70% of customers would leave a review if given a coupon incentive. Given that product reviews are invaluable in helping convert sales, this use of coupons is a very small price to pay that provides a great return on investment.
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