Coupon marketing, one of the oldest marketing methods, has managed to survive to this day and even evolved with digital marketing. In todayâs competitive marketplace, a successful coupon marketing strategy can be used as an effective tool for driving sales, enhancing customer loyalty, amplify brand visibility and even attract new customers.
What is Coupon Marketing?
Coupon marketing is a promotional strategy to attract customers, stimulate sales, and enhance brand loyalty by distributing coupons offering discounts, special offers, or incentives. Coupons are typically distributed through various marketing channels such as email, social media, mobile apps, print media, and in-store promotions. The goal of coupon marketing is to encourage customers to shop by offering them tangible value in the form of savings or other benefits.
Businesses should focus on a several key components to develop a practical coupon marketing strategy. You can find details about the definition and benefits of coupon marketing in our Beginnerâs Guide here. However, in this article, we will delve deeper into different aspects of coupon marketing for a better and comprehensive understanding.
Importance of Segmentation in Coupon Marketing
There are many details you need to consider ensuring the success of your coupon marketing campaigns. But first you need to understand that you cannot achieve success by offering a coupon to everyone, at any time, and in any situation. Solution is to make segmentation a part of your coupon marketing strategy. You should use this for new customers, as well as your already established customer base.
Segmentation in coupon marketing means increasing the effectiveness of your campaigns by tailoring offers to specific customer groups. It involves dividing customers into different groups based on shared characteristics (such as age, gender, income, marital status, education, etc.) or behaviors (previous interactions, customer journey, customers’ purchasing behavior, including purchase history and loyalty status).
To be able to create highly targeted and personalized promotions, you can use customer data to segment your audience. Herogi provides a rich customer data platform and dynamic segmentation, so you can easily segment your audience based on user attributes and user events. Offering personalized discounts based on customer preferences and behaviors using segmented data increases coupon redemption rates and strengthens the customer-brand relationship by fostering a sense of exclusivity.
Use Cart Abandonment Coupon Campaigns
One of the first things comes to mind when sending coupon codes where segmentation can be used is abandoned carts. Cart abandonment happenswhen a customer adds items to their online cart but then leaves the website without completing the purchase. It is a major challenge faced by e-commerce businesses. Adding items to the cart suggests an interest in purchase, so you need to get them back to finalize it. For this, you can send emails, push notifications or other types of communication after the customer abandons their basket, offering a time-limited special offer if they complete their purchase within that time limit.
Using Herogi you can send abandoned cart coupons via e-mail or web push. You can easily create âAbandoned Cartâ campaignand choose âAbandonedCartâ as event trigger. You should enter email/push details such as: âDonât miss out! Use code XXXXXX for 10% off your order if you complete your purchase today!â.
Once you deploy your campaign if customer drops of from cart, it will trigger this email/push notification with the coupon code. Then you can monitor your campaign performance in the dashboard.
Choosing the Right Distribution Channels for Your Coupon Marketing Strategy – How to Distribute Promo Codes?
One of the most important steps of building your coupon marketing strategy is choosing the right distribution channels. Choosing the right channels will ensure that your coupons are seen by the right people at the right time.
To choose the right distribution channel, you need to know your target audience well. You should consider where your audience spends their time and most likely to interact with your brand online and offline. Then you should choose the channels that best suit their preferences and habits. The choice of channels should also align with your business goals, budget and the nature of your coupon campaign.
In coupon marketing, distribution channels are the ways you deliver your coupons to your target audience – such as email, social media, website, app, etc. Each channel offers unique advantages for delivering coupons. We can summarize the details as follows:
E-Mail Marketing: With high personalization potential and direct access to existing customers, e-mail marketing remains one of the most powerful tools for coupon distribution. Leveraging segmentation, you can generate tailored e-mails that match your customers’ profile, recent activity, and circumstances and send them at the right time and proper context. These personalized and timely emails can lead to higher open and conversion rates.
- In your e-mails donât forget to use catchy subject lines that highlight the coupon value and include a clear call-to-action (CTA) directing users to redeem the coupon.
- If you just started email marketing or trying to collect more email addresses for your database, you can also offer coupons in exchange for email addresses. When new subscribers join your mailing list, sending them a welcome email that includes a special discount can increase engagement.
- So, what kind of emails can you send? Here are some examples:
- Promotional Emails – They typically feature a specific discount or offer, such as a percentage off a purchase or a buy-one-get-one-free (BOGO) deal.
- Re-engagement Campaigns – You can help rekindle interest in customers who havenât made a purchase in a while by sending them a re-engagement email with a discount.
- Abandoned Cart Emails – When a customer abandons an item in their cart without completing their purchase, you can send them an email with a discount coupon to encourage them to complete their order.
- Feedback and Thank You Emails – By sending your customer an email thanking them after their purchase and including a discount they can use on their next purchase; you can increase customer satisfaction and encourage repeat purchases.
Social media: Social media is a powerful channel for coupon distribution, allowing brands to engage with a wide audience and leverage user interaction. As we said earlier, when choosing the right distribution channel, considering where and how your target audience spends their time is important. If you are targeting a younger audience, you most probably can find them on social media platforms (probably watching short form videos). With using social media platforms like Instagram, Facebook, TikTok or YouTube, LinkedIn you can reach a vast audience quickly. Research shows that about 74% of online consumers follow brands on social networks, just to look for coupons.
- You should tailor content for each platform accordingly – visuals for Instagram, videos for YouTube etc.
- To drive more traffic, you should create engaging and visually appealing content that encourage users to share and interact. Focus on creating eye-catching graphics or videos featuring your promo codes. Donât forget to add a clear CTA specifying how and where they can redeem it.
- How can you use social media for sharing coupon codes?
- Contests and Giveaways: You can create interactive campaigns that encourage users to share your coupons in exchange for additional entries or prizes.
- Influencer Collaborations: You can partner with influencers to promote your coupons, leveraging their audience for greater visibility. They can share promo codes in authentic ways, or you can allow an influencer to take over your account for a day and share their exclusive promo code.
- Social Media Ads: You can use platforms like Facebook and Instagram to run targeted ad campaigns that feature your promo codes. This method can enhance reach beyond your existing followers and attract new customers.
SMS Marketing: Providing immediate delivery and with high open rates, SMS marketing is an effective way to deliver time-sensitive coupons directly to customersâ phones. SMS allows for direct communication with customers who have opted in, ensuring that your messages reach a receptive audience. SMS often led to quicker responses compared to email or social media, as consumers tend to act on promotions they receive instantly.
- You should encourage customers to opt-in for SMS notifications through your website, social media, or during the checkout process. According to a survey from SimpleTexting, 50% of respondents would opt into a businessâs text messages in exchange for flash sales and time-sensitive promotions.
- Keep your messages concise and clear. Include the promo code, discount details, and a strong call-to-action that directs customers on how to redeem the offer. For example: âUse code BOGOFREE on select items. Hurry, while supplies last! [link]â
- To make the most of SMS marketing, you should combine it with geo-targeting (it is the practice of delivering advertising content to consumers based on their geographic locations). Using geo targeting increases the chances of catching a customer in the right place at the right time. For example, âHey [Customer’s Name]! Get 15% off tickets to tonight’s event at [Venue Name]! Use code EVENT15. Valid for locals only. Grab your tickets now: [link]”
Web Push Notifications: Web push notifications are small message alerts that are displayed on a visitorâs desktop or mobile device. The user doesn’t have to be on your website to get the message, they just need to have a browser open. This allows you to deliver direct and timely content. You can send quick notifications with coupons to keep your customers informed about current deals â if they are searching for wallets, you can send them discount codes for wallets. If they left something on their cart, encourage them finishing the purchase with a limited time discount.
- You should encourage users to subscribe to web push notifications by offering an initial discount or exclusive offer.
- You should send notifications at times when users are most likely to engage, such as during special events or product launches.
Using different channels together within your coupon marketing strategy rather than sticking to a single distribution channel will provide the greatest benefit.
Measuring the Performance of the Coupon Campaign – How to Measure the Effectiveness of Your Coupon Campaigns?
You’ve decided what kind of coupons you are going to send, which distribution channels you’re going to use, and you’ve started sharing coupons with customer. But, how do you know if your coupon campaigns are really working? How do you measure their impact on your profit?
Tracking the success of your coupons is just as important as creating them. In order to strengthen your coupon marketing strategy and change it in the right direction when necessary, you need to identify your most and least used coupons. To be able to achieve this you need to track some key metrics as below:
Redemption Rate: This key metric shows the percentage of distributed coupons that are used by customers. (For example, if you distribute 1000 coupons and 650 of are redeemed, your redemption rate is 65%.) A high redemption rate suggests that the coupon resonates well with the target audience. Donât forget to analyze which distribution channels (email, SMS, social media, etc.) provide the highest redemption rates.
Conversion Rate: This metric shows the percentage of customers who make a purchase after receiving and redeeming a coupon. It is crucial for assessing the effectiveness of coupon campaigns, as it indicates how well the promotion not only attracts customers but also influences their purchasing decisions.
Incremental Sales: This metric refers to the additional revenue generated as a direct result of customers redeeming coupons, which would not have occurred without the coupon incentive. It helps determine if the coupons are driving new sales or merely discounting existing purchases. To calculate incremental sales, businesses typically compare the sales figures during the coupon campaign to baseline sales figures from a similar period without the promotion.
Average Order Value (AOV): This measures the average amount spent by customers who redeem coupons, providing insights into whether coupons encourage them to spend more. If customers typically spend $20 but increase their spending to $35 when using a coupon, this indicates that your coupon strategy effectively drives higher-value purchases.
Customer Lifetime Value (CLV): CLV estimates the total revenue a business can expect from a customer over their entire relationship with the brand. By analyzing how coupons affect customer retention and repeat purchases, you can assess the long-term value generated by your promotional efforts.
Return on Investment (ROI): Calculating ROI involves analyzing total sales generated from coupon redemptions against the costs associated with the coupon campaign, including production and distribution expenses. A positive ROI indicates a successful campaign, while a negative ROI may suggest the need for adjustments in future strategies.
To effectively measure these metrics, you need to collect and analyze data from your coupon campaigns.
- You can track coupon usage and customer spending patterns using unique codes or barcodes.
- Also, surveys can provide qualitative insights into customer satisfaction and perceptions regarding the coupon offers. You can ask customers how they found out about the coupon and what influenced their decision to purchase.
- A/B testing can be used to compare the results of two or more coupons. Implementing different coupons allow you to compare outcomes and refine your strategies based on performance data. Experiment with different coupon types to see what resonates best with your audience.
- Website analytics platforms like Google Analytics can provide detailed insights into customer behavior, including traffic sources and conversion rates linked to coupon codes. You can set up goals and track how many visitors use the coupon to make a purchase.
Coupon Marketing Best Practices
To maximize the effectiveness of your coupon marketing campaigns, here are 7 best practices to consider:
Define Clear Objectives
Before launching a coupon campaign, you should clearly define what you aim to gain from it. Are you looking to increase sales during a specific period, acquire new customers, boost customer loyalty, or promote a new product? Defining your objectives will help you shape your coupon offerings to suit your specific business needs and measure the success of your campaign accurately.
Personalize Coupons
Personalization is key in todayâs marketing world â and coupon marketing is no different. You cannot achieve success by sending the same coupon to everyone at the same time and in the same way. Instead, you need to implement unique, single-use codes tailored to individual customers. This approach not only minimizes misuse, but also makes your customers feel valued and special – who wouldn’t like a 25% discount coupon sent to them on their birthday? You can also segment your audience based on their purchasing behavior and preferences, so you can send more targeted offers to each group.
Create Urgency
One of the most effective ways to encourage immediate action from consumers is by creating a sense of urgency. When they know that a deal wonât last forever, theyâre more likely to act quickly. According to an article on Psychology Today, customers donât want to miss out on a valuable chance to make a purchase at an appealing price point. Set expiration dates on your coupons and use phrases like âlimited time onlyâ or âwhile supplies lastâ to create a sense of urgency and FOMO (fear of missing out). Time-sensitive offers create excitement and prompt customers to act quickly, making them less likely to forget about the offer.
Design Visually Appealing Coupons
The visual appeal of your coupons can make a significant difference in their effectiveness. Customers appreciate attractive visuals, so invest time on designing and make your coupon stand out by using vibrant colors and fonts that align with your brand’s aesthetic. Ensure your coupons are eye-catching and easy to read; also, the value proposition (such as the discount amount or unique offer) needs to be prominently displayed. A well-designed coupon not only captures attention but also encourages customers to take action.
Diversify Coupon Types
While discount codes are popular, they are not the only offer you can promote. Consider offering a variety of coupon types to appeal to different segments of your audience:
- Free shipping: A highly attractive offer that can reduce cart abandonment.
- BOGO (Buy One Get One): Encourages higher sales volumes.
- Referral discounts: Incentivizes existing customers to bring in new business.
- Mystery discounts: Adds an element of surprise and excitement.
By diversifying your coupon offerings, you can keep your promotions fresh and engaging while catering to varying customer preferences.
Create A Customer Reward Program
We know that coupon marketing can help enhance customer loyalty. One of the simplest ways to achieve this is to create a customer reward program. In exchange for consistently choosing to buy your products over your competitors, customers receive exclusive offers that provide value and let them save money. Many rewards programs offer coupons as an incentive. As many as 84% of consumers say they will remain devoted to a brand that offers a loyalty program, according to research from Nielsen. Reward loyal customers with exclusive discounts or bonuses for repeat purchases. This strategy not only incentivizes continued business but also strengthens the relationship between your brand and its most valued customers. Remember this, a well-executed reward program will help turn occasional buyers into lifelong fans.
Monitor Frequency of Offers
While coupons can be effective, overusing them may lead customers to expect discounts regularly, potentially devaluing your products or services. Use coupons strategically and sparingly to maintain perceived value while still driving sales.
Coupon Marketing Tools and Plugins
Managing coupon campaigns can be complex without the right tools. Hereâs a closer look at some popular coupon marketing tools and plugins making it easier to create, manage, and analyze your promotions.
For WordPress users, the WooCommerce Smart Coupons plugin is a top choice. It allows users to create a variety of advanced coupon types, including BOGO (Buy One Get One) deals, percentage discounts, and fixed amount discounts, all while offering extensive customization options. It also supports gift cards and store credits, enabling businesses to enhance customer loyalty through personalized offers. Additionally, it supports bulk coupon generation, making it ideal for larger campaigns or seasonal promotions.
Advanced Coupons is a highly rated plugin for WooCommerce that offers extensive features for creating dynamic coupon codes. Users can set up BOGO deals, schedule coupons, and create conditional discounts based on cart value or customer attributes. This level of customization allows businesses to tailor their promotions effectively, enhancing customer loyalty and engagement. With a user-friendly interface, store owners can manage coupons efficiently and access detailed reporting to analyze the performance of their campaigns.
OptinMonster is primarily a lead generation tool but also includes coupon marketing functionalities. It offers exit-intent popups, allowing businesses to present discount offers to users about to leave, effectively reducing cart abandonment. You can offer discounts in exchange for email sign-ups, effectively growing your mailing list while driving immediate sales. Its âClick to Copyâ button simplifies the process of applying coupons, reducing friction during checkout and boosting conversion rates. The Coupon Wheel feature gamifies the experience, encouraging customer engagement and incentivizing purchases. Additionally, OptinMonster offers advanced targeting options to display personalized promotions based on user behavior and location, ensuring that the right offers reach the right audience.
Designed for ease of use, Coupon Creator integrates seamlessly with WordPress and works well with both Gutenberg and page builders. It provides a robust dashboard for creating unlimited coupons with customizable templates. This plugin also allows bulk editing of coupon expiration dates, making it efficient for managing multiple promotions.
Although not solely a coupon tool, ReferralCandy enables you to create referral programs that reward customers with discounts for bringing in new buyers. This strategy not only promotes your coupons but also helps expand your customer base organically. This approach not only promotes coupon usage but also helps expand customer bases, driving organic growth through word-of-mouth marketing.
The Herogi WordPress Plugin is a powerful tool that seamlessly integrates the Herogi customer engagement and customer data platform with your WordPress website. With this plugin, you can effortlessly gather valuable insights about your website visitorsâ behavior, enabling you to understand their interactions, preferences, and actions on your site.
Herogi is primarily a customer engagement solution but also has some features that you may use in coupon marketing:
- Herogi tracks various client-side events, such as page views, clicks, logins, registrations, product views, add to cart, abandoned cart, and order completions. You can even set up custom event tracking to capture specific user interactions.
- Herogi provides a rich customer data platform and keeps different customer information (gender, city, language, subscription information etc.). You can segment your audience into groups based on different criteria, such as user attributes, notification preferences, and real-time behavior. Segmentation helps sending more targeted offers.
- Leverage the rich marketing automation features of Herogi to create personalized and targeted campaigns based on customer segmentation and behavior. You can engage your customers through email, SMS, web push notifications. This gives you the capability of distributing your coupons with various channels.
- Reach your customers through their preferred communication channels. The plugin supports email, SMS, web push notifications, and custom API calls, ensuring you can connect with your audience wherever they are.
CONCLUSION
Implementing a practical coupon marketing strategy requires careful planning and execution but can yield significant rewards when done correctly. By defining clear goals, understanding your audience, and effectively promoting your offers, you can maximize the impact of your coupon campaigns. An effective coupon marketing strategy is not just about offering discounts; itâs about creating meaningful connections with customers that drive long-term loyalty and growth. With careful planning and monitoring, your business can leverage the power of coupons to achieve lasting success.