What are the Benefits of Offering Coupon Codes for Ecommerce Sites?
In this economy, couponing could be more important than ever. Not only do they help people save money during the actual purchase, but they are also an excellent opportunity for companies to retain a price conscious customer at a critical point in their shopping experience.
On the customer-side, who doesn’t want to save money? My mom taught me at a young age to hunt for deals and personally I’ve never paid full price for anything since about 2005. Anything that says “X% off” on it has my name all over it.
Do I need it? Probably not, but it’s on sale so I might as well get a good deal...
With a +23% increase in search volume for savings-related queries in comparison to 2019, consumers are also looking for ways to save this holiday season.
For companies and brands, coupons can be used to convert customers who were on the fence, gain loyal customers, and engage with repeat customers. You can also leverage coupons to learn more about your customers and their behavior shopping on your website.
Sure you are “losing” some money on that one purchase, but if we’re playing the long game -- coupons can help your customers save money and make you more at the same time. 🤯
How? Well, studies have shown that customers are more likely to make larger, higher-valued purchases if they have the option to use a coupon or multiple coupons. Even if that means that they ultimately order more products and spend more money, the psychology behind receiving a discount is incredibly powerful.
Mom was on to something, huh?
Popular Types of Coupons
This blog post mostly delves into on-site coupons, if you are interested in leveraging off-site coupons, we walk through a customer's shopping experience with coupon sites in this blog post.
Your website or app can provide users with coupons and discounts in many different ways. A few popular examples are:
Discount / Promo Codes
Email Signup Offers
SMS / Push Notifications
However, you decide to provide these discounts, tracking them in your analytics platform (we’ll be using Google Analytics examples in this post) is vital to see any ROI.
Tracking Coupon Codes in Google Analytics
To begin, you need to make sure that:
- If the coupon is used on your site, it can be easily collected through Enhanced Ecommerce as a custom dimension.
- If the coupon is collected in person, ensure that the correct information is logged into your CRM. The purpose of closed-loop is to combine the CRM (offline) and website (online) data to tell a cohesive story about the customer journey. Here the coupon can be brought into the CRM and GA via a custom dimension and linked by a common identifier like Client ID.
- If the coupon is redeemable via a third-party, built-in integration, etc. -- your developer or Analytics partner can implement custom tracking to send the data to GA as a custom dimension.
Analyzing User Behavior with Coupons
Once you track coupon usage on your site via custom dimensions, this is where the real fun begins. You can add this dimension to most reports in GA to see:
- Which channels were more likely to use coupons?
- How do the actions of the coupon-using audience differ from that of another audience?
- What types of content do they interact with more often?
- Which products do they view more often?
- Do they purchase on the first visit or in subsequent visits?
- Do they spend more than users who don’t use coupons?
- Are they less likely to return items?
- Which coupon codes have the best ROI?
There is so much you can learn from coupon usage to strategize marketing efforts by channel, ad copy, and site content. It can truly provide you a new avenue into the mind of your customers and their purchasing and shopping behaviors.
6 Ways to Act On Insights from Coupon Data
Based on the questions posed above, here are some ways you can act on this information:
1) Adjust Product Strategies
Coupon behavior tracking may show you that this audience is interested in this set of core features vs others. For example, if you have a product with varying tiers like Basic, Business, and Enterprise, you might see that users are interested in Business features but need to use a coupon to afford it.
Perhaps you didn’t think of creating a different version of your product (somewhere between Basic and Business) before but based on enough demand, you should.
Or, based on this coupon-using audience’s content consumption and site searches, you see there is a gap in features or a new product you can create.
2) Create Content to Fill Gaps
Just like the example above with product/feature gaps, there may be content gaps identified by this couponing audience. Maybe they are more ROI-focused or value-focused (which is understandable) and you need to be able to prove you’re worth the investment.
If data shows that this audience is going back and forth between the pricing page, features pages, and a case study on your site -- content that outlines how much time/money your product could save them or how you’re less expensive but better than your competitors can be developed with this insight to help you close more deals.
3) Provide an Alternative Payment Method
Maybe you sell a high-priced product at $1,000 apiece. Does your customer have $1,000 laying around to spend? Maybe. But if not, they may be discouraged by your product offering.
If you find that customers often leave after viewing the final price, you may offer a payment plan or a load provider to help ease the initial sticker shock. In fact, there’s a whole market of tools built around this behavior.
4) Increase Customer Loyalty and Additional Purchase
Coupons can help cater to a number of conscious/subconscious notions, including:
- Everyone likes a good deal
- No one wants to feel like they’ve overpaid
- Everyone wants to feel special
Coupons can help you make your customers feel special and important. They are the chosen few that got this coupon. And who knows, this could bring them back more often or entice them to purchase more than they normally would.
They may have anchored themselves in your original price (which gave you a 30% profit margin) but with the discount, they feel like they are getting a deal and you still make the sale at 25% profit margin (the price you intended to sell it at anyway). That’s what I’d call a win-win situation.
Bonus: May they tell a friend about this great deal. You just got a free referral. You’re welcome.
5) Beat Out Your Competition
Would you rather have $0 or $10? Personally, I’d rather have $10. If your competitor has a lower price or is running a promotion, maybe you should think about running a promotion as well to make sure you get the business.
Now, I get that you can’t always undercut your competitors or yourself, how else would you make any profit margin? But if you are selling something for $100 and your customer only has $90, is that 10% off going to make or break you? You decide.
6) Regain Lost Customers
In addition to the analysis benefits, coupons can be used for retargeting users that you might have otherwise lost.
If you have a page on your site dedicated to coupons, you can see how many users were on this page (pageviews) and determine how effective coupons are in driving purchases (conversions using a coupon or after viewing this page).
If users did not convert after visiting the coupon page, audiences can be made in Google Analytics and then imported into Google Ads to run retargeting campaigns. Depending on your purchase funnel and purchase cycle, ads containing coupons can be presented to users 7 (of however many) days after visiting your site. Maybe they weren’t ready to purchase then, but now with 15% off, it sounds like a good idea.
Once that user becomes a customer (using a coupon), future targeting efforts can be implemented for that specific audience since you now know they are price-conscious and more likely to act with a little incentive.
Make the Most Out of Your Coupon Strategy
Are you convinced yet? I know I am. Let’s start making money! 🤑
If your brand is ready to kick things up a knotch when it comes to your Ecommerce strategy, check out Seer’s Analytics services and get in touch.