Humans have their brains hardwired to save money, and brands know that. So, they are always looking to attract new customers, and coupons serve exactly that purpose.
According to a survey reported by Statista, 88% of the respondents in the U.S. said they had used coupons for shopping. Although this was 6% less than the previous year, it’s a significant number nonetheless.
Considering the present business climate, discounts and coupons serve as a note-worthy budget line item for businesses while devising their annual budgets. Organizations, big or small, cannot afford to overlook the financial impact of coupons.
But what constitutes a successful coupon campaign?
Along with an enticing offer to lure the potential buyer, it also takes a worth-trying product and service to fortify the customer relationship and ensure recurring purchases.
What Makes Coupon Marketing Effective?
Now the question arises why do customers still like coupons? Since consumers’ habits may change with time, then why is this not the case with coupons?
There are plenty of reasons why coupons still play a pivotal role in the retail environment. I will discuss three of them below.
1. Coupons Make People Happy
Coupons and discounts do wonders for a consumer's mood. They bring in joy and make receivers happy. According to a study conducted by Paul Zak ( a neuroeconomics researcher at Claremont Graduate University), redeeming coupons increases oxytocin levels and reduces stress. The research clearly stated that having a coupon makes you happier than receiving a gift.
2. Coupons Invite New Experiences
According to a survey conducted by RetailMeNot, 80% of consumers feel they can try a new brand if it’s available for a significant discount. This shows coupons have the power of introducing your products to a completely new audience. If customers find value in the things that are being offered, they are extremely likely to stick around.
3. Coupons create a Sense of Urgency
Limited-time coupons create a sense of urgency. They do this through something that’s called "scarcity marketing," where marketers utilize the customer’s fear of missing out.
This is why stores have deals that are "ending soon" and discounts that will soon expire. It’s all about putting the customer against the clock and letting their mind do the rest.
Can Small Business Afford Big Discounts?
Large retail chains can afford to be extremely generous with their discounts. But what about small businesses that have a limited customer base? One can argue that coupons have more value for the latter.
Coupon marketing does not require a significant investment. eCommerce startups can simply create promo codes and release them on the web to attract hordes of customers. With the rise of digital coupons, this mode of marketing has become extremely popular among emerging online stores.
If the product or service is of good quality, the curious first-time buyers can be transformed into loyal, long-term customers. But it’s never advised for businesses to get their customers addicted to discounts.
Coupons can work against you if you go overboard with them. So practice a certain level of precaution, especially if you’re working with a coupon affiliate website.
Working With Coupon Affiliate Websites
Businesses can promote their discounts on several affiliate websites to get higher visibility and more customers. The whole thing can be somewhat complicated. There are two main strategies you should apply from the start.
1. Control How Affiliate Commision and Discount Impact Your Bottomline
When you start a campaign on a platform, it charges a certain percentage of revenue as a service fee. Let’s say your product or service sells for $100. Offering a 30% discount to customers will make you end up with only $70. Assuming an affiliate gets a 20% cut, you will get $56 for something that you would have otherwise sold for $100.
Return customers on these platforms are never guaranteed, which makes them somewhat risky for small businesses. Despite that, there are a lot of ways to make these sites work in your favor.
You can package your services and deals. Make your customers buy multiple offerings instead of a single one-and-done deal. Combine low-margin products with high-margin products.
2. Integrate Discounts With Other Customer Centric Strategies
Creating a seamless customer experience is important if you want coupon redeemers to come back. Experiment with other incentives rather than offering straight-up discounts. Try an add-on service on the next purchase, so people can get something free when they pay the full price. Referral discounts can also work wonders.
Set limits on your deals. For example, restrict a deal to new customers only or advertise it as one per visit and/or person. You can also limit the coupon availing period to a specific time, like 120 days after purchase.
How to Advertise Coupons Without Hurting Your Profit
Again, to make coupon campaigns work your way, you have to be extremely cautious when devising a campaign.
Here are some tips to consider:
- Use coupon codes to track the right platform for you
- Focus on digital coupons as they are easy to redeem
- Try split testing with your existing customers to see what brings them back and results in recurring purchases.
- Offer gifts with purchases. For example, Spend over $70 and receive a free ice cream, etc. Decide how much you can afford to give while keeping your revenues in the green.
- Use AI in coupon marketing. Invest in data collection and analytics. Having a unique customer identifier by your side, maybe in the form of an opt-in mobile app, can acquaint you with your consumers’ browsing patterns.
- Lastly, but most importantly, don’t overdo it. You should know where to stop.
Conclusion
We are living in a constantly changing digital marketing world. Things, trends, and tactics are constantly changing, so it'd be wise for marketers and businesses to consider what works for their specific needs and keep tabs on the latest technologies.
As your business grapples with maintaining or improving its standing in the present market, jot down the goals and consider all the best possible options before adding coupons to your marketing strategy. Maybe one thing that works for other businesses does not work the same for you, so it's utterly important to know what your business needs rather than jumping on the bandwagon.
Last but not least, don’t underestimate the power of social media when it comes to promoting coupon campaigns.