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How to Improve Digital Coupon Usage for your E-Commerce Business

Coupons. Discounts. Deals. Promotions. By now most of us have heard that it’s much cheaper to retain a customer than it is to secure a new one, and e-commerce businesses are flooding their customers with reasons to return. 

These programs are designed to reward customer loyalty and keep people coming back to your store. Over time, merchants have gotten more and more creative with how they reward and engage with customers.

Unfortunately, many e-commerce businesses invest heavily to plan and execute their discounting strategies, only to watch the resulting discounts they distribute go largely unused; statistics show that digital coupons haven’t gained the traction we would expect.

According to statistics compiled by Access, 4 out of 5 consumers claim to use paper coupons regularly in a brick and mortar setting, which is no surprise — we all know how effective coupons can be in garnering a sale. An even greater number of consumers actively search for coupons before going out to shop, and half shop specifically because of a coupon or a sale. However, when making a purchase online, only 63% of consumers said that they have ever used a digital coupon.

Clearly, consumers love coupons, so why aren’t e-commerce customers taking advantage of them? Are digital coupons just not destined to become mainstream?Sweet Green Picture

Recent research demonstrates that the potential for digital coupon adoption certainly exists. The same Access study revealed that the demand for digital coupons is higher than ever. Despite the continued prevalence of physical coupons, more than half of consumers wish all coupons are digital. In fact, 80% said that mobile phone coupon availability increased their brand loyalty, and 82% of customers say digital coupons are more convenient than paper coupons.

Once again though, that begs the question:

Why don’t e-commerce consumers use digital coupons?

So how can we improve digital coupon usage to match, or perhaps even surpass, the success which paper coupons have historically enjoyed in a brick and mortar setting? The answer (or part of it, at least!) is right here in this post!

We’re going to highlight 3 key areas to focus on while building your discounting / digital coupon strategy: Accessibility, Appeal, and Reactivation.

Accessibility

Understanding the reason why people have been slow to adopt Rational Consumerdigital coupons boils down to understanding one simple fact about the rational consumer: consumers are out there to get the most out of the resources they have. Paying less for an item clears up some extra cash the consumer can use elsewhere to gain even more “utility” (i.e. enjoyment out of the products they can afford to purchase). Seems simple enough, but there’s a catch: when your coupon is difficult to find, the customer is simply content to move on to the next option to save time.

Presenting beautiful and eye catching coupons can go a long way towards helping you to improve digital coupon usage. You could choose to promote them through a larger program in your website’s footer, or through a small text hyperlink in the corner of your web page, but most shoppers aren’t going to spend enough time on your website to notice little things; unless the coupon is front and center, your visitors will miss out on your offers and you’ll miss out on potential loyal, long-term customers. A well placed tab, a link in your site header, or a popup on your homepage are much more likely to catch a customer’s eye. The goal here is to make your coupons as retrievable and accessible as possible. These efforts will make customers much more aware of the deals available to them, and like we said, if the customer sees the deal, they’ll take it! 

swell-redeem-points-at-checkout-shopify-plus

Swell allows Shopify Plus merchants to redeem points directly at checkout.

Another time-waster is requiring customers to copy and paste their coupon code in at checkout.  When customers have to copy a coupon code and remember to paste it in, they’re much more likely to forget their code and have a subpar experience on your site. Setting up your coupons to automatically apply at checkout is a great way to help customers save time and easily take advantage of the discounts they’ve earned. For example, Swell helps Shopify Plus merchants add in a feature which allows their customers to redeem and apply a coupon (in exchange for points) directly on the checkout screen. Similarly, if you’re giving out coupons for a specific action (e.g. signing up for your newsletter or referring friends), emailing coupon codes out gives customers a place to save their coupons immediately and more permanently. Email serves as a failsafe, while also reinforcing your dedication to your customers!

Once you’ve done all you can to make your coupons easy to use, it’s important to remember that getting customers to commit can be a numbers game. For paper coupons, far less than one percent of manufactured coupons are ever actually redeemed, and so e-commerce businesses should make it a priority to present their coupons and promotions as frequently as possible. A customer might miss your promotions a couple of times, but eventually they’ll take notice!

Here are some great methods that help keep customers engaged without ruining their user experience when they visit your website:

  1. Focused Social Media Posts: In today’s world, because so much information is available to consumers, people don’t like receiving advertising when they’re not looking for it. Social media is one of the only places where you can create content your customers will enjoy seeing on their newsfeeds. Generating buzz and inbound traffic will increase the “reach” of your posts, and centering those posts around your promotions will in turn increase the success of those promotions.
  2. Well Designed Popups: People tend to think negatively of popups and view them as an annoyance, but all of the data out there suggests that they work incredibly well. To a shopper, a beautifully-designed popup is simply another chance to score a deal. Optimizing your popups to appear early in the shopping experience, right before checkout, or when customers are thinking about leaving your site can drastically improve digital coupon usage. Swell’s Newsletter Signup tool allows users to both customize when and where your popups will appear and even give you exit-intent control. 
  3. Email Blasts: We have to be careful here. For most customers, email accounts are increasingly saturated to the point where a customer is less and less likely to open and consider your email. So while email campaigns can still be useful, a larger list yields the best results. If you’re planning to rely on emails, you might want to try email capture campaign to build a strong base.

Appeal

Building an appealing set of coupons can mean difficult decisions for businesses. Often times, risk-averse stores choose to offer low value discounts, but skimping on coupons ends up being a bit of a gamble as well. Statistics show nearly half of customers would unsubscribe from a list immediately if they don’t think the deals a program offers are worth it. If you aim low with your rewards, do so with caution!

Considering when you choose to use dollar-off discounts versus percent-off discounts can go a long way towards increasing the appeal of your coupons as well. For a store with low-priced items (ranging approximately from $1-30) using a dollar off coupon may not be very enticing to consumers. For example, on a $30 product, a 10% off coupon sounds significantly more appealing than its meager $3 equivalent. However, for higher priced items, large concrete discounts can be very appealing to customers, while at the same time preserving your margins. On a $1,000 product, offering $50 off to a customer can feel like a larger reward than a lowly 5%.

Appeal is all in the eyes of the beholder, and it’s your job to dress your coupons appropriately. Once you’ve created attractive deals, they need to be presented to customers in an appealing way. A plain white popup, or a popup with a low-quality image pasted behind it, will not be enticing to customers even if presents a great deal. Methodically crafting your site’s aesthetic will make customers want to stay on your site longer and inherently make them more likely to find your deals and make purchases. If you’re a Swell user, remember that you can just click on the Customize Popup button for each respective popup you’re designing to gain extensive control over each one’s look and feel.

Reactivation

Like we said before, customers typically only like receiving advertising when they’re looking for it. This is one of the reasons paper coupons have so successful for so long; many people go through their newspapers and magazines specifically looking for coupons.

While sites such as RetailMeNot and CouponFollow are somewhat popular, the online equivalent of a coupons section of the newspaper doesn’t quite exist today. That being said, e-commerce businesses can achieve a similar success rate by focusing on “reactivation” to improve digital coupon usage. A reactivated customer is a previous customer that begins to make purchases at your store once again. 

The easiest place to find people who will love and welcome your promotions is to look to your previous customers! The facts don’t lie: it costs much less to retain a customer than it does to find a new one; the cost in terms of both time and resources of maintaining your current customers is a mere fraction of what you need to spend to attract new visitors to your site. Your previous customers will be most receptive to your promotions and getting them involved in your program will help make them returning purchasers for the long term.

There are several proven ways to encourage coupon usage and incentivizing longer term investments can be highly effective. Similar to accessibility, the simple ways to achieve this are emailing your previous customers and posting on social media. A rewards program is another proven way to make sure your customers will keep coming back. Rewarding customers with points they can build up gives them reason to buy from you again and redeem that discount they’ve been working towards. Swell’s program even sends out email reminder notifications to customers who’ve been inactive or who have enough points to redeem a coupon with your store. 


 

Often times, it can be tempting to send masses of coupons out and hope they’ll be successful. But there’s a reason digital coupons have struggled to gain real traction, and its not because they’re unwanted. With a little bit of planning, you’ll improve digital coupon usage and keep customers engaged and excited by your store and your programs!

 

Digital CouponsIncreasing Coupon UsageLoyalty Programs

Nikhil Naidu • August 2, 2016


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  1. Use "Sticker Shock" to Make Your Promotions More Effective

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