Benefits of using coupons for ecommerce websites

By Jason Hawkins on November 2, 2015

online coupons

We have come a long way from scanning the newspaper or magazines and cutting out coupons prior to going to the grocery store. This concept has gone to a new level with the online purchase and the ever increasing eCommerce transactions taking place.

A majority of online consumers at one time or another have used a coupon to make a purchase, whether it was for a dollar amount or percentage off of their final sale, or more commonly for free shipping. The online store is an easy way for people to get their products and services online and in front of a huge audience without the big up-front costs of finding a brick and mortar store and the high rents associated with the perfect location in order to gain the traffic to support sales and be successful.

Most eCommerce platforms support a coupon application right out of the box and if this functionality is not included, there are many plug-ins and extensions easily integrated, and there are some good reasons to use coupons on your site:

  1. Easy to track. The coupon code will clearly identify who purchased items with a specific coupon code and can quickly identify the success or not of your promotion.
  2. Increased conversions. It is proven that by adding coupons for discounts or free shipping will increase your conversion rate. You can identify this in your Google Analytics by time stamping the start of your offer and compare to a similar item at your regular retail costs.
  3. Increased traffic. If you are using special discounts in your traditional advertising, emails, direct mail, you will see a spike ion traffic to these relevant pages.

Although there are benefits to using online coupons, with everything in life there are things to consider that may not be beneficial:

  1. Reduced order value. This is the obvious downside to discounts or special offers as you may have to alter your price and in turn your profit margin.
  2. One Hit Wonders. It is normal for coupons to attract people who ONLY buy with a coupon or significant discount. This does nothing for repeat business and these types of customers are less likely to purchase at your standard pricing.

analytics ecommerce data

Now that you decided to use coupons in your eCommerce store, let’s discuss various options and ways to be successful.

  1. Your Offer must have a Perceived Value

Discounting $10 from a $300 purchase is probably not enough to leverage a sales so when you setup your discounts be sure to use something that may entice yourself to buy as you would otherwise they will simply ignore the offer.

 

  1. Timing is everything

Some stores run special offers all the time, with no consideration of the timing of their promotions which may be in part due to their competition and types of product they sell. If someone purchases a new computer, they may get offers of special software applications. If someone purchased a ink jet printer maybe send them a coupon for replacement cartridges a couple weeks after the purchase.

  1. Promote your coupons.

You can obviously publish the coupon on your website but if you don’t have much traffic then not many people will see your offer. You should promote your coupon through all your communication channels including:

  • Email-send an email blast which revolves around a specific product promotion
  • Social Media- loyal brand followers stay in touch with companies they regularly buy from, and most importantly they share these deals with friends and family increasing your targeted audience along with the products exposure. The coupon is a way to attract new customers to your store so you need to ensure that it reaches beyond your usual circles.
  1. Create a sense of urgency

Setting up a coupon and just leaving it active indefinitely won’t increase your sales and wont to much for potential return purchases.  Consumers are always shopping for deals, and unless you mix up your offers you won’t be successful just by placing a coupon on your website. Using a “Limited Time” offer prompts a sense of urgency to buy now, or before the offer expires.

  1. Keep it Simple

This might seem like common sense, but online shoppers are impatient and want instant gratitude.  If you use complex codes, or have to stand on one foot while entering a special code for a discount you won’t see a drastic increase in sales. For your coupon to be successful it should be simple to read and simple to type so consumers can easily and quickly enter the code. A best practice is to keep your coupon short and up to about 6 characters maximum, and avoid lookalike characters or ones that might be a number (o and 0 for instance) and don’t make them case sensitive.

  1. Use a dedicated landing page

If your code is restricted to a specific category of items or a set group of items, create a dedicated landing page to use when you advertise a coupon. This will create a much better user experience for your customers, who will see all products available for the coupon at a glance while allowing you to better target your message and measure the campaign performance.

In summary, coupons are a powerful marketing tool for any online retailer and If used correctly will help increase your conversions while providing much needed metrics and insight into your customer’s behavior. Here are some facts to consider:

  • “More than half of consumers who used a coupon code (57%) during their last online purchase said that if they had not received the discount, they would not have bought the item(s). That indicates that coupons can be a highly effective sales driver and can be leveraged as such.”
  • 91% of coupon redeemers say they will visit a retailer again after being offered a coupon
  • Coupon clippers spent $216 on their latest shopping trip compared to non-coupon clippers who spent only $122
  • Shoppers who use coupons report higher overall satisfaction from a shopping experience
  • 57% of shoppers say they would not have made a purchase without a coupon first

Coupons have also proven to increase loyalty among shoppers because the consumer using the coupon or coupon code believes they are being given a gift of sorts, consumers simply see coupon offers as a way brands are reaching out to make their lives easier. If you are interested in learning more about online shopping, ecommerce, or you are thinking about developing an ecommerce website, give the team at NoRiskSEO and TheMiamiSEO company a call to discuss our experience and get started selling on-line today!



About The Author

Jason Hawkins
Jason Hawkins / http://www.themiamiseocompany.com

Jason Hawkins is the CEO & Co-Founder of The Miami SEO Company. He has over ten years of experience in search engine optimization, conversion rate optimization and lead generation. His core responsibilities include identifying ways to increase value of services rendered, training staff on advanced SEO topics, and A/B testing internal processes to consistently improve client return on investment.