Article

Eight insights for maximizing online coupon use

Think beyond discounts, maintain clarity and update your offers frequently in order to keep promotions fresh.

June 3, 2010

By Christian Gordun

According to Borrell Associates, online coupon redemptions are projected to jump more than 50 percent to $12.7 billion in 2010 and to $22 billion by 2014. By definition, online coupons are codes and special activated links and/or landing pages for online retailers. They are solely meant for the shopping cart checkout process and are not valid in brick and mortar stores.

This recent uptick can be directly correlated to the success of the e-commerce marketplace, which has enjoyed year-over-year growth at a time when retail sales nationally continue to fall. As consumers continue to look online for the best deals, retailers are beginning to increase their use of the Internet as a distribution channel and online coupons have followed suit. And perhaps the strongest benefit of online couponing is the ability to analyze data aggregated from redemptions. Retailers have the ability to examine usage patterns among shoppers that used coupons to determine strategies for optimal returns.

Here are eight key insights about online coupons that will help prevent customer disappointment and frustration, protect brand reputation, and decrease cart abandonment.

1. Think Beyond Discounts: If you have a luxury brand and don’t want to discount items, there are other creative ways to offer customer incentives including free shipping or gift wrapping and throwing in bonus items. You don’t always need to cut the price!

2. Beware of Expiration Dates: These are always a big problem since some retailers don’t put expiration dates on their offer when it is in limited supply. Others don’t clarify times (i.e. time zones), but those few hours can make a difference to a shopper. It’s critical for a merchant to offer all the details up front and in a clear and concise way to avoid customer frustration.

3. Mix it Up: Don’t keep recycling the same offer over and over again each month. The monotony will stall sales since users come to expect the discount. Create urgency with new offer and expiration dates.

4. Keep it Simple: Using lingo such as "$10 off after MIR" (Mail in Rebate) or unclear combinations such as "10 percent off purchase plus free shipping with $50 purchase" will leave consumers confused and unlikely to apply the discount. Restriction details also demand clarification. Clearly outlining details on landing pages will prevent customer disappointment when they arrive on the site.

5. Watch Number and Letter Combinations: Careful using coupon codes with "0" and "O" in the sequence. People often confuse the two and usually get upset at the merchant when the discount doesn’t get applied. Avoid using these all together unless your coupon code is all numbers or all letters – don’t mix and match.

6. Test Out Different Offers: Retailers often assume there’s one coupon that works better for them – e.g. new customer offers, dollars off, percentage off, free shipping. The flexibility to add and change offers online is easy though, so never assume only one works best.

7. Align Coupons to Company Goals: Is the goal to increase basket size or raise minimums? Are you trying to clear inventory or reach new customers? There are many different strategies that can be applied to coupons so always be sure to test and align with what the company’s goals and needs are.

8. Be Transparent with Minimum Price Points: Deals are often listed as "20 percent off" but when customers get to the landing page it may say “20 percent off $100 purchase.” This can be misleading to consumers and cause a negative impact on a brand. Always provide as much information as possible up front so that users clicking through are fully aware of the amount they must spend.

Christian Gordun is the founder and CEO of online coupon code and deal site Coupon Craze, which currently works with more than 11,000 online retailers. (Photo by Torley.)