online coupon marketing strategy

Jun 07, 2022 • 7 min read

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How And When To Use Coupons On Your Site For An Effective Marketing Strategy

Building an ecommerce site doesn’t mean that it will be successful. The site is only 1/2 of the equation, the other 1/2 is buyers. To be successful you need to attract buyers. There are a lot of different ways that you can attract new customers to your site and encourage previous buyers to return. Books have been written, courses developed just to show you how to drive a steady stream of buyers to your site.

One method that has worked in retail almost since there has been retail is couponing. Everybody loves coupons, and that means that EVERYBODY loves to use coupons. Building a coupon marketing strategy is one of the absolute best ways to drive traffic. They work because coupons, as a concept, serve one single purpose, changing the user’s buying habits.

What Are Coupons?

Coupons are a pull marketing strategy that merchants use to change buying habits. The hope is that, if you change your habits once and like it, that the new habit will stick without the need for more coupons. 

If you normally buy brand X wine but you get a coupon for brand Y wine, the hope is to break your existing buying habits and convince you to try brand Y.

Additionally, some coupons are designed not to make you change brands but to buy more. Some coupons for brand Y wine are not for people who have never tried brand Y but those that regularly buy a bottle. The hope is to change their buying behavior by convincing them to buy more than they usually do. 

Both of these types of coupons are trying to change buying behavior, but each targets a different behavior and thus a different group of consumers. 

Physical Coupons

Physical coupons are usually printed pieces of paper with a discount code on it that retailers will honor. Many times physical coupons are distributed by the postal service, however, in some cases, they are handed out at a store. Physical coupons are more costly for retailers because there is a physical cost to creating and distributing them. Even if they are printed on a copier and handed out by employees at the store, they cost. This means that retailers are more cautious about what they offer with physical coupons. Experiments are more expensive so most retailers stick with what they know will work to change behavior.

coupon marketing strategy - Physical coupons

Digital Coupons

On the other hand, digital coupons have almost no costs associated with creations and distribution. If you are using WordPress and WooCommerce and want to run an online coupon marketing strategy, you can create a 10% off coupon for your T-Shirts and send it to everyone on your mailing list. Your total cost for this was the time it took to enter the coupon into the system and write the email.

coupons marketing strategy - Digital coupons

Because they are so cheap to create, many retailers set their online coupon marketing strategy incorrectly. They will literally create a 10% off coupon for one of their products and send it to everyone they can, hoping that if they send it to enough people that they will generate some sales. The problem with this “shotgun” approach to coupons is that if you do it enough, the only behavior you are changing is that you are teaching your customers to wait to purchase until you send out a coupon. This is not the behavior you want from your customers.

3 Key Ecommerce Coupon Marketing Tips

In order to create an effective coupon marketing strategy, before you create your first coupon, ask yourself, “what behavior am I trying to change?” Then, figure out which customers have that behavior, and craft not only a coupon but a message specifically for those customers.

1. Set the behavior you want to change

Let say you want to increase your average cart value, the amount of goods that a customer buys in any given transaction. One way to do that is with a digital coupon.

For every customer that regularly purchases from you, but purchases less than $50 per transaction, send them a coupon to give them a 10% discount on their next transaction if it is over $75.

Don’t send them more than 1 of these coupons and don’t send this coupon to every customer on your mailing list. Only send it to customers that have already purchased from you once and you expect to purchase from you again.

For each customer that uses this coupon, you have changed their behavior, at least once, and increased your average cart value for that customer.  Whatever you do next, do not send this customer another “10% discount when they purchase $75 or more” coupon. Sending them the same thing over and over just encourages the bad behavior of waiting for the coupon to arrive before purchasing. 

2. Personalize your coupons

Digital coupons are easy to personalize. Up to this point we’ve talked about sending out coupons to groups of customers, but you can easily create a coupon that is good only for a specific person. The most common version of this is a birthday salutation

If you have collected your customer’s birthday (or any other special life event date) then you can easily send that person a happy birthday email and a special discount coupon good only on their birthday.

If you are going to do this, make it personal.

Bad:

HAPPY BIRTHDAY, HERE’S 10% OFF OUR LATEST BOOK

Better:

TODAY IS YOUR BIRTHDAY, SINCE YOU LIKE X, HERE IS A 30% OFF COUPON FOR X IF YO BUY TODAY.

Best:

CAL, TO CELEBRATE YOUR BIRTHDAY TODAY, WE WANT TO GIVE YOU A 30% OFF OF X BECAUSE WE KNOW YOU LIKE X. IT’S ONLY GOOD TODAY.

The best scenario above takes more time because you have to do a little research. You have to figure out who is having a birthday tomorrow. If they are a regular customer, you also want to figure out what they buy the most of and offer them a coupon for that.

This type of coupon builds brand loyalty. By offering a sizable discount on something they already purchase from you, you are letting them know that you appreciate their business. This will stick in people’s mind and they will remember it the next time they go to buy anything that you sell.

You can do this for customers that haven’t bought from you yet but you need to remember two things:

  • It needs to be sincere
  • It needs to be a steep enough discount to cause someone to buy something from you.

A generic Happy Birthday email with a 10% discount on something the person would never purchase to begin with, will likely be deleted without even a click.

On the other hand, a sincere happy birthday that greets the person by name and offers them a 50% off discount this one time as your way of celebrating their birthday will most likely move the needle. 

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3. Create urgency

In each of the Happy Birthday examples above, the discounts were limited to the birthday. This serves two purposes. First, it keeps you from being surprised in 6 months when things may have changed and all of a sudden you’ve got to sell something at a 50% discount. Second – and most importantly, it tells the person receiving the coupon that the matter is urgent. It may only be urgent for a moment or two as they make the buy/no buy decision but it will be urgent when you want it to be, when the offer is fresh in the mind of the customer.

Limiting your coupons to a given timeframe is a good way to limit them. Another way is to limit the number of times a coupon can be used. This is the digital version of “The next 100 callers get…” that you see on TV ads running late a night. 

An example of this would be the following:

Send out an email to your existing customer base about a new T-Shirt design that you’ve released. In the email tell customers that the first 100 buyers that purchase the new t-shirt  and use this coupon also get a coffee mug with the same design.

That creates urgency above and beyond a date. With a date they know they have until the end of that date to claim their discount. With a limited use coupon they don’t know how many people have purchased before them so they need to purchase quickly if they want to take advantage of the offer.

Urgency is used to change the behavior of fence sitting. Those people that get an offer and leave it in their inbox because they aren’t sure if they want to purchase yet. Losing the discount will cause them to make the decision, even if the decision is no.

How To Create Coupon Codes For An Online Store

Now that you know the key 3 tips to create a successful coupon code for your online store, it is time to implement it on your site! Sounds difficult? Not at all! Check the video below to find the steps to easily set it up in WooCommerce, plus further examples on how to use them correctly: 

5 Innovative And Effective Ways to Use Digital Coupons For Your Ecommerce

There are as many different ways to use coupons as there are coupons themselves. We’ve delved deep into a couple of ideas in this article but let’s close out with a few more ideas that I’ll leave for you to explore on your own.

1. Add coupons to your mailing list landing page

Everybody knows you need a lead magnet to get people to sign up for your mailing list. Coupons are a great lead magnet. Not only do they encourage the behavior of signing up for your mailing list but they also encourage a new customer to make a purchase. Macy’s online shop is a good example:

digital coupon code in a mail list subscribe form

2. Create single-use coupons

In addition to celebrating life events with a single use coupon you can find many other uses. For example, if your product requires regular replenishment, such as coffee, offer a one-time discount of 30% off if the customer purchases the first replenishment when they purchase the product.

digital coupon code marketing strategy

3. Run social ads offering coupons to audiences that frequent or follow your competitors

Whatever your favourite social platform is, run an ad on it offering new customers an incentive to try your product. Instead of targeting everyone, target people who are currently following your competition. Most social platforms have “Look alike” audience features. Take advantage of that. Try changing their behavior of buying your competitor’s product into buying yours

For example, if you run an online store of items for weddings, you can target people following other wedding online stores accounts to show them interesting discounts such as the following one:

digital coupon code marketing strategy in social media

4. Create coupons just for influencers to hand out

Influencers get to be influencers by building big and/or niche audiences. They build these audiences by posting things that people want. One of the things you can do to help create an influencer is to give them a special coupon just for them to hand out. The bonuses to this tactic are:

  • You now have an influencer that owes you a favor
  • You can specifically track how many sales they sent to you to help determine how big of an influencer they are.
online coupon marketing strategy with influencers

5. Create different coupon codes for different distribution channels

There is no rule that says you have to use the same coupon code for every channel. If you want to see which ones pull best for you, distribute different code to different channels.

For instance, distribute the coupon code I_LOVE_BRAND_X_WINE to your Facebook followers and BRAND_X_WINE_IS_THE_BEST to your Twitter followers. Each of them gets the customer 10% off but you get a better understanding of which channels work best for you.

online coupon marketing strategy in social media

Wrap Up

Coupons excite customers and potential customers. Everyone loves a bargain. However, their true purpose is to influence behavior. Before you issue a digital coupon make sure you understand what behavior you are trying to influence. Once you do, craft your offer and your message around changing that behavior.

Indiscriminate use of coupons as a way of boosting sales numbers is a quick way to train your customers to simply wait for the coupon. That’s not a behavior you want to encourage in your customers.

Use coupons often, use them creatively, and use them effectively. They will help you move the needle both in the short term and the long term.

Now, coupons are just part of your whole eCommerce marketing strategy. If you want to dive deeper in how to start or enhance your online store, download our free guide on How to Start Selling Online, where you will get a comprehensive PDF and educational videos that will help you through the whole process of creating your online store using WooCommerce and tips to successfully run your online business. Download it to get expert guidance and make sure you don’t miss a thing to achieve success!

How To Start Selling Online Free Guide
author avatar
Cal Evans

PHP Evangelist

One of the most admired people in the PHP community, who has dedicated more than 16 years to building the amazing PHP community and mentoring the next generation of developers. We are extremely honored that he is a very special friend of SiteGround too.

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