You've run a coupon campaign and now you're wondering: How successful was it? Check out this post for some ways to gauge how well it did.

coupon campaign, coupon metrics, coupon effectiveness, coupon campaign success

I'll never forget the last day of my final Marketing class. Everyone dreaded that course because it was flat-out hard, mostly because we actually had to do math. For our final project we were asked to provide a short-term and long-term marketing plan for a local business. One of our peer groups was assigned to work with a local taco shop. To increase sales for their newest location, the group's solution was to run an aggressive coupon campaign. It was a really great idea and we were all impressed with its execution.

The moment of reckoning arrived when the professor asked, "What is the return on investment (ROI) of the campaign if redemption rates are 15%?" All of us cringed and gave apologetic faces as we looked at the group of students staring back at us like deer in headlights. They were stumped.

Don't let this happen to you in your next meeting or when you're running the numbers at home - hang tight as we go through the basic steps to measure the effectiveness of your coupon campaign.

We'll start with how to calculate ROI, courtesy of (great resource):

1. Figure out the overall cost of the coupon campaign, including distribution costs and any promotional costs. Fortunately for online sales, this is a lot lower than retail stores. For our taco example, let's say the overall cost of the campaign was $500.

2. Next, figure out how much money you earned for each product (margin). You do this by subtracting the overall cost of the product from what you charge for it. So let's say the company pays $3 to make each taco. After the coupon, the price to customers is $5 per taco (that's one expensive taco, in case you're wondering). Thus, the margin of each taco is $2.

3. Then, figure out how many products you need to sell to cover the costs of your campaign (the breakeven point). You do this by dividing the overall cost of the campaign by the per product margin. In our example, $500 / $2 = 250 tacos to break even.

4. Finally, see how many products you sold and how that compares to your breakeven point. After the well-executed coupon campaign, our taco heroes sold 450 tacos - pretty successful from an ROI perspective. But if they only sold 200 tacos, the coupon campaign wasn't very effective in regards to ROI.

Of course, there's a lot more to measuring a campaign than ROI. Even if you didn't achieve as much as you wanted from that specific metric, there are other success points. I also recommend measuring: 1) fluctuations of site traffic during the promotion, 2) the number of email addresses you received, and 3) how many first-time customers purchased from your site. Also, is there any new buzz about your product or website in the blogosphere or on social media sites?

And please, please take the lessons of your previous coupon efforts and apply them in the future. Just because your first attempt didn't work out perfectly doesn't mean you should give up altogether. Do some research into what your competitors are doing and what your customers want. Then, match it up with what you know from your past experience with coupon campaigns and keep going. You'll only get better with practice.

Stay tuned! Next week we'll begin our week-long series on customer loyalty. For now, I'm headed out for a bacon and egg breakfast taco (extra cheese, of course).

  • Matt Winn, Marketing Associate

Do you have any questions about measuring coupon effectiveness? Any experiences in running a coupon campaign, good or bad? Share with us so we can learn together!