Coupons 101 – Offering Discounts Without Discounting Your Business

Let’s take a deeper look into the realities of utilizing coupons and discounts in your online store. Check out this post to get started with Coupons 101.

coupons, coupon best practices, coupon basics, Volusion, ecommerce, selling online

Everyone likes to save a buck when shopping online. So let’s be just honest with ourselves. No matter how wonderful your product is, customers are going to feel better about the purchase when they catch a deal. Think about it – would you feel better buying an identical flat-screen TV for $700 or for $600? Pretty straightforward. Whether we like it or not, coupons have hit the online world like the Big Bang. If you’re not offering coupons, your competitors probably are.

But how does one straddle the fine line between providing a high-value offering without becoming a discount warehouse? It’s called a coupon strategy. Let’s quickly remind ourselves of what a strategy is: a plan of action used to accomplish a specific goal. This means the first step of your coupon campaign is to define the goal of the effort. Some possibilities include: increasing site traffic, increasing awareness of your business, highlighting a particular product, product testing and gauging customer behaviors. (Note: if your goal is simply to “increase sales,” dig a little deeper to determine a more specific goal. This makes things easier to measure.)

The next phase is to determine the scope and hammer down the details of your campaign. Do you want to offer coupon codes only for specific products, or across your entire line? How much is the discount for? Percent off or dollar off? Is the coupon available to everyone or only specific clients? Is it for one-time use? What is the coupon code going to be? And most importantly, make sure you run the numbers before starting: is the coupon compelling enough to be effective without damaging the bottom line?

Once those decisions are made, the next thing is distributing the coupon for use. There are a number of options out there, including email/newsletters, inclusion on your social media sites, posting the code on your storefront, etc. The best way to make this decision is to ask yourself, “How do my customers want to receive this information?” One word of caution: be aware that your coupon can be sent across the internet in a matter of seconds.

And finally, don’t forget to measure the results of your efforts! Too often we deploy campaigns and never see the true impact of them. Each marketing effort is a learning experience so be sure to analyze the impact of the campaign and carry best practices into the future. One major lesson is the shopping behavior of customers that used the coupon. How does this compare with their previous and future purchases?

Here are a few tidbits to help maximize the results of your couponing:

  • Make sure the coupon code is relevant to the promotion and your business, keeping it easy to remember
  • Put an expiration date on your coupon code and make sure you relay that date to your customers
  • Think through all the possible implications of the coupon – can it be misconstrued or abused? In other words, ensure all your bases are covered legally so you’re not taken advantage of.

Also think about the long-term effects of your coupon strategy. It’s important to balance the frequency of your coupon offering so customers aren’t only looking at you for discounts. Despite the current state of consumers and their pricing pains, there is still much to be said about branding and establishing relationships with customers.

What lessons have you learned from previous coupon efforts – is there any advice you can provide to others? Or, do you have any questions for discussion? Let us know and we’ll continue the coupon conversation!

10 Responses to “Coupons 101 – Offering Discounts Without Discounting Your Business”

  1. Judy from Remedies for anxiety

    Thanks for the great articel. Is something I have been wondering about for a while now…

    I have a couple of other sites/businesses that I wanted to use a coupon system with. Do you or can you recommend any software we can use to generate codes and how to get something on a site perhaps?

    Thanks much!
    – Judy

  2. Toner Cartridge Guy

    What frequency is too frequent for coupons? If we sell printer supplies, a typical business needs supplies once a month, therefore should we send a coupon less frequently than that?

    Or would it be better to segment our customers based on last purchase date… if they haven’t purchased in the last 60 days, send a coupon?

    • Matt

      Great question. In this case, I would recommend segmenting your list to reflect your customers’ buying cycle. If you’re offering a new line of supplies, it’s might be worth offering the discount to everyone if it doesn’t eat too far into your margins. But if you’re targeting someone with a more specific discount, segmentation all the way.

      One question to ask though: if someone requires new supplies every 60 days, would they purchase from you without the coupon? Definitely something to think about!


  3. Residential Garage Doors

    Residential Garage Doors…

    Thank you soo much for describing in such detail about Coupons. Its refreshing to see people actually can write articles that make sense and not computer generated. The Best way to contact me is by email. I check it everyday. thanks again!…

  4. Aaron

    Any thoughts behind the psychology of the discount percentage, e.g. 5% versus 20%? Clearly, the larger the the percentage the more appealing but is anything less than x% considered an insult or not enough to drive buying behavior?

    • Matt

      Great question. It really depends on the price of your products. If you’re selling a $10,000 diamond ring, then 5% is a fairly sizeable amount. You’re absolutely right about the larger percentage equaling larger appeal. The main thing is to ensure that you balance the cost of the coupon with your ROI. While a big coupon may be wildly successful, it can hurt your bottom line.

      Personally, I don’t get excited about anything less than 10% off, but that’s just me.

  5. Matt

    Great point, duane – good way to cover your bases. Has this happened to you before?

  6. duane

    Remember to also let the customer know if the coupon can or cannot be used with any other offer, and that it does not apply to previous orders already placed. Man, folks always want to apply a coupon to an order placed previously.

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