Coupon Marketing: What It Is and How to Use It for Your Ecommerce Store

Coupon Marketing: What It Is and How to Use It for Your Ecommerce Store
Ivan Kreimer
Ivan Kreimer Jul 29, 2021 — 9 min read

As an ecommerce marketer, there’s one truth you have to remember: consumers love coupons.

No matter what customer segment your business targets and how luxurious the products you sell, consumers can’t resist the opportunity to pay less for a product they want to buy.

With a coupon marketing strategy, you can increase your sales while fostering brand loyalty, among many other benefits.

In this article, we are going to take a look at the different types of coupons you can use, how to create one, and how to promote them in your online store.


Why coupon marketing is such a big trend right now

Coupon marketing is a strategic approach that uses time-sensitive discounts to acquire new customers at scale.

Companies have been using coupons since Coca-Cola’s first marketer, a man called Frank Mason Robinson, decided to give away tickets for free tastes of Coke back in 1888. The coupons marketing campaign paved the way to becoming the leading cola manufacturer in the US in the early 20th century.

The original coupon was first introduced by Coca-Cola in 1888

With the proliferation of online stores, coupons are equally popular like they were 140 years ago as they allow brands to:

  • Lower the barriers to purchase for new customers
  • Introduce new products and get rid of old inventory
  • Generate more sales (even when that means lowering the net profit margins in the short term)
  • Encourage brand loyalty for existing customers

Coupons also boost consumer purchase habits, as a recent study by Blippr found that online shoppers who use coupon codes spend 24% more than shoppers who don’t use them.

What's more, retailers experience 26% higher average order values from customers who use coupons than those who don't.

In the following section, we’ll take a look at the exact steps you need to take to start using coupons in your marketing strategy.

How to create a coupon

Step 1: Define the type of coupon to use

Coupons come in different shapes and forms. Even though they all share the same mechanic, the minor differences between each coupon type can affect how consumers perceive them and behave afterward.

Percentage

The most common coupon is a percentage reduction on a product’s original price. Blippr’s study found that 74% of online shoppers like “percentage off” coupons, making it the most popular coupon type.

Voucher

Another popular option is to offer a discount equivalent to a certain dollar amount, popularly known as “vouchers.”

Vouchers are another example of coupon marketing

Buy one, get one free (also known as “two for the price of one”). This coupon works more like a deal than a discount, even when the economics behind it are identical to a percentage-based or voucher coupon.

BOGO is a common tactic used within coupon marketing strategy

Free shipping

This coupon type lowers the shipping costs of a purchase, which represents the main reason why consumers abandon their online carts. Although this example may not look like a traditional coupon, it works equally well.

As an ecommerce store, you can use coupons for free shipping as well

If you don’t offer any type of coupon already, we recommend you start with a percentage-based one as it's the most popular and simplest to use. You can test any of the other coupon types to see which one converts the best and drives the highest AOV.

Step 2: Define the discount size

Coupons can be a great addition to your marketing strategy, but you must analyze how they affect your finances before you can use them. A poorly-planned coupon strategy can end up causing unnecessary losses your small business can't afford.

To define your coupon’s discount size, you should think about your profit margins and overall marketing strategy.

Some retailers make no profit in the first sale — or even lose money — and regain the initially lost money through “the back end,” which includes:

  • Email automation campaigns
  • Loyalty programs
  • Upselling

However, you need to set up all of these systems and make them work before you can execute an aggressive coupon marketing strategy.

💡 If you lack the resources to take such a long-term approach, it’s best to calculate your coupon discount by taking your average profit margin — say 30% — and setting your discount to a smaller amount — say 20%. The same idea applies if you use vouchers or any of the other coupon types.

Step 3: Create the discount code

Before you create your coupon, you need to set up a discount code on your ecommerce platform (this is the code you will promote in your coupons once you create them later on).

Here's a list of the guidelines for each major ecommerce platform:

Give your discount code a short and obvious name. For example, a 10% discount should be called “10OFF” and one for new visitors “WELCOME.”

It’s also a good idea to create different discount codes for different segments, such as:

  • New customers
  • Recent customers
  • Inactive customers
  • High-volume, high-profit customers
  • Seasonal buyers

In the final step, you will see how to promote each discount code for each segment with greater detail. For the time being, select the target audience you want to show the discount and create the codes accordingly.

Step 4: Time your coupons

The effectiveness of your coupon strategy will depend on its timing. Ideally, you want to present your coupons when your visitor is pondering about making a purchase. As a consequence, you need to consider:

  • The pages where you present your discounts: Showing a coupon on a product page will target higher-intent visitors than those on the homepage.

  • The time on site & number of pages per session: A visitor who has spent more than the average time on site and who has visited more than the average number of pages per session is more likely to convert than one who has spent a few seconds and visited one page. You can use time-delayed coupons to cover this factor.

  • User behaviors: A visitor who has added a product to the cart but is about to leave is on the brink of purchasing; however, something stopped them from doing so. An exit-intent coupon may help them finish their purchase.

  • Purchase history: Past customers are more likely to act on a coupon because they are familiar with your brand.

  • Season: You can run more aggressive coupon marketing campaigns closer to holidays such as Valentine’s Day, Father and Mother’s Day, Thanksgiving, and Christmas.

You must factor in all of these aspects when creating your discounts. A poorly-timed coupon may devalue your brand and lower your profits for no good reason, so make sure to show your coupons at the right time and place.

In the next step, you will see how you can promote your coupons and what tools you can use.

Step 5: Promote your coupon

Popups

Considering everything we said about timing, popups are an ideal method to present your coupons. Popups tools such as Getsitecontrol allow you to use highly specific targeting rules to offer your coupons to the right segments using proven high-converting designs.

Popups often get a bad rep due to the fact they interrupt the visitor’s experience. Although there’s some truth to this point, popups can work great if you make them relevant for the visitor and use them sparingly.

On the one hand, you want to promote your latest products, offers, or seasonal discounts. Using behavioral-based triggers and the other factors we discussed in the previous step, your visitors will see that the popups appear for a good reason.

💡 If you want to promote coupons in your store while maintaining great shopping experience, make sure to present one popup per session — that means your visitors will see one popup per visit, not once every time they visit a new page.

Sticky bars work like popups, but instead of showing up by surprise, they “stick” to the top or bottom of a page. For this reason, sticky bars are a less intrusive alternative to popups that can work equally well.

You can add a sticky bar to your store using the same triggers as popups. Ultimately, sticky bars should complement popups, not repeat the same message.

For example, you can offer a 10% discount through a popup, and remind the visitor about it with a sticky bar that says, “Don’t forget to use the code “10OFF” in the checkout to receive a 10% off on your first purchase.”

Email list building

So far, we’ve shown two coupon promotional methods where the visitor isn't expected to do anything but using the discount during their checkout. Sadly, the majority of the visitors won’t get to that point right away.

To get your visitors ready to buy, your brand needs to build trust with them over a long time — how long depends on your industry, products, and marketing efforts. For that reason, you want to promote your coupons using popups or sticky bars with the intention of getting an email address and building your email list.

One particularly effective way to create an opt-in popup form that converts is by leveraging exit-intent technology 👇

With this technology, you can target those visitors who aren’t ready to buy but like your brand. Then, you can create an automated email marketing campaign that nurtures them until they make a purchase.

Email campaigns

Email is one of the most popular channels marketers use to promote their coupons. Blippr’s study found that 88% of consumers like to receive coupons through email, while 56% indicated email was their favorite platform to get coupons.

A common and simple way to send coupons to your email list is through an “email blast”, which is a fancy way of calling an email that’s not part of an automated email campaign. Online retailers usually use email blasts to promote their latest discounts and promotions.

Legion relies heavily on email in their coupon marketing strategy

You can also add a coupon along with a sophisticated email automation campaign that mixes educational content — such as a tutorial — with branded content — such as a story that explains the founding of the company, just like Uncommon Goods do.

Uncommon goods have included coupon marketing in their automated email campaigns

Another option is to send a coupon in a cart abandonment campaign to recover lost sales. Such a campaign will target small groups of people, but those who open and take advantage of the discount will convert, leading to highly profitable results.

Social media

Social media is another channel consumers love to use to communicate with brands and receive coupons. Blippr’s study found that 76% of consumers follow brands on social media to find coupons. 77% of online shoppers follow their favorite brands on their social media channels to stay updated on upcoming sales and discounts.

In the example below, Zappos do just that 👇

Zappos use coupon marketing to convert their social media followers

You can promote your coupons on every major social network, both using text-based copy and images. However, you will see much better results by running a paid campaign.

Facebook currently offers highly advanced targeting options that allow you to target people who already follow your brand and who have visited your store (that includes Instagram).

For example, you could create a custom audience that targets people who have visited your store in the last seven days, saw a specific discounted product, and message them directly.

Conclusion

A coupon marketing strategy is a no-brainer for any ecommerce brand looking to acquire more customers while building stronger relationships with its existing ones.

As we explained, you must consider the way coupons affect your finances and how their timing can increase their effectiveness. We urge you to try as many of the promotional tactics shown to find the one that’s most effective for your goals. Your visitors will love your coupons, and your business won't be the same afterward.

Ivan Kreimer is a freelance content writer for hire who creates educational content for SaaS businesses like Leadfeeder and Campaign Monitor. In his pastime, he likes to help people become freelance writers. Besides writing for smart people who read sites like Getsitecontrol, Ivan has also written in sites like Entrepreneur, MarketingProfs, TheNextWeb, and many other influential websites.

You're reading Getsitecontrol blog where marketing experts share proven tactics to grow your online business. This article is a part of Ecommerce marketing section.

Main illustration by Icons8

Get the print version

Download a PDF version of our blog post for easier offline reading and sharing with coworkers.

Download PDF

Expert advice

You're reading Getsitecontrol blog where marketing experts share proven tactics to grow your online business. This article is a part of Ecommerce marketing section.

Subscribe to get updates

Get beginner-friendly tips for growing your online business.

Join the list →