Menu
Support
Free Trial

Build Your Online Coupon Strategy

by Kathleen Booth, on Dec 23, 2020 9:00:00 AM

Couponing has a long, reliable track record of helping ecommerce merchants increase sales, with as many as 60% of online shoppers looking for digital coupons to save money at a site they haven’t purchased from before. 

Large, online digital coupon brokers like Groupon.com and Retailmenot.com have a dominant presence in the coupon ecosystem, but individual e-commerce merchants can benefit from online bargain hunters by proactively putting in place a coupon strategy.

-- Article Continues Below --

ecommerce resource center

Read Now: The Complete Ecommerce Resource Center

Coupon Strategies That Work

As many as half of U.S. adults regularly use digital coupons.

According to eMarketer:

  • 87% of people complete a purchase after a discount offer
  • 62% of people complete a purchase in exchange for points in a loyalty program

There are potentials and pitfalls to activating a digital coupon strategy for your e-commerce website.

By 2022, digital coupon redemptions could exceed $91B. Chatbots, invisible payments and QR codes are all in the mix, presenting a massive opportunity for ecommerce merchants to capture increased sales through the strategic use of coupon codes. 

To activate a high-profit strategy for online coupons, you need to choose the right coupon type and use the right marketing approach. 

When you build an effective couponing strategy you can:

  • Increase profit margins
  • Create net-new customers
  • Attract long-term customers
  • Increase number of customer accounts or social media followers
  • Promote specific products
  • Offload excess inventory

There is some risk amidst all this potential.

When coupons fall into the wrong hands and are used by buyers for whom they are not intended, they can negatively impact profit margins for ecommerce merchants.

Many merchants fall into the trap of overusing coupons to attract customers. Some overuse to the point of training their customers to wait for coupons before making their next purchase. 

When it comes to couponing, a solid strategy is key to measurable gains. Keep reading for more on the types of ecommerce coupons, how to use coupons to your advantage, how to market coupons, and common couponing mistakes.


Read The Ultimate Guide to Ecommerce Marketing

Discover a solution built to help you block the negative effect coupon extensions have on your bottom line.

Read Now


Types of Ecommerce Coupons

When it comes to developing a coupon strategy, the first step is to understand the different types of digital coupons.

Not every kind of coupon is right for every business. For example, a mobile-only coupon may work for some brands, but isn’t ideal for businesses with no app. 

These are the kinds of questions to think about as you explore the different types of e-commerce coupons.

Here are some of the most common types of digital savings options:

  • Mobile-only: Mobile coupons can only be used on an app that is integrated with an ecommerce website, and are meant to incentivize customers to download the app and create an account.
  • Promo code: A promo code is a series of numbers and/or letters that buyers can type into a specified field at checkout. Promo or coupon codes may be easily accessible on a website, social media account or mobile app, or they could also be more exclusive. For example, a merchant might offer a unique code to anyone who subscribes to their mailing list as a way of encouraging buyers to sign up for an account.
  • Instant: This kind of coupon is automatically applied to a customer’s order at checkout so customers do not have to find or enter the coupon. This is one of the most popular kinds of discounts because it requires no sign-ups. While it may seem contradictory to capture no buyer information, instant coupons actually reduce shopping cart abandonment and therefore increase sales. 
  • Free item/shipping with purchase: This kind of coupon grants buyers a free gift or shipping with a minimum purchase amount. For example, a make-up supplier may offer a free make-up bag to customers who purchase $50 or more of merchandise. This is a great way to get rid of inexpensive, excess inventory and to encourage buyers to spend more. 
  • Buy one get one: BOGOs are a great way to get rid of seasonal or additional inventory that may be taking up needed storage space. There are a variety of ways to offer a BOGO: buy two get one, buy one get one half off, buy three get two, etc. 

Each of these digital savings options has its own advantages, and when used as part of a holistic marketing strategy, can increase ecommerce revenue. 


Protect Your Ecommerce Margins

Increase average order value by blocking discount codes from coupon extensions like Honey, CapitalOne Shopping, Piggy, and more.

Learn More


Using Coupons to a Company’s Advantage 

Restrictions are one of the best ways for ecommerce merchants to limit the amount of money they lose when implementing a coupon strategy. 

Here are some of the ways ecommerce merchants apply coupon restrictions to avoid profit loss:

  • Time limit: “Purchases made within the next 30 minutes will receive 15% off!”
  • Minimum spending amount: “Purchases of $100 or more will receive $20 off!”
  • Exclusive access: “Today, our account holders will receive a 20% discount on all purchases!”
  • Surveys: “Complete a 5-minute survey for 5% off your purchase.”
  • Rewards systems: “Earn 100 points and receive one free order under $10!”

When you put coupon restrictions in place, you can limit the amount that buyers save while creating a sense of urgency that encourages buyers to spend now.

Placing these kinds restrictions on coupons encourages shoppers to do things like:

  • Spend more
  • Provide feedback
  • Create an account
  • Buy a subscription
  • Join the mailing list
  • Become long-term customers
  • Increase customer loyalty

Whether you are trying to get rid of inventory or capture buyer information, coupons can be an effective way to stimulate the desired buyer behavior.

In short, customers at every point in your sales funnel can be incentivized with the right offer.

How to Market Coupon Offerings

A great offer is only worthwhile if it reaches the buyers for whom it is intended. 

Many ecommerce merchants choose one of these popular avenues for sharing digital coupons:

  • Social media: If you are looking to get the widest possible exposure, social media (Facebook, Instagram, Twitter) is the place to advertise great deals. Within your post, ask for shares to increase direct and indirect views. Utilizing appropriate hashtags related to digital savings may also reach couponing groups with large audiences.
  • Email/Text message: This is the best way to reach existing customers who have either created an account or signed up for your mailing or texting list, and is a good way to share exclusive deals. 
  • Influencer Partnerships: Influencer marketing has gained popularity in recent years and can be an effective way to reach a highly targeted, and highly loyal, audience. Many ecommerce merchants provide influencer partners with unique coupon codes or affiliate links to share with their followers as a way of tracking the effectiveness of the partnership.
  • Paid Ads: Paid online ads allow ecommerce merchants to use an endless number of targeting variables to get their coupon codes in front of the right audiences. 

One of the most important things to consider when marketing digital coupons is to be as creative as possible. Whether you are creating attractive graphics or asking consumers to share how they are using your products, find ways to draw an audience that will convert.

Couponing Mistakes

The biggest mistake that ecommerce merchants make when implementing coupon strategies is overusing coupons.

Think about it this way: what kinds of ecommerce brands are typically associated with big savings? Are they known for high quality products?

When you think of it this way, it’s easy to see how overusing coupons can diminish a brand’s perceived value.

Here are some other pitfalls of using coupons and discount codes:

  • Offering frequent coupons for items that are consistently selling at market value. When digital savings are too frequent, you may be grooming customers to wait for a lower price.
  • Implementing complex discounts that are difficult to understand. Here’s an example of this: “Purchase two t-shirts and three pairs of socks for 5% off of a pair of jeans or a hat.” Keep your savings simple enough that buyers can easily understand how to use them. 
  • Not paying attention to your profit margins when implementing coupons. This one should seem pretty obvious, but do the math when it comes to discounts to make sure you aren’t breaking even or losing profits.
  • Making exclusive discounts available to everyone. Remember, coupons serve as powerful incentives for specific buyer behaviors. Whether you want buyers to create accounts or purchase subscriptions, make sure your coupons are tied to specific actions. 
  • Discouraging brand loyalty by not offering rewards programs. Bargain hunters aren't always the most loyal shoppers, and when they're not accompanied by rewards programs, coupon strategies can sometimes attract one time buyers. Get them to stick around by enrolling them in your rewards program.

The key takeaway to implementing a good digital savings strategy is to use coupons only when you need to, such as when trying to get rid of old inventory, promote new products or some other short-term situation. .

How Coupon Extensions Can Erode Your Online Coupon Strategy

When used correctly, digital coupons can be effective tools for increasing ecommerce revenue, reaching new customers and increasing account or subscriber numbers. But as beneficial as coupons can be for an ecommerce business, there are also many ways that they can result in decreased profits. 

Because of this, some ecommerce merchants choose to block external coupon plug-ins altogether in order to prevent unauthorized coupon use while protecting site health and user experience (UX).

Coupon extensions such as Honey, Capital One Shopping (formerly Wikibuy) and Piggy can jeopardize your revenue by eliminating the controls you've built so carefully around your coupons and making all of your limited use coupons available to anyone, at any time.

If you want to block coupon extensions on your website, give cleanCART a try.

Sign up to be amongst the first invited to our beta launch. When using cleanCART, customers with coupon extensions will have the same shopping experience as they always would, their coupon extensions will just come up with no savings to offer, protecting you from rampant unauthorized coupon use.

New call-to-action

Topics:ecommerce

Our blog

Where businesses come to learn more about protecting the points of digital engagement with their customers, audiences and users.

Subscribe to Updates