Coupon examples in retail
There are specific psychological triggers that draw customers to certain types of promotions and encourage them to buy.
Research shows that when shoppers find a good offer, it actually leads to feel excited and happy, and they have increased levels of the “feel good” hormone known as oxytocin.
These are some of the important questions about coupons & personalization that you’ll answer in this article:
- How to improve retail results with coupons?
- How to personalize coupons?
- How to use segmentation in coupon marketing?
- How to use gamification techniques in coupon marketing?
- How to use anchoring in coupon marketing?
- How to use copywriting in your coupon marketing?
- How long should the discount last in coupon marketing?
- How to avoid backlash in coupon marketing?
- How to use coupons as part of a loyalty program?
- How do retailers distribute coupons?
On top of making people feel good, discounts give consumers agency. Buyers will continue to seek out deals to keep those good feelings flowing. And this may motivate them to pull the trigger and convert, even if they were previously on the fence about purchasing.
Using coupons, retailers can encourage customers to:
- Add specific items to their cart including excess inventory, higher-margin products or out-of-season goods
- Discover new, related products to complement product launches
- Spend above a specified minimum order total
- Reduce cart abandonment
- Boost overall revenue
- and more!
Before an enterprise retailer deploys a coupon marketing strategy, he or she should for determine what he wants to accomplish.
Let’s dive into examples of how coupons help retailers with their sales and revenue goals:
1. Coupons to boost customer acquisition
Whether a retailer wants to enter new markets and offer an incentive for first purchases or give a referral discount, coupon campaigns are a fantastic way to bring in new customers.
2. Coupons to boost sales of a specific product
Some products or services are seasonal or their sales drop slightly in specific seasons. Retailers can improve sales in those times by using discount coupons. A good example is fashion retailers that want to move their inventory with high converting personalized coupons before entering the sales season.
Some products close to expiry or slow-moving. With coupons, retailers can grow sales and get rid of stock with a discount voucher or a bundle offer.
3. Coupons to increase the basket value
Retailers can motivate shoppers to add more items to their basket to get the desired discount or free shipping. The best way to do it is to display how much is missing to a specific deal straight in the basket.
4. Coupons to re-engage lapsing customers
Retailers can activate your lapsing or lapsed customers by sending them a limited-time offer containing a discount voucher.
5. Coupons to collect customer data or marketing consent
43% of shoppers are willing to share personal data with brands in order to save money. Retailers can offer coupons incentivize customers to subscribe to their newsletter, join their loyalty program, create and complete a profile, cookie consent and more. A very popular coupon strategy is to offer a discount for the first purchase after a newsletter subscription.
6. Coupons for customer service complaints
When a retailer faces a complaint, he can recover the trust and loyalty from his customer with a “sorry coupon” that shows his appreciation for the customer.
7. Coupons to get customer feedback
Retailers can use coupons to encourage customers to take part in a short survey about their brand. Finding out more about their preferences, needs and pain points has enormous value to a retailer.
8. Coupons to get customer reviews
By giving vouchers, you can also incentivize user-generated content or reviews.
9. Coupons to decrease cart abandonment
Coupon marketing can be a tool to decrease online cart abandonment. Retailers can send emails, sms, ads or push notifications when the customer abandons their basket, offering a special offer if they complete their purchase within a specific time limit.
10. Coupons to encourage customers to download your app
Retailers can motivate customers to download their app by offering app-only coupon discounts or a special voucher.
How to personalize coupons?
It’s not enough to give customers promotions and discounts — consumers expect deals and offers to be personalised and give them more of what they want from a retail business.
According to online coupon statistics, 53% of consumers want coupon deals tailored to their shopping habits.(Source: Inmar)
Examples of personalized coupons include birthday discounts, “anniversary discounts” from the first time they made a purchase with a brand or promotions based on how long it’s been since the last time they made a purchase can all be effective ways to reach out and connect.
The goal of personalisation is to make the customer feel like the brand or retailer is offering them something exclusive — something specially for them. If customers feel valued, they will be more likely to respond.
Loyal Guru’s offer personalization module allows retailers to create millions of single-use promo codes at scale. This allows retailers to even tailor the level of discount or type of promotion to match individual shoppers’ past purchases, interest or behavior.
How to use segmentation in coupon marketing?
Retailers today have technology available to segment their offers with incredible level of granularity.
They should find the factor that differentiates their customer preferences and shopping behaviors that can be easily identified in their CDP and segment their coupons based on those factors.
Some segmentation examples include:
- Segments based on the age of customers
- Segments based on the family situation – for example, married, not married, with or without children, the age of the children, or pets in the household.
- Work occupation-based segments – for example, employed, self-employed, on maternity leave, on unemployment, industry sector they are working in, or position.
- Location-based segments – for example, based on a postal code, city, state, or exact geolocation.
- Segments based on the revenue per customer – for example revenue per month, revenue per year.
- Customers divided according to their activity – for example, the number of orders, the amount already spent.
- Segments based on favorite categories.
For example, a fashion retailer can create a 20% off coupon voucher for children clothing only for those customers who are based in France, between 25 and 40 years old, who have purchased at least once from their company and who have children or have purchased any clothes from children category before. This level of personalization is only possible with a powerful and retail specific customer data platform with coupon automation capabilities like Loyal Guru.
How to use gamification techniques in coupon marketing?
There are lots of fun ways in which retailers can incorporate gamification into their coupon marketing strategy, such as:
- Mystery prize. These are discounts of unknown quantity rewarded to customers for completing certain actions like clicking through on an email link. It’s always a good idea to use the term “Mystery Prize” in a prominent place (such as the subject line) and to provide defined parameters for the kind of discounts that users can expect.
- First to claim. Diminishing discounts also lend themselves very well to gamification. For example, one could send out an email saying that the first 10 customers to click-through on the link will receive a 30% discount. The next 10 will receive 20%, the next 10 will receive 10% and the next 10 will receive 5%. This is a great way to motivate buyer behaviour through gamification.
- Collect and save. For example, retailers can select 5 items from their inventory that share a common theme. Then they can send an email to customers to let them know that if they collect all 5, they could earn a voucher for their next purchase.
How to use anchoring in coupon marketing?
The price a shoppers sees first becomes an anchor he or she will use to measure all upcoming prices against. To make a discount look significant, retailers should show the original price first, then show the sales price.
How to use copywriting in your coupon marketing?
The wording has a lot of impact on how people perceive a retailer’s discounts. Retailers should test which kind of wording works best for each of the coupon promotions. These are a few examples:
- “Get $ off” emphasizes achieving a gain, while “Save $” emphasizes avoiding a loss.
- Dollar-off vs percentage discount. According to research a percentage discount is more appealing to consumers for items under $100. So 10% off a $50 sweater sounds better to buyers than giving them $5 off, even if they’re the same discount. On the other hand a dollar-off discount works better for items priced over $100. On a $1,000 computer, people were more likely to buy when they received $200 off versus a 20% discount, despite the deal being the same.
How long should the discount last in coupon marketing?
Retailers should think about how long they want the discount to last. Obviously, if the duration of the discount is long, retailers risk counteracting the urgency principle.
Retailers need to communicate the deadline clearly to potential customers for it to influence their decision.
Loyal Guru’s personalized offer module allows retailers to set individual expiry dates to each coupon and send out coupon reminders when expiry date is close and the coupon has still not been redeemed.
How to avoid backlash in coupon marketing?
Discounts often leave shoppers feeling ambiguous: On the one hand, the product is cheaper – great! On the other hand, the product is cheaper… Why? Is there something wrong with it? Probably! Otherwise, why would they discount it?
Retailers should give the reason behind the discount, preventing such questions.
This is also an important tip: Whether consumers can quickly and easily calculate a discount plays a big role in whether they’re motivated to take action and buy.
Here’s what the research shows:
People don’t like doing math or having to perform complex calculations. Discounts that are easy to calculate are seen as bigger. The simpler the discount, the better.
Let’s take as an example: a $15 item discounted down to $10. Shoppers can easily see that they’ll save $5. However, if the original price os $14.99 and the discounted price is $9.56, they may not be able to quickly realize they’re getting more than $5.00 off.
Retailers should not expect customers to do hard math, they should make the discount clear and simple.
How to use coupons as part of a loyalty program?
Coupons can also be used to build loyalty. Retailers can re-engage lapsing customers by sending out coupon codes and messages to incentivize new members to join the loyalty program, or send them to existing customers as a way to bring them back into their business. Discounts are a great way to build value in the minds of a retailer’s most loyal customers and they are a nice way to reward these people for their purchases.
How do retailers distribute coupons?
Based on distribution channel, coupons and vouchers can be either physical or digital:
- Postcard Coupons
- Newspaper Coupon Inserts
- Coupon Ad Flyers
- Coupons in Direct Mailers
- Print Coupon Ads attached to Products Sold In-store
- Coupons issued on printed receipts
- Social Posts
- Web Banners and pop-ups
- App notifications
- Personalized landing pages
Once a retailer has a CDP in place, full of quality data, he can connect a coupon management software to quickly and easily create personalized coupons.
Remember that personalization for millions of customers cannot be managed manually at scale. Enterprise retailers are better off investing in coupon marketing software that already supports coupon automation.
Download the Martech Cheatsheet PDF >>>
Having a specialized coupon management system will save your developers a lot of time and resources as well as cut your time-to-market, as compared to using a limited coupon software or developing a custom solution.
If you are considering whether to build or buy a coupon management system, then get in touch with our team – we’ll be happy to show you examples or talk through your brand’s unique challenges.