There’s no doubt that people like coupons and discounts. Who wants to pay full price when they could pay less? One survey found that 65% of consumers say coupons finalize their buying decisions, and 63% will change their mind about a purchase if a coupon is available.
The same study also found that 91% of buyers say they will purchase from a business again after using a coupon – even if they don’t have a coupon for the next purchase.
Most ecommerce solutions offer some way to create coupons for your customers. In WP Simple Pay, you create coupon codes in your Stripe dashboard and add the “Coupon Field” to your WP Simple Pay form. (Read our documentation for more information.)
But simply making a coupon isn’t enough. You need to be strategic with them if you want to drive maximum revenue. In this article, we’d like to go over some ways to be smart with your coupons so you create the most value for your business.
Include an Expiration Date
Every discount you give out should include an expiration date. This applies to general coupons you throw out to the web and single-use discounts you give to individual people.
Why should coupons expire? Because expirations play on your customers fear of missing out, their innate fear that they won’t get to use a resource or benefit. By putting an end date on your promotion, you push on that nerve so people feel compelled to use it before it’s unavailable.There’s no doubt that people like coupons and discounts. Who wants to pay full price when they could pay less? Click To Tweet
Of course, this only works if your expiration dates are obvious. Marketers used to bury their expiration dates in the fine print at the bottom of the coupon, but now we know that it’s a key piece of information that belongs right near the offer.
Notice how this Staples coupon puts the expiration information before the discount details to leverage their customer’s fear of missing out. Dates (like “December 14”) can feel arbitrary sometimes, so they also smartly include “22 days left” to remind the customer that time is ticking down.
Keep Your Offer Simple and Clear
When it comes to designing your offer, less is definitely more. Customers often find complex promotions confusing. Once you start introducing variations, tiers, or rules, lots of customers will…
- Fail to understand the offer.
- Suspect the complexity means you’re taking advantage of them.
- Decide that studying your offer isn’t worth their time.
Here’s a great discount offer: The first 50 people to buy the course will get 20% off.
Here’s a terrible discount offer: The first 50 people to sign up will enter a drawing for 500 in-app credits after registering the product and processing 25 transactions, or two hours of consulting time with one of our experts.
The bad offer is long and complex. Most importantly, it’s hard to understand. How much is 500 credits or two consulting hours actually worth? How long does it take to register and process 25 transactions? There are just too many variables to understand the offer’s value.
Avoid Coupon Fatigue
After a few successful discount campaigns, you might be tempted to run them all the time. This happens to a lot of businesses who have good margins and don’t mind giving up a tiny piece of each sale for a lot more sales.
But there are two reasons you shouldn’t give out coupons too often:
First, customers can grow fatigued by coupons. There’s nothing special about your offers if they happen every week. It’s like those car dealership radio commercials who constantly “order too much inventory.”
Customers will start to ignore your promotions (emails, social media posts, banner ads, etc.) if you bombard them with “special deals” that aren’t unique or rare. In fact, some retailers have been sued for running so many sales that the sale price isn’t actually a sale, which means all of their sales promotions are technically false advertising.
Furthermore, constant sales devalue your products and services. If you sell a service for $200 but offer a 20% off coupon every week, then the service isn’t really worth $200. It’s only worth $160. Customers will never buy at full price because they know they only need to wait a short time before you give them a discount.
How often should you give out coupons and discounts? That’s hard to say. It depends on your business, products, and customers. It makes sense to give out regular coupons for commodity products with lots of competition. But an enterprise software consultant, for example, should almost never discount their services.
People Want Discounts, Not Freebies
According to a coupon study by Placed, 60% of buyers prefer discounts over other types of promotional offers. Rebates, free gifts, special access, gift cards, and other inventive offers can work in some cases, but most people just want to be charged less. (Rebates came in second place, by the way, which is just a different kind of discount.)
So for best results, don’t get fancy with your coupons. Give your customers simple offers, like percentage discounts (e.g. 20% off) or flat discounts (e.g. $50 off).
The best kind of discount is free shipping. Experian reports that free shipping offers are 72% more effective than offers without it. They also generate 53.3% more revenue. If you sell physical products, you must ship for free.
Pull New Customers Into Your Brand
Coupons and discounts have value beyond the immediate sale. You can use them to bring more people into your marketing umbrella by requiring them to opt in to your email list in exchange for the coupon.
In fact, receiving coupons and discounts is the top reason people subscribe to email lists, according to a survey by Technology Advice. We’re happy to “buy” a coupon with our email address thanks to the principle of reciprocity. Coupons are more effective tools to build your email list than promising generic benefits like “monthly giveaways” or “latest products.”
The biggest advantage here is that you grow your audience even if new subscribers decide not to use the coupon. You can serve them email content over time to eventually turn them into customers.
Consider all Your Variables
If a coupon or discount doesn’t drive the revenue you hoped it would, you might be tempted to boost the discount. If 10% doesn’t excite people, maybe 20% will… Right?
That may be the case, but you don’t always have to serve up a bigger coupon. There are other variables you should consider, like the duration of the offer, its terms, or whether you promoted it to the right people. You should also consider the reason you felt the need to discount the product or service in the first place.
For example, let’s say you’re offering a coupon for a membership course that doesn’t sell, but no one used the coupon. The price of the course may be an issue, but there’s also a chance your customers don’t find it valuable or don’t need it badly enough.
The timing of your offer can be critical, as well. Instead of offering big discounts six times a year, you may have more success by offering a single discount at the right time. For example, if you know that your customer gets busy during a certain month, sending out a small coupon for your time-saving products during that month could be far more effective then a big coupon at any other time.
So before you start eroding your margins by offering bigger discounts, consider all of the other variables about your offer and the product/service itself.
Measure and Test Your Results
Our final piece of advice is the most important: Measure and test the results of your coupon and discount campaigns. Which ones do your customers respond to the best? When are they most receptive to those offers? Which channels (social, email, direct mail, etc.) are the best ways to deliver your offers?
With careful observation, you should be able to see trends over time. This will help you optimize your campaigns so you deliver targeted discounts that drive sales without over-discounting.
When used properly, coupons and discounts are powerful tools to drive revenue and grow your customer base. But in order to get the most value out of them, you need to use them strategically. If you follow the advice we’ve outlined in this article, you’ll grow sales and delight your customers.