Coupons are a tried and tested marketing strategy that worked for many businesses, right from Coca-Cola in the late 19th Century. It helps retailers to promote buying in their stores. Historically, it is a great way to sell off stock, so that new products can occupy the retail space. Customers prefer it too for the obvious reasons, and neuroeconomics studies point out that it improves happiness. eCommerce has considerably changed the way customers access coupons, as most platforms have great features to support it. WooCommerce offers basic features for setting up and managing coupons out of the box. However, if you are looking for a more extensive coupon strategy, you can always try out some of the extensions. This article looks into the advantages that coupons offer to eCommerce store owners. You will also find some tips on efficient WooCommerce coupon management.
Advantages for store owners
Coupons offer some apparent advantages to store owners in areas such as inventory management and conversions. Let’s look into some of them in more detail.
This is kind of obvious. If you are offering diverse deals through coupons, naturally your sales are gonna improve. And around the world, customers are increasingly using coupons in a strategic manner. Interestingly, coupons create a win-win scenario. Your customers will be happy with the fact that they could save a certain amount of money using coupons. At the same time, you will be able to increase sales in your store considerably. According to a study, small businesses can expect close to 20% of all their business through promotional deals and coupons. This is, in fact, a significant number and clearly, reflect the importance of coupons in expanding your business.
A vast majority of online shoppers prefer to make a purchase when there is a coupon available. Store owners can make use of this trend by offering coupons strategically to clear excess stock, promote sales of products that give better returns. Similarly, you can promote the sales of slow-moving products, if there are many. When you are launching a new product, coupons are one of the most effective tools that you can rely on. Because there is always that apprehension about a new product in the minds of customers. If you associate a coupon for the new product with the purchase of an established item, conversion chances will be better. Moreover, if you keep a higher order value to apply coupons, you will be able to increase total sales value as well.
Deal with cart abandonment better
The abandoned cart is one of the disturbing realities of eCommerce and anything that addresses it would have a major impact on conversions. Discount coupons play a major role in reducing cart abandonment. This is because, when provided with a discount coupon, customers are willing to go ahead with a ‘risky’ purchase. Also, the impact of unforeseen costs like hidden shipping charges is reduced when they have a discount coupon. Studies point out that almost 60% of first-buyers would be willing to complete the first-time purchase when they have a coupon. Furthermore, it contributes to customer loyalty as well, when you think long term. A staggering 90% participants in a study, among customers who regularly redeem coupons, said they would buy again from a store that offered a deal. Once you are able to establish the quality and value of your store and products, you may not even need to rely on coupons and discounts.
Improve customer satisfaction
Psychologically, discount and free offers drastically improve customer satisfaction on your store. Your store visitors who have a coupon with them, interestingly, spend a more relaxed time on your store compared to those who don’t have. A 2012 study found physical evidence for this in terms of heartbeat, respiration and sweating rate. All these factors were pointing to a more relaxed or happier time when combined with the presence of a coupon.
Another great scope that lies here is offering a personalized offer. Customers are more likely to be delighted to get an exclusive offer.
Use it as the base of your marketing strategy
Coupons are a great way to promote sales and conversions on your store. Similarly, they can also help you get leads for further marketing efforts. For example, if you are offering a coupon for the first time buyers, there is a high chance of a good conversion rate. And now, if you get the email ids of all the first time buyers, you can use it for further targeted marketing campaigns. Since they are already your customers, there are better chances of conversion. Collecting email addresses in exchange for a coupon would be relatively easier if you are focusing on lead generation exclusively.
Track your promotional efforts more effectively
Coupons provide a measurable effort that will help you analyze your marketing efforts better. The number of purchases that applied a particular coupon code will clearly help you understand its effectiveness. Your Google Analytics data can help you understand conversion patterns before and after the implementation of a coupon code.
Some disadvantages of coupons
Though coupons come with a set of apparent advantages, there are a few things you need to be careful about.
Can affect your brand image
Offering coupons indiscriminately might lead to a negative perception of your store. Your potential customers might think about the store as one that offers discounts on everything. This might create a dent in your customer base, as you will end up targeting only those who are hunting for discounts. You might lose the layer of customers who are looking for top quality products, irrespective of the price. A little bit of strategy can help you manage this scenario when you are still building the brand. Instead of offering discount coupons on your products, you can provide coupons for offers on associated services like shipping.
Might reduce the revenue
If not planned properly, the use of discount coupons may lead to a reduction in your revenue. This is because when you offer storewide discounts, it might not have the intended effect overall. This can be dealt with effectively by carefully analyzing which products can afford to be discounted, without affecting the profit margins. Another way to tackle the issue is by offering customer-specific discounts like rewarding loyal customers. This would not create any negative impact on your revenue, but at the same time helps in your store strategy.
Won’t work for all customers
Most of the time, you offer a discount coupon expecting better returns like repeat purchases. But there are a lot of customers, who are actively seeking coupons. If one of your coupon campaigns has the majority of such customers, it won’t have the desired impact. Instead, if you try personalized offers more, it might help you better in building great relationships with customers.
How to devise an effective WooCommerce Coupon Strategy?
WooCommerce offers good features to manage coupons out of the box. If you couple that with some good planning, you can ensure better results.
Give value to customers
Just randomly creating a coupon for a low selling product wouldn’t really work. You need to think in the perspective of the customer before creating a coupon. It should be offering something significant in terms of monetary benefit or functionality.
This is again in alignment with the whole personalization talk. The more you provide an offer that is relevant to customers, the more you ensure satisfaction. For example, a customer who purchased a mobile phone would really appreciate an offer on cell phone accessories. Once you manage to churn out coupons and offers in a well thought out manner, it will reflect on repeat purchases.
Coupons should be time bound
You need to create coupons that have a limited validity. This would help to create a certain urgency regarding the offers. If you are offering a birthday discount, it can be only for one day, a week or a month. The expiry date on the coupons can be determined and modified by watching the conversion rates keenly.
Keep coupon codes simple
Make sure that your customers are able to redeem your coupons without difficulties. Simplify the code so that customers can input them easily. Avoid using confusing letters and characters in the code.
Generating and publishing coupons on your site won’t be enough. You need to promote them effectively for it to reach potential beneficiaries. Email campaigns, social media posting, etc can be effective ways. You can also include coupons in order completion mails to increase chances of repeat purchases.