How to Develop a Successful Digital Coupon Marketing Strategy – The Ultimate Guide
In this article, we will cover the benefits and threats of digital coupon promotions. We will talk about how to design your coupon marketing strategy, how to choose your campaign goals, target, and personalize your coupon promotions, advertise and where to distribute your coupons. You will also learn how to design the coupon advertisements and placements and how to track and optimize your coupon campaigns. Last but not least, we will give you some inspiration for your next coupon campaign.
- What is coupon marketing?
- Why should you invest in digital coupon marketing?
- Benefits of coupon marketing
- Potential downsides of coupon marketing
- Setting a goal for your campaign
- Which incentives or discounts to offer?
- How much of a discount to offer?
- How to use targeting in coupon marketing?
- How to personalize your coupons?
- How to limit your coupon promotions?
- Traditional coupons vs. digital coupons
- How to distribute your coupons?
- How should the coupon code look like?
- How to design your coupon code ads (placements)?
- How to design your website and mobile app UI to accommodate coupons?
- How to manage your coupon campaigns?
- How to measure your discount coupon campaign success?
- How to optimize your coupon campaigns?
- How to prevent fraud and abuse?
What is coupon marketing?
Coupon Marketing is about the use of coupon codes, vouchers and discounts to attract and retain customers, taking advantage of customers' interest in saving money on purchases.
Coupons can take various forms, they can be public codes (BLACKFRIDAY) that a specific target group can use or personalized, unique coupon codes (valentines19503) that are assigned to specific customers. They can be distributed online or offline in many forms (code, barcode, QR). They can be used in both B2B and B2C marketing. Moreover, coupons can be personalized or have specific redemption rules that define desired redemption conditions. Coupons can be a very versatile marketing tool used effectively throughout the customer journey.
Why should you invest in digital coupon marketing?
Coupons have already become sophisticated marketing tools, which not only drive sales, but also help in building brand image and customer loyalty. By using a modern infrastructure, coupon campaigns are also a source of tracking data for CRM, used to build and continuously improve your marketing efforts in general. Let’s have a look at some statistics that show how common the use of coupons has become:
- 90% of consumers use coupons.
- The redemption of digital coupons in the US surpassed the redemption of paper coupons for the first time in Q2 2020.
- Experts predict that the use of digital coupons will rise in 2021, reaching 145.3 million users by the year’s end.
- Digital coupon redemptions are predicted to surpass $90 billion by 2022.
Coupons can help almost every business type and size, if only a coupon marketing strategy is planned according to the current budget and clear marketing goals.
Benefits of having a coupon marketing strategy
Here are some benefits that come with a well-planned coupon marketing strategy:
Accomplish your sales goals faster
Coupons can be used as incentives for customers to perform specific actions that help in achieving sales and marketing objectives. For instance, coupons can help you break even with items that do not sell well and to up-sell your offering.
Grow your customer base
Coupons do not only impact the loyalty of your customers, but also increase the likelihood that they will refer your brand to friends and family more often. People respond emotionally to brands that reach out to thank loyal customers with coupons which undoubtedly helps build positive associations.
Beat the competition
If you find yourself going head to head with other brands, coupon marketing is a great way to make your offers more attractive and popular in the competitive retail environment.
Track your success rate
Offering coupon codes makes it easy to measure your return on investment (ROI). When people redeem a coupon code online, you don’t have to ask them how they found your business. You can monitor the number of redeemed coupons to determine the success of your offer.
Potential downsides of coupon marketing strategy
Coupons, just like any other business tool, carry some hidden risk that you need to be aware of before jumping head-on into discounting.
Possible brand damage
Excessive and constant discounting is likely to lead to possible brand damage with your company viewed as less desirable and cheap.
Increase in one-time buyers
Increase in one-time buyers and reduced rates of brand loyalty among your clientele. This can happen especially if your coupons are placed in public places, websites, or paid advertising.
Less loyal customers
Tendency to generate traffic from price-driven shoppers and customers outside your target group, leading to less repeat sales, increased acquisition costs and burning of your promotional budget. Also, if you discount regularly and your strategy is public and predictable, some customers may try to outsmart you, skip buying at regular prices and wait out until the products are on a discount.
Higher shopping cart abandonment
Customers may churn when they see the coupon box at the checkout, as they drift off to search for a deal. 72% of carts are abandoned, with half of those shoppers leaving to search for coupon codes.
Risking your bottom line
If you are not careful and targeting your promotions right, you can be overspending your budget or risking fraud. Most of the harms of coupon marketing can be avoided by discounting cautiously, a reasonable amount, narrow targeting, sending unique coupon codes or not publicizing the coupons. The right design of your coupon marketing strategy and display can mitigate some of the risks too. With the right coupon provider, you can limit the potential harm by imposing several coupon distribution and redemption criteria. More on that later.
Setting a goal for your campaign
Before deploying your coupon campaign, first, determine what you want to accomplish. Do you want to drive more foot traffic into your store? Do you want to collect information on potential new customers and build up your mailing list? Are you trying to offload excess inventory?
Here is a list of example coupon marketing goals that can help you with planning your next coupon campaign:
New customer acquisition
Whether you want 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.
Boosting sales in a low season or for specific product
Some products or services are seasonal or their sales drop slightly in specific seasons. You can improve your sales in those times by using discount coupons. A good example is airlines offering lower prices and coupon codes on top in the low season (summer). With coupons, you can also grow sales of specific items by selling it in a bundle with a discount voucher. If you have slow-moving items, discontinued or close to expiry date products, you can use discount coupons to get rid of that stock faster.
If you face customer complaints, you can offer them sorry coupons or the value of the service or product returned as a voucher for future use. This is a very popular strategy in the hospitality industry.
Getting customer data or consents
You can incentivize newsletter subscriptions, loyalty program joining, profile creation, double opt-in, cookie consent, data tracking and more with discount vouchers. A very popular coupon strategy is to offer a discount for the first purchase after a newsletter subscription. In view of the new 3rd party data rules rolling out, incentivizing users to allow data tracking can be a winning strategy.
Getting customer feedback and UGC
You can use coupons to encourage customers to take part in a short survey about your brand. Finding out more about potential pain points and fixing the usability of your site and attractiveness of your offering is worth a 20% discount. By giving vouchers, you can also incentivize user generated content or reviews.
Re-engaging inactive customers
You can activate your dormant customers by sending them a limited-time offer containing discount vouchers.
Increasing the basket value
You can motivate your customers 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.
Jumping on the national holidays bandwagon
Many companies offer public voucher discounts on national holidays when customers tend to shop more (like before Christmas, on Black Friday, Cyber Monday, Easter etc.). Read our blog post on 8 ways to increase sales with seasonal promotions to find more inspirations.
Decreasing the shopping cart abandonment
Coupon marketing can be a tool to decrease cart abandonment. You can send emails, push notifications or other types of communication after the customer abandons their basket, offering a time-limited special offer if they complete their purchase within that time limit. You can find real-life examples of abandoned cart promotions in our blog post.
Getting customers to download your app
There are many benefits to your customers having your app on their phones. This will later help you notify your customers about deals in real-time, use geolocation for your offers, and keep your brand top of their minds. You can motivate customers to download your app by offering app-only coupon discounts or a special voucher gratifying the download.
Which incentives or discounts to offer in your coupon campaign?
When you have determined what you want to accomplish with your coupon campaign, you can start evaluating what to offer to achieve that goal. You can research your competitors to see what kinds of discounts they are offering. The best approach is to simply ask your potential customers (through, for example, UX research, user groups, A/B testing) what kind of discount they would appreciate most.
Here are some examples incentives you could offer to your customers in a coupon campaign:
- Free product or service voucher – for example, a free dessert for every lunch meal ordered on Mondays or a free face massage for customers who attend a full body massage in October.
- Free upgrade voucher – for example, a free upgrade to a pro version of your software.
- Free shipping voucher – you can offer free shipping on all orders or orders from a defined value, for example above $30.
- Amount discount voucher – for example, a $10 discount on orders above $50.
- Percentage discount voucher – for example, a 5% discount on all orders.
- BOGO (buy one get one) promotion voucher – for example, buy one t-shirt and get another one for free. It can also be a discount on the product bundle (buy two t-shirts, get 10% off).
- Mystery voucher – you can offer a voucher without specifying what it gives. You can create a couple of incentives and send them randomized to the customers. They will not know what they have received until they try to insert the voucher at the checkout.
How much of a discount to offer in your coupon campaign?
This is a tough question and even asking your customers may not give you the correct answer. A good coupon marketing strategy relies on offering lower discounts and analyzing the response. If you are not meeting your goals, you can discount further. Try to find the minimum discount level that will increase the purchase rates enough to meet your goals. Do not go below your margins unless you need to sell out discontinued, slow-moving, or expiring products.
How to use targeting in coupon marketing?
There is no customer segmentation that works for every business, or even for two different businesses. As every business and audience is unique, you need to dive deeply into the CRM and sales data to choose customer segments criteria. You can segment your customers, for example, by location, age, preferences, family status, purchase history, loyalty to your brand or any combination of these factors. It mainly depends on the type of products and services you offer. You should find the factor that differentiates the customer preferences and shopping behaviours that can be easily identified in your CRM and segment the customers by those factors.
Some segmenting examples include:
- Segments based on the age of customers
- Segments based on 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 a number of orders, the amount already spent.
- Segments based on favorite categories –advanced segmentation used to target coupons typically requires a combination of many criteria, e.g., location-based coupons for regular customers could be targeted to the following segment: "Promo codes for customers from Europe, who have placed at least three orders so far and signed up more than one year ago."
How to personalize your coupons?
You have most likely already heard that personalization is paramount to successful coupon marketing strategy. I guess you also heard, or even experienced, the overwhelming privacy hiccup amongst modern consumers. In these circumstances, using personalization in your coupon marketing becomes thin ice, which needs to be trodden upon lightly.
Does it mean it is better to give up personalization? Of course not. The key to moving freely in the field is ensuring a proper balance between “loss” of privacy due to revealing personal data, and benefits the consumer gets in exchange.
To offer relevant deals, which let your clients save money, you need to first know your audience. This can be done by incentivizing their consents to track their behavior, access their data, asking them to fill out their profiles, preferences or surveys. The beginning of the personalization process starts with getting a proper customer data platform and the data to feed it, defining which data you want to collect and ensuring data quality. Once that data and customer segmentation is ready, you can start with promotion personalization.
Some ideas for the customer data to be collected:
- Family status.
- Work occupation status.
- Contact details and consents to contact them via those channels.
- Purchase history.
- Product or service preferences.
- Significant dates such as birthdays, anniversaries, etc.
Once you have the CRM or CDP in place, full of quality data, you can connect your voucher management software with that data to use it for coupon campaigns personalization. You can use the customer data to run advanced promotions, for example a 20% off coupon voucher for children clothing only for those customers who are based in Germany, between 25 and 40 years old, who have purchased at least once from your company and who have children or have purchased any clothes from children category before. This level of personalization would not be possible without a proper database and a coupon automation software.
Quick Tip: Remember that personalization cannot be managed manually at scale. Even in the beginning, it is worth it to invest in coupon marketing software that already supports coupon automation.
Which limits to use in your coupon marketing strategy?
Besides defining your campaign goal, incentive offered, targeted segment and personalizing your campaign, you should also think about the campaign limits. You should keep in mind your target market and goal of the campaign to define which limits to use. You should definitely introduce some limits, at least to protect yourself from fraud. Here are some ideas of the limitations you could implement in your campaigns:
Number of redemptions per customer
Define how many times a customer can use your coupon.
Total discount per customer
Define how big of a discount a customer can get from one coupon code (used once or multiple times, depending on the previous limit).
Timeframe of the campaign
Define in which time frame the coupon should be valid. It can be either based on calendar days or time since the coupon was delivered to the customer (this is especially important for automatic promotions that are triggered by specific events). You can also make it valid only on specific days or hours of the day.
You should select who should be eligible for the discount. For example, you can choose which segment should get that discount.
Discounted & excluded products
You can select which products and product categories should be discounted and which should be excluded from getting a discount.
You can define which products should be included in the cart to qualify for the promotion. Define the qualifying products, including their quantity and price.
Order value & size
You can define the minimum order size and value that qualifies for the discount.
Where is the discount valid
Is it valid only in physical stores? Is it valid online as well? Maybe in specific locations only?
Eligible payment methods
Define whether all payment methods are accepted for getting this discount or only some payment methods are accepted.
Which discounts can be combined and which exclude others? What is the discount hierarchy? If you offer more than one discount coupon to your customers, you should define the conditions of promotion stacking.
Campaign overall limits
You can limit the whole campaign budget by the number of discounts applied, the total discounted amount or the total orders value (the amount from which the discount was calculated).
When designing your coupon marketing strategy, you should keep in mind marketing psychology to make your offers work. You can grab our free guide to marketing psychology to get you started.
Traditional coupons vs. digital coupons
Before we jump into the distribution channels, there is one more thing to consider in your coupon marketing strategy – whether to offer online, traditional or a mix of both coupons. As more and more customers expect digital coupons, traditional retailers and pure online players who don't deliver on that expectation, run a huge risk of losing customers to the competition if they do not offer coupons online. As highlighted by the ongoing COVID-19 crisis, the digitization of the retail landscape is inevitable. That does not mean that you cannot apply traditional coupons in a printed version somewhere in your funnel, but that digital coupons are simply a must, especially if your target group is tech-savvy. If you run a brick and mortar business, you can simply offer both or even better, make the same coupons available omnichannel and be redeemable both offline and online.
Digital coupon statistics show that consumers are 77% more likely to redeem them than print coupons. Another reason to move towards digital vouchers is the price. Traditional coupons are less eco-friendly and require much more resources for printing, sorting and distribution. In addition, they fail to offer detailed tracking that comes with digital incentives, unless they are generated using a digital system behind. More about offline coupon tracking here.
How to distribute your coupons?
Where you place your coupons is a big part of your coupon marketing strategy. There are many channels you can use to promote your coupons. You should investigate where your customers spend the most time and then try those channels. You can then see the open rates and redemption rates and adjust your coupon distribution strategy accordingly. Of course, the preferences will depend on the customer segment (mainly on the customer age and location) so you should use different channels for different customer segments. We have listed some channel ideas for you below.
Coupon aggregation platforms
Thanks to websites like this, your coupons can reach customers who haven’t heard about your brand yet, but look for specific products. It is a chance to compete with the greatest giants and win new acquisitions. Examples: Groupon, RetailMeNot.
Quick Tip: Place coupons in the right category, as a mistake like this can burn your budget in a blink of an eye. Also, share only those coupons you want to go public and viral.
Look at this post to find coupon platforms ready to promote your coupon codes.
Email coupon marketing has one significant advantage – it can be highly personalized. It means extra points to their marketing power and a chance to build 1:1 interactions with potential buyers.
Quick Tip: While acquiring email addresses, always inform your visitors about how often you will email them and how they can quit their subscription. Showing respect for their privacy makes people more willing to share their data.
Instead of just sending emails to all customers you can also send the discounts exclusively to the newsletter subscribers to promote your newsletter subscriptions.
Social media can be a great tool for coupon distribution. You can reach your current followers by posting organically on your feed or in your stories or use social media for acquisition campaigns and place the coupons in paid ads. There are various social media channels you can use to distribute your coupons, for example (you should choose the ones relevant for your target audience):
You can give coupon codes to the influencers so that they share them with their audience. This can be a great way to access new customer segments. You could pay your influencers per content piece or a provision from sales associated with their discount code. If you are thinking of using many smaller scale influencers for your strategy but worried about the tracking of your campaigns, read our post how to measure nano- and micro-influencer campaigns.
If you have any business partners you could offer special coupons for their customers. They could then promote your coupons on their websites, social media, and other organic channels. You can do the same with their discounts. That way, you can get some new customers from their network and vice versa.
SMS open rate is one of the highest from all the messaging channels. Phones are considered personal devices and customers usually check all messages they get (as opposed to email, where they are used to receiving and ignoring massive amounts of spam). To make the most of SMS, you should combine it with geo-targeting. SMS gives you a chance to catch customers right in front of the store, and a coupon makes the message a real incentive. Read more about geo-located coupon campaigns in this post.
The popularity of live chats is continually growing. We recommend it as a support tool, which is well suited to a modern, tech-friendly consumer, and also as a great marketing channel. Besides serving support requests, you can leverage your live chat to build an outstanding customer experience and boost sales. How? By launching flash sales, personalized campaigns, and other coupon ideas through a live chat. Need ideas? Here you go!
You could place coupons on your blog, reaching your loyal customers that actually read it. It will also make the deal searchable for search engines.
Sales-specific landing pages
You can create a landing page for all the promotions and sales you are publicly running at the moment. You can combine them with a sales category that displays all the discounted products.
You can place your coupons on website banners, for example on the main page or a category page or even on the product page.
To have your coupons placed throughout the website and always visible, you can place them on the website top ribbon. They will be always at hand, even in the basket or checkout view, which will make the deal redeemed more often and will decrease the customer churn caused by people who leave the basket to search for discounts.
You can place your discount coupons in the website footer, it works well for newsletter subscription incentives. You can also add a link to the promotion terms and conditions there.
This is a controversial placement, it has both benefits and drawbacks. If you place your discount vouchers straight in the basket view (for example, as a dropdown list), you can burn your marketing budget as customers who would have bought anyways, without this incentive, may use the coupon and pay less. On the other hand, you can close more purchases because unconvinced customers can be convinced to place their order if they see a discount offered (especially a time-limited discount) and you can decrease the basket abandonment rate as customers won’t drift off to look for better deals.
Customer cockpits (digital wallets)
You can offer customer cockpits for logged in customers that display all their rewards and incentives, for example loyalty points, gift card balance, offers, discount vouchers, together with their conditions and validity dates. This offers clarity and helps customers to have an overview of what they can use for their next purchase, especially if you offer many incentives.
Word of mouth (referrals)
You can offer discount vouchers as a referral reward for either or both of the referrer and the referred friend.
You can insert a voucher code to your paid ads, whether those are banners or even PPC SEM links (you can add it to the meta description). Get creative!
Mobile app banners
By 2022, 80% of all coupon redemptions are projected to happen on a mobile device. Mobile is a very important sales channel. Whether you offer a progressive (PWA), responsive or mobile version of your website or a dedicated mobile app, if you want your coupons to get visibility you should offer them there. It can be the main page banner, a product page or virtually any other page, depending on the offer and for whom it is most relevant.
Website and mobile pop-ups are a very visible placement to use for your coupon distribution. However, they can be considered intrusive, as they cover the content the user wants to access. Moreover, the coupons cannot be easily found again once the pop-up disappears. Therefore, we do not recommend a pop-up for discount coupon placement, unless it is an additional placement and the discount coupon is always visible on the main page, website ribbon, in the basket, or other permanent placement.
Push notifications are a great way to distribute discount coupons, especially if they auto-apply the coupon, let customers copy the code or take them to the promotion’s landing page. Otherwise, they have the same drawback as pop-ups as they are not permanent placements and, once read, will disappear (together with the discount code).
If your company sends surveys to measure client satisfaction (e.g., Net Promoter Score), incentives will help marketers to involve customers in building metrics and increase chances for better conversion. There are two simple tactics that companies can implement:
- Send each user an invitation to share their opinion and emphasize the message with a coupon code.
- Thank everyone who shared their opinion by sending the unique coupon. Coupons can be a part of a message with measured results or can be an automatic response to a filled out survey.
Printed coupons (POS)
You can distribute printed coupons either by sending them by post, placing them in your store (for example, at the checkout counter), having them distributed by stewardesses or other employees in your physical store. You can also attach them as hand-made messages to your deliveries.
You can syndicate your promotional content to newspapers or pay for paid advertisements in the newspapers. There are plenty of formats, from small banners to full-pagers or even leaflets attached to the newspaper. If there are national sales events (Black Friday in the US, Glamour Napok in Hungary etc.), often newspapers or magazines have a special section with coupons. Even people who never buy newspapers or magazines shop for them on that occasion so placing your (even online!) coupons there may be a good idea.
If you want to gain some offline visibility, there are plenty of options. From billboards, road-side banners, banners on airports, prints on tramways or buses to posters hanging in venues, there is a lot to choose from. Choose whatever can reach your audience best, not what can reach the most people (that can be expensive and inefficient).
Television, radio, cinema and Netflix, HBO, Hulu etc. Lots of people still watch cable television and even more watch streaming channels or listen to the radio (or Spotify). Those are great ways to advertise your promotion. Remember to make your discount code very short and easy to remember if you want to place it in such an advertisement as your viewers will probably not be able to note it down. It is best if, in addition to this ad, you will place your discount on your main page just in case someone remembers only your company name and looks up the discount online. Same goes for brick and mortar establishments – hang the poster on your front display if you advertise it in mass media, to make it easy for people to find if they did not memorize the code.
Leaflets or pamphlets
You can include your coupons in your leaflets or newspapers, if you issue any. For example, if you send a monthly newspaper with discounted products, new products etc. or a magazine, you can include the coupons there.
Looking from the customer's point of view, delivery details are one of the most preferred types of emails. Why not supply these messages with personalized coupons?
Labels and price tags
You can add the coupons to the labels or price tags, either in-store or online. Online, you could place the coupon next to the price tag, so that customers know there is an available promotion. Make sure the promotion conditions are visible, too.
Your SWAG pack
SWAG gadgets which participate in building your brand awareness can be turned into coupons. This is a great idea for a promotion on an event (for example with your partner agency, company, influencers or VIP customers). After the event, you can give the participants a swag pack together with a discount coupon for the next purchase.
Customers often forget about the deals you offer or miss the offer completely. To remind them about soon to expire discounts, you can send them coupon expiry notifications. Read more about coupon notifications in our blog post.
Omnichannel coupon experience
Each of these channels can be a good choice, but only when combined together can they really work great. Whatever channels you decide to use, keep in mind that people strive for genuinely omnichannel experience these days. It means they want a seamless journey when changing from online to offline mode. The way you sync your online coupon marketing with the in-store/offline experience decides its final efficiency and results.
What should the coupon code look like?
Your coupons should be easy to use, easy to remember and make the checkout process a piece of cake for the users. Here are some universal tips on how the coupon codes should look like:
- Not too long, not too short – the perfect length of a coupon code is between 8-12 characters long.
- Is it 0 or O? – avoid ambiguous characters and exclude them from the character set.
- Cut the coupon into pieces – divide the codes into smaller parts to simplify the validation process.
- Remember about branding and seasonality – codes connected to your brand or a special occasion are more engaging to customers than a random string of numbers and letters.
- Your coupon codes should come in all possible forms – ext, barcode, QR, mobile, and even print. The wide variety of coupon formats you deliver to the customer translates into many validation and redemptions points they can use.
- Easy to copy – make sure that customers can easily copy and paste coupon codes. Never force them to type in the promo codes manually.
You can learn more in our guide on how to ensure a fantastic coupon validation experience.
How to design your coupon code ads (placements)?
Coupon ads design is an important part of your coupon marketing strategy. There are four steps to designing coupon ads that convert:
- The coupon ad design should catch attention.
- You should provide an expiration date of the promotion. Short time frames convert better than longer ones as they create a sense of urgency and FOMO.
- Write clear and concise messages. If your promotion sounds complicated, less people will use it.
- Design a tempting call to action, for example “Claim your deal” or “Save money now”.
Here are some real examples of eye-catching online coupons:
How to design your website and mobile app UI to accommodate coupons?
We have collected coupon promotions UI best practices together with examples from top brands in a separate blog post. It is a long read but if you need to design your website and mobile app to accommodate coupon promotions, we highly recommend it. It contains a set of best practices that you can also pass to your UX/UI designers as a requirement.
How to manage your coupon campaigns?
The technology stack is the base of your coupon marketing strategy. You can start with a simple coupon software that allows you to create a coupon campaign with limited options. You can even start by generating a list of randomized codes and setting them up in your pricing software as coupon codes that will generate a simple discount, let’s say $20 off. When it starts to become more complicated is if you want to, for example:
- Scale your campaign.
- Trigger the coupon distribution and assignment based on certain events.
- Limit your campaign further and create complex scenarios.
- Connect the coupon software to other software applications.
- Personalize your promotions.
- Track and A/B test your campaigns.
- Manage other types of campaigns (loyalty programs, referral programs, gift card campaigns, giveaways or cart promotions) and combine or stack campaigns.
In that case, you will need a more advanced voucher management system.
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 you can read our blog post that compares these two options.
What a good coupon management system should have?
Support for many campaign types
You should be able to launch various campaigns from one promotion management software, to be able to manage them in one place and to combine and stack various types of promotions. You should have the option to launch discount coupons, cart promotions, gift cards, referral and loyalty programs from one software.
Advanced campaign customization
You should be able to create customer segmentation, the campaign rules and limits based on any data. This will allow for personalization once you connect all of your data sources.
Redemption validation mechanism
Your coupon management software should check if a customer profile and current context are eligible for a discount. It should also save the details about successful or failed redemptions and potentially notify you if fraudulent behavior is detected . You should be able to connect the redemption process with every customer touchpoint easily, to make the promotions truly omnichannel.
Redemption rollback mechanism
You should have an option to cancel a redemption if it was granted to a non-eligible customer.
Customer data import or CRM integration
To personalize the promotions you will need to have the customer data reachable from your voucher management software. You can either import the relevant information or connect the two systems: coupon management software and your CRM system. The connection with CRM is crucial for running the campaigns and reporting on their outcomes.
To personalize or better target your promotions, you should be able to create customer segments, both static and dynamic.
You need to be able to set up who is eligible for which promotion and in what context. To get truly creative, you would need the flexibility to create validation rules based on the:
- Order structure & volume
- Budget constraints
- Customer location & device
- Purchase history & in-store activity
- Redemption history
- Marketing permissions
- Custom attributes (metadata)
You should be able to mix different validation rules to create more targeted campaigns and protect yourself from unnecessary spending or fraud.
Your coupon management software should let you control the promotion budget by setting up safety limits which automatically deactivate your promotion. It should be possible to set budget constraints based on:
- Total discounted amount
- Total orders value
- Total number of redemptions
- Total redeemed gift amount
- Redemptions per customer
- Redemptions per customer in a campaign
- Redemptions per customer per day
- Campaign timeframe
You should be able to pull the data from your coupon management system to create customer cockpits where your customers would see all their rewards and incentives from all campaigns you are running. This will take the heat off customer support agents by helping the customers to self-serve.
Landing pages creator
A landing pages creator that creates responsive website pages is a nice-to-have. Landing pages creator speeds up greatly time-to-market and lets marketers create the campaigns by themselves. It should contain a couple of page templates, reusable widgets and e-mail collection forms. It should have branding possibilities.
You should be able to add your branding to the landing pages, messages and customer cockpits. If you want to fully customize your front-end, you should look for a promotion engine that provides purely back-end functionality and can easily connect to any front-end. This is the case with API-first promotion engines. If you want to use built-in front-end capabilities, for example email designer, landing pages designer, make sure these are customizable.
Omnichannel & automated distribution
To engage customers in the right context and at the right time you should be able to distribute your coupons omnichannel to all possible existing and future channels. If you can manage your coupon campaigns and distribute them from one place, it will help you to distribute them faster and to maintain messaging and data coherence across platforms.
You should be able to automate the incentive delivery, for example based on some triggers, like a customer entering a specific segment or performing a specific action on your website.
To make your work more efficient, you might want to have a possibility of creating bulk updates – changing or deactivating multiple vouchers or promotion tiers, uploading customers or products in bulk.
Self-service marketer-friendly dashboard
Having a campaign editor that can be used by marketers without the need to program each campaign is a must.
Marketers, ales and Customer Service Agents should be able to, for example:
- Find and deactivate a single coupon.
- Check the single user view to see the customer’s history.
- Quickly change the promotion mechanism in response to any legal requirements or competitor landscape.
- Double-check the validation mechanism in case of a customer complaint.
- Return the money to a gift card in case of reimbursement.
- Launch a flash sale in a couple of clicks to meet the daily turnaround goal.
Role-Based Access Control
Your coupon management software should let you establish roles and access flow for your team members to prevent any unauthorized changes. Team members from customer service shouldn’t be able to launch new campaigns, but they should assign an “apologize” coupon for a customer. Junior marketers shouldn’t be able to give 50% off discounts for the whole inventory, but they should be able to compile a performance report from A/B tested campaigns. You should be able to create specific read/write, read-only, no-access permissions for every team member or partner.
Tracking and reporting
You should be able to get some insights on the performance into existing campaigns so that you can plan the next ones better. The most efficient solution is to let your marketers track any promotional campaign without wasting developers’ time. Therefore, your coupon management software should have built-in tracking that does not require a set-up done for each campaign.
Training and documentation
Make sure that your coupon management software has an up-to-date, understandable manual so that your employees/colleagues can use it as self-service.
Compliance with legal requirements
One of the important things you should keep in mind is involving the legal department in making sure the data storage, processing, and all consents they collect are compliant with the local laws. Keep in mind that they might not be the laws that apply to your company based on your location but the laws of the countries where your customers are located. This might be very complex if you have an international business online, with many customers coming from different countries.
A couple of topics to be on top of:
- Unfair and deceptive trade practices.
- Having an expiration date on gift cards might be prohibited in some countries/states.
- Privacy and data security – many countries have different rules on data storage and processing.
- Tax implications.
Reduce the maintenance and running costs to the minimum
Developers’ time is not cheap. There are a lot of more important projects in your backlog than simple changes to the promotions, which could b potentially done by your Marketing or Sales departments. You should ensure that the solution you implement will reduce maintenance and running costs to the minimum.
The best way to do that is to go for an API-first solution. API-based coupon management software will make implementing all the previously mentioned features faster and cheaper as well as allow for plenty of customization.
How to measure your coupon campaign ROI?
There are a couple of measurements you should implement to measure the success of your coupon campaigns.
Each redemption should be tracked and include the following details:
- Whether it was successful or failed.
- Customer who redeemed the code.
- Date and time.
- Coupon code, campaign, and redemption channel.
- Order details (cart contents, delivery method etc.).
Customer detailed view
It is very insightful to have a 360-degree customer overview. You should be able to see all purchase history, redeemed coupons, valid coupons per customer.
To see how your channels are performing, you should be able to access distribution reports with open rates (OR) and click-through rates (CTR).
You should be able to see the campaign details at a glance, including the number of generated codes, utilized codes, current balance and its duration. It would be also helpful to see the average basket value and volume from all purchases in this campaign. It would be useful to know the total number of redemptions per single coupon, campaign, user, or global incentive. You should also be able to track changes made to the campaigns (especially important if multiple people can access the coupon management software).
How to optimize your coupon marketing strategy?
There are a couple of ways to optimize your coupon marketing strategy. Most of them are based on trial and error and require you to measure the results, so implementing tracking is the base for it. There are two main approaches to optimizing coupon campaigns:
Launching smaller campaign experiments
Doing a test run with smaller segments can help you determine which strategies are the most effective. This can also help to keep you from offering a discount that is too big and cuts into your profits.
In the beginning, you could run small campaigns with diversified parameters, such as discount value and type, and duration. You must be patient and aware that it will take some time and numerous experiments to figure out what works best for your business.
This one is more complicated as it requires a dedicated software that would show different campaigns to different people in a randomized manner. On the other hand, the results are more straightforward and obtained in a more reliable way than if you were just launching small experiments. If you have or can pay for a software that allows you to A/B test your campaigns, we believe this is the best way to optimize your campaigns.
How to prevent coupon fraud and abuse?
Here is a short list of tips for preventing coupon fraud:
- Generate hard-to-crack codes.
- Limit the number of coupon redemptions.
- Control the coupon activity period.
- Assign unique codes to single customer profiles.
- Introduce budgetary limits.
- Use cart- and order-based coupon redemption criteria.
- Introduce email verification for digital offers.
- Invest in behavioral analytics to detect suspicious activity.
- Monitor IP addresses with a web beacon.
- Create geo-located coupons.
- Monitor redemptions to detect suspicious behavior.
- Control the coupon distribution.
- Use a staging environment to test coupons.
- Control access to your coupon management software.
- Don’t reveal everything.
If you want to learn what each of these points means in practice, read our article on how to prevent coupon abuse and fraud.
Coupon campaign inspirations with examples
You can find discount coupon campaign inspirations, together with best practices and tips in our Inspirations Library.
A great coupon marketing strategy requires a comprehensive coupon management system that can be connected with various data sources and distribution channels. It should also enable launching personalized and easily manageable promotions at scale.
The coupon management software is the base for launching effective coupon campaigns. You should start with planning your requirements, finding the right software and then launching and optimizing your campaigns. We hope this guide helps you go through all the phases from planning to implementation of your next successful coupon campaign.
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