Coupons and vouchers have long been used by businesses as a way of driving sales and encouraging loyalty. I’m sure those of you old enough to have been around in the 1980′s will remember the famous green shield stamps and parents religiously collecting Esso’s Tiger Tokens to exchange for some questionable glassware.
The last few years have seen the use of online vouchers, discount codes and e-coupons grow significantly, and we’ve witnessed the increasing popularity of online discount voucher sites - think Groupon, Wowcher, VoucherCodes and Savoo. According to research by Savoo and Affiliate window, between 2009 and 2012 there has been nearly a 40% increase in the number of people searching for deals online.
A combination of general human instinct (we all love a bargain), a long period of recession and customers becoming increasingly web savvy (I can’t remember the last time I bought something from Boden without first checking what discount codes were available on the web) have probably all contributed to the rise of online voucher codes. And, according to recent Forrester research conducted on behalf of vouchercodes.co.uk, growth looks set to continue:
“…the online voucher code market is still in a period of significant growth and advertisers utilising vouchers as a marketing channel enjoy a number of measurable benefits”
Benefits of online vouchers, coupons and discount codes
E-coupons can be downloaded and printed to be presented in-store or through a unique code that can be redeemed at an online store’s checkout. There are all sorts of ways businesses can incentivise customers with offers using online vouchers and discount codes. For example common offers include:
- Buy one get one free
- Money off codes such as 10% discount or £5 off your order
- Spend over £100 and save 20%
- Free delivery and returns
- Three for the price of two
- Money off next order
- Recommend a friend and receive money off your next order
Whatever type of incentive or offer you decide to implement make sure you think carefully the value of the offer and the length of time you intend to run the promotion – for example how would your profit margin fare if you offered 15% and free delivery for two weeks?
Voucher codes and e-coupons are a great, short term tactical sales promotion tool. They can be quick to set up, are easy to measure and split test, they are flexible and can be promoted at low cost via email, social media channels and on your website
The most effective ways to use vouchers, discount codes and coupons
1. Increase sales
Vouchers are a good way to increase sales to your website through incentivising prospective customers. For example you could use them to them to boost sales on a product that isn’t selling quite as well as you hoped or to invigorate sales to help reach a particular monthly sales target.
2. Rewards, loyalty and retention
Retention of customers is essential – as we all know our existing customers are our most profitable. Offering special loyalty rewards such as a £5 money off voucher can work really well. It makes a loyal customer feel valued and can lead to a spontaneous purchase. Also, offering a new customer a discount on their next order is a good way of encouraging new customers to return.
3. Drive traffic and acquire new customers
A timely email containing an e-coupon can be an effective way of drawing new customers to your website. New customers may be more willing to take a risk and buy something if they feel they are getting a bit of a bargain to boot.
4. Launching new website, service or product
Online clothes retailers often use offer early bird discounts with next seasons previews. Voucher codes are a good way of generating interest in something new or trialling a new product.
5. Customer service tool
Often nothing appeases a disgruntle customer more than an apology with a nice discount voucher attached to it.
6. Generate leads and promote newsletter registrations
A discount code can be a good way of getting people to sign up to your newsletter – Gap and Banana Republic have successfully used a 15% discount code as their as their newletter sign-up incentive for a few years.
Now a few words of caution…
- Don’t overuse discount vouchers to the point that they reduce your overall profit margin. Put objectives in place first and be clear about what it is you want to achieve. Think about your incentive and for how long you should offer it for. Remember there is no one size fits all solution – you must research and test what works best for your business
- If offering discounts make sure your discounts are genuine . You don’t want to fall foul of the Office of Fair Trading – I’m sure we’ve all seen the recent news on the investigation into some popular high street carpet and furniture companies.
- Make sure any sales promotion activity you undertake complies with British Code of Sales Promotion and Direct Marketing. You can find full guidelines at http://www.cap.org.uk/Advertising-Codes.aspx
The internet has have provided us with more options and an additional delivery channel but the key benefits remain the same. Used intelligently, with specific business objectives in mind then online vouchers, e-coupons and discount codes can be an invaluable sales promotion tool and I suspect, somewhat more appealing to this generation of savvy consumers than a set of crystal tumblers from their local petrol station.