Retailers Beware of the E-Coupon Bandwagon – Powerretail.com.au – by Chris Garner
1. Increase margin on sales.
2. Improve the customer experience through upsell.
3. Incentivise loyalty and repeat purchase.
4. Offer enticing product bundles.
5. Offer free postage.
1. Use coupons on high margin products – don’t discount your volume drivers, use coupons to offer customers your higher ticket products or product bundles. This will ensure you never devalue your core products.
2. Structure your offers such as this: “X% off when you spend $Y” where X% off gives you an increased nett margin compared to your average order margin, represented in the following formula: $Y Nett Margin – (X% of $Y) ≥ Average order nett margin
3. Use coupons for upselling – always take the customer up the product range and thus improve their experience.
4. Plan for your coupons to go viral – the very nature of coupons means that coupon sites are community driven and offer powerful word of mouth referrals. Good offers resonate, creating a ripple effect that can generate excellent user-generated content.
5. Ensure your online checkout can reject inactive coupons. Most coupon sites do not remove out of date coupons – it’s your responsibility to make sure your checkout functionality has the ability to reject out of date coupons.
6. Set expiry dates and unique identification to measure redemption. To create a call to action a coupon must have an expiry date and ideally a unique identification number so you can track back exactly where the coupon has come from.
7. Always include stringent ‘Terms and Conditions’ for coupon use, enabling you to to protect yourself (e.g. ‘can only redeem one per household’, ‘only available to the first 50 participants’, etc).