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Promo Code Paradise: Using Discount Coupons to Skyrocket E-Commerce Sales

Sean Peek
Sean Peek
business.com Contributing Writer
Updated Sep 20, 2022

One of the many things that make a shopper's heart skip a beat is promo codes. Use discount codes to grow your sales now.

Have the sales from your e-commerce site been steadily declining over the last few months? Are they showing no signs of bouncing back? If you answered yes to either of these two questions, then you might need to make some changes to your e-commerce sales strategy. One highly effective way to do this is with a steady and varied coupon program. In 2020 alone, according to SpendMeNot, over 142 million U.S. adults redeemed digital coupons for purchase, turning this type of promotion into a must-have for all kinds of businesses.

While it’s great to have a solid coupon strategy in place, there are many pitfalls you’ll want to avoid before putting your plan into action. Here are some strategies to help you maximize your coupon sales goals.

What are digital coupons?

At their core, digital coupons are discounts and promotions retailers offer to prospective and existing customers. They are directed at consumers and usually share a percentage discount, free shipping or some other form of discount decided by the retailer. Think of digital coupons as regular coupons, only they exist online to be stored or loaded on a smart device.

How do digital coupons work?

Digital coupons function as an easy-to-use coupon system that, because of the increased speed of a digital platform, make purchasing online items more appealing and less costly. Customers can select coupons they are interested in and add them to their shopping carts to be applied at checkout.

Physical vs. digital coupons

Whether you choose to use physical or digital coupons for your business, there are a few key differences. Physical coupons are much more expensive than their digital counterparts because of the additional costs incurred for printing, insertion and distribution. In contrast, digital coupons may never be redeemed because they can get caught up in a sea of emails and texts that inundate consumers’ phones every day.

FYIFYI: It costs little to no money to send digital coupons to prospective customers on a recurring basis. These coupons can build retention and drive engagement among your customers.

Benefits of using coupons in your e-commerce marketing strategy

Since 90% of customers use coupons, according to BigCommerce, they should be part of your marketing efforts. Specifically, there are numerous benefits of offering digital coupons in your e-commerce marketing strategy:

  • You’ll remain competitive, as digital coupon redemptions are projected to surpass $90 billion by 2022.
  • You’ll appeal to more customers, as 63% of shoppers wish coupons were more available.
  • You’ll increase your sales in an affordable and convenient way, as emails that include coupons yield a 48% increase in revenue.

Types of digital coupons

These are the types of digital coupons you can implement most easily.

  • Downloadable coupons: Downloadable coupons can be accessed anywhere through a computer or a mobile device.
  • Promo codes: Promo codes are a combination of brand-specific letters and numbers that are applied when a customer checks out.
  • Automatic discounts: Automatic discounts can be applied without even clicking on a button or entering a code. They are very effective in the online retail world, as they can entice customers who would not have considered purchasing an item were it not discounted.
  • Mobile coupons: Similar to downloadable coupons, mobile coupons can be accessed on mobile devices at any time.

When to use coupons

To show appreciation to your customers/audience

Make no mistake: While giving something away for free is a powerful marketing tool, it can also have adverse effects on your sales.

The thing is, if you’re giving something away without a valid reason, the recipients of your freebies could question the quality of the item. They may also question your motives or even think of your company (or product) as cheap, since you can afford to give the item away without a reason.

To prevent all these scenarios, you need to have a reason for offering coupons. And what better reason than as a sign of appreciation, right?

Showing gratitude isn’t just a legit reason for giving; it is warm and welcoming, and it’ll even help your company demonstrate that it truly values its customers.

In contests

When you use discounts in conjunction with running contests on social media platforms, you can drive more traffic to your website, capture more leads and increase the chances of your brand going viral, thus giving it more visibility.

There are several ways to run a contest while using discounts:

  1. Give discounts to everyone who enters your contest. Doing so will make your contests irresistible to your audience. The thing is, while running a contest may seem like a surefire marketing strategy, it does have drawbacks. One of the challenges is that many people will not take the time to enter contests. Giving discounts to those who do enter can help solve that problem.
  2. Use your discounts as actual prizes for your contest. Just from reading the subheading, you can pretty much tell how this works: The discount is the reward.
  3. Make using your discount coupons a requirement for your audience to join the contest. Pretty interesting, huh? As you can probably imagine, with this arrangement, you’d likely see some vertical movement in your sales. The key is to make sure that your prize is something your audience wants. Otherwise, they won’t enter your contest.

With seasonal or holiday offers

Offering freebies during the holiday season can actually be a great marketing tactic. While this strategy may seem obvious, here are some tips to consider when using this strategy:

  • Don’t just publish your discount coupons on your social media accounts. An even more potent strategy is to make your coupon your cover photo.
  • Make sure that your discount coupons are highly visible on your website. The more noticeable you make your online giveaway, the better. However, make sure that it isn’t scattered all over the place. The question you need to ask yourself is: “Would visitors to my site find the coupon intrusive if I place it here?” If you can answer that with a resounding no, then placing the coupon in that specific place should be OK.
  • Add an element of scarcity to your discount coupons. Instead of simply giving a 50% discount on your products for a certain day, mention in your coupon when this special deal will end (a week after a holiday, for example). That way, you can compel your audience to buy now.

In exchange for shares

Because of how social media platforms are designed, making your blog posts go viral is increasingly attainable. With one click, your content becomes visible to your customer’s entire network of connections.

Of course, the more eyeballs that land on your content, the greater the chances are that it will get shared. Plus, sharing would make your customer feel good about themselves since they’d feel that they helped their network by sharing something awesome.

That being said, using social media platforms to market your e-commerce site is a solid strategy to get more customers. Offering discounts to consumers who share your content will provide an incentive for them to both market and shop with you.

In regular newsletter offers

Are you capturing your audience’s email addresses and building a list? If you aren’t, not only will you not be able to use the fourth tip, but you’ll also end up missing out on many opportunities.

For every newsletter that you send out, make sure that your discount coupon is visible but not intrusive. Since it’s sometimes hard to predict when your audience might want (or need) to buy your services, adding discount coupons in your email newsletters can increase the chances of your audience seeing it at the right time, because it has always been there.

As percentage-based discounts

Instead of making your discounts a fixed dollar amount, try to use percentages instead. The thing with percentage-based discounts is that it entices your audience to buy more, since the more they buy, the more they can save.

Bottom LineBottom line: Offering a discount can increase your sales and show your customers that your business appreciates them.

How to promote your digital coupons

Here are two great places to start when marketing your digital coupons:

Email

According to a study by Kelton Research and SheerID, companies have seen a 48% increase in revenue per email when promoting coupons. If an e-commerce company’s marketing strategy weaves in even a basic level of personalization – whether that is based on browsing or purchase history – these strategies perform better than more generic messaging.

Social media

Social media coupon launches are very effective for companies that wish to bring in younger customers. This is because millenials and Gen Z commit most of their time to platforms like Instagram, Facebook and TikTok. A 24-hour coupon promotion creates a sense of urgency and FOMO (fear of missing out) in a younger customer’s mind and may induce them to make a purchase with the coupon your company is offering.

Jimmy Rodela contributed to the writing and research in this article.

Image Credit:

Fizkes / Getty Images

Sean Peek
Sean Peek
business.com Contributing Writer
Sean Peek has written more than 100 B2B-focused articles on various subjects including business technology, marketing and business finance. In addition to researching trends, reviewing products and writing articles that help small business owners, Sean runs a content marketing agency that creates high-quality editorial content for both B2B and B2C businesses.