The word coupon literally means ‘a piece cut off’ in French – so you get the idea. Anyone who’s shopped in the 21st century knows what it is, but is it still relevant today?
The idea of discount coupons is so embedded in our senses that any banner with a number or percentage on it naturally feels like a coupon. But did you know that not all coupons are the same?
Here’s some info on how to leverage WooCommerce (digital) coupons to your advantage while running an online store, especially a WooCommerce store.
What qualifies as a Coupon?
Any discount that you provide to your customers on products can be made into a coupon. By including this broad tag of reduced pricing into the definition of coupons, one thing is clear: they can and must be tailored for individual niches of customers.
For websites that run on WordPress, WooCommerce is a great way to create stores on the fly and generate revenue in no time. WooCommerce offers a wide range of coupon options that businesses could easily use to drive sales to their online stores.
Since our focus is on the profitability of coupons on WooCommerce stores, let’s restrict our discussion to specifically address digital coupons.
Why do businesses use Coupons?
Diminishing the cost of a product to improve a customer’s purchase power is what we usually intend by giving out coupons. If we aren’t careful, this proposition could easily turn to bite us in the worst way possible.
When applying a coupon strategy, we try to achieve a balance between discounts and profitability. No matter how low you reduce the price, you wouldn’t probably lower the price within the cost price of a product.
- With enough practice, your inventory will always be in a state of liquidity. Done correctly, businesses can maintain an even stock at all times without worrying much about dead stock in their inventory.
- The flipside of freely giving out hugely discounted coupons is the loss of brand identity over time. People will begin to associate your brand with cheap products. It’s cool if you are already selling fairly cheap products. Otherwise, the deal looks grim, to say the least.
Here is a list of reasons why you should run coupon strategies. This will help you decide if you have coupons for the right reasons.
1. Create a sense of urgency
- Creating short time coupons does two things – it lays out a clear idea of how long they could expect to buy cheap and makes them choose a bit quicker than usual.
- Your industry is probably full of options anyway. So providing a coupon that you know will give customers a better deal will tilt the balance in your favor. Also by making it only for a short while, customers now will prioritize your offer over your competitors.
2. Get over the old stock
- You may have products that are phasing out from your industry. But there still might be some customers who would like to have a cheap deal for it. Use coupons to your advantage here. Offer a much lower price that stays within margins to keep your inventory fresh and updated.
- You could even try bundling up these products with on-demand products to make your customer’s cart look way cheaper than it actually is.
3. Help loyal customers purchase even more
You will generate a decent following once the quality of your products catches up with the best in the industry. As it happens, you’ll see a steady rise in loyal customers who are ready to invest in your products or service.
- Reward your existing customers with exclusive discounts to make sure they are interested in your products in the long run. This would also improve the customer-business relationship as your customers may go vocal about their product choices with other prospective users.
- You can also use your existing user base to experiment on new products before you make it publicly available.
4. Attract new customers to the store
Coupons are an effective way to let your customers know more about the range of products you sell. This can potentially invite customers to other categories of products that they otherwise overlook.
- Creating new users from existing customers is an added benefit of coupons. Educating customers about what they’re getting through coupons makes the sale even more agreeable to them, as customers will come to expect the same quality for all your products.
- Coupon banners shown on the landing page of most websites primarily catch the attention of customers. If your products are only vaguely interesting, coupon discounts create a welcome impression on the customer to stay a bit longer.
5. Encourage buying
Your store may have all the products your customers may need, but could still lack a gentle nudge to make a sale. Coupons plug this gap and are particularly effective in this respect.
- Discount coupons create an air of profitability around the customer that helps them purchase more than what they initially thought of buying.
- Coupons that are directly applied to carts can decrease the chances of cart abandonment significantly. This improves the conversion rates from casual browsers to happy customers.
6. Promote sales through social media
Posting interesting product videos or catchy images are cool. But nothing comes close to a well-defined clickable discount coupon when it comes to social media promotions.
- A clearly defined coupon that instantly drops your cart total by some good margin is an enticing deal – a much more clickable option.
- Creating a social media campaign that revolves around coupons attract more direct customers from social media than the eventual visits through branding efforts.
Are there different types of Coupons?
There are a lot of different ways in which stores can offer coupon discounts to their customers. To make a general grouping, let’s categorize them into general coupons types and digital coupons.
Coupons in general
1. Percentage discount coupons
- The best way to gift your customers with cart totals well within a hundred dollars would be adding in a percentage discount for their products. As often less than 10% discount on any products looks rather uninteresting, higher percentage discounts look well and won’t reduce your margins by much.
- percentage discount can be applied per item, group of items, or items that are bulk shipped.
2. Dollar discount coupons
- Discounts that involve a fixed cut in price helps customers easily see what they are paying for. This is an effective method for coupons for expensive items, as 10% is always higher than $10 when the cart total spans more than a couple hundred dollars.
- It’s a much more visually pleasing offer as they are actually saving a set number by purchasing the product.
3. Season discount/Gifts
- Nothing speaks more about how you value your customers than occasional free gift coupons or seasonal discounts. Seasons discounts such as Black Friday, Christmas, or even Back to School offers are all well tested out seasonal offers.
- Adding slow-moving products to a customer’s cart as a discounted product or bundling up a group of products under seasonal discounts is a great way to refresh your stock.
1. Downloadable coupons
- These are primarily the coupons that customers could save for a later purchase. You can send them these coupons via mail, social media or through your website.
- Stores often use these coupons to generate interest among a wide range of audiences, as it is an easily shareable option for customers who are interested in the type of products you sell.
2. Mobile coupons
- Mobile coupons are another way to attract more customers to your store and encourage them to purchase hassle-free. The nature of these coupons is set in a way that the discounts will only be available to those who purchase through your mobile app.
- Generating interest in your store’s mobile app is a highly effective way of driving sales as it reduces the average time spent/purchase for your customers.
3. Coupon codes
- These are discounts that apply if you say the magic word, or numbers, or both. Coupon codes are usually a combination of words and numbers specific to the brand they’re purchasing from, which once entered will decrease the cart total at the point of sale.
- There are websites that dig all across the internet to find your customers with available coupon codes that they could use for future purchases. This is another way of increasing your visibility across different audiences.
- Here’s our list of the Best WordPress coupon code plugins for 2020.
4. Automatic discounts
- This is the easiest way you can help your customers get a reduced cart total at checkout. With no need for downloading or remembering codes, these are discounts that get automatically applied at the time of checkout. customers feel more interested in buying from you for future discounts.
- Automatically applied coupons are only visible at the time of checkout, so it can have one of two effects on the customers.
- Customers feel more interested in buying from you for future discounts.
- Since it is only visible at the checkout page, customers who abandon their carts wouldn’t be able to see it.
- It can sometimes become a needless discount if your customer was already comfortable with her cart total.
Digitals marketers all over the world are constantly tinkering with new forms of coupons, so this list is only a modest representation of the basic types.
Will it better your store’s sales?
Let’s consider how digital coupons would fare for your business. You already know how adding all types of coupons is not the right way for your coupon strategy. It’s time to know the benefits and follies of using coupons:
Revenue generating advantages
- Coupons shared online could easily attract new customers to your store
- Digital coupons are a way to share your appreciation for your customer’s purchase through your website.
- Discounts can help in keeping your stock moving at all times, encouraging fresh products on a regular basis.
- New product lines could be introduced for your customers to try out.
- Existing customers get increased purchasing power and increases the chance of future purchases and also reduce cart abandonment.
- Your social media efforts get a direct reward by inviting them through digital coupons.
- You can increase your email subscriptions by enabling them to log in to your website to redeem coupons.
- Separate landing pages for discounts will help measure your efforts.
- Digital coupons greatly reduce the time taken for customers to purchase with coupons applied.
- You can explore new audiences by freely sharing discount codes and coupons online.
Revenue spilling disadvantages
- If you aren’t careful, coupons can reduce the cart value and minimize your profits.
- A poorly executed coupon strategy could make your brand look cheap quality-wise and customers may hesitate to buy from you altogether.
For even more reading on the types of coupons, you can read our blog on how to use coupons and their types.
Add Coupons to your WordPress store through WooCommerce
WooCommerce offers one of the most easily implemented coupon options in WordPress. With a wide range of features, they are used by stores all over the world to run their coupon strategy seamlessly.
You can read our detailed blogs on setting up coupons for your WooCommerce store to get started right away.