I’m going to take a little break from my workflow series to write about coupon strategy for merchants. Coupons are a great tool to employ in your affiliate strategy for luring shoppers to your site and turning those shoppers into new customers. Let’s take a look at a couple of the reasons why you might want to employ coupons as part of your overall strategy:
Shopper Psychology - People simply love to get deals. Sales and coupons work because they tap into that competitive instinct in all of us, that allows us to feel we’re getting an edge over everyone else (other shoppers). Often times even the offer isn’t that important itself, just simply the idea that a shopper is getting some discount outside of the norm. J.C. Penny (a large retail chain in the United States) has recently tried shifting their strategy to that of an every day “fair price” rather than using frequent sales and discounts. The early results seem to indicate this strategy isn’t resonating with shoppers. Why? Well, a lot has to do with that shopper psychology. Take a look at this analysis from the Harvard Business Review: Can There Be A Fair Price - J.C. Penny Strategy Shift Analysis
One of the biggest points in that analysis:
Sales create customer value. Discounts tend to create additional value for many consumers who enjoy searching for and finding deals.
Exposure - If you’re able to distribute out coupons (and more than 1 coupon), you’ll get much more exposure across hundreds of coupons sites. There are potential customers out there shopping right now. They are looking at your competitors sites ,and going off to coupon sites to see if they can get discounts from your competitor. Being there, displayed, right next to your competitors offerings WILL bring new shoppers to your store. Now, it’s not critical to get into a pricing/discount war with your competitor, simply providing that shopper with an option is valuable. Get them to your site, and let them look around…perhaps they’ll like the layout better, perhaps they’ll see something else they can buy along with their original target. Half the battle is won just by getting them to your site, and having a offer spread across hundreds of coupon sites will bring shoppers that might not have any knowledge of your store.
Increasing Purchases and Order Values - A well-rounded coupon strategy will employ minimum purchase discounts. Something like “Order over $100 and get a 10% discount”, or “Buy 2 Widgets and get 10% off a Gizmo”. No big explanations needed here, simply if a shopper comes to your store with the intention to buy a widget, but sees that if they buy something else (something they didn’t have the original intention to buy), they’ll get a discount, this feeds that psychological need to seek discounts, and will be a heavy incentive to make additional purchases.
I’ve tried to provide a few of the positive reasons for employing coupons in your online business strategy, but as with anything, your coupon offers and affiliate management should be conducted carefully to guard against misuse and to monitor and measure success.