It’s a fact: customers love coupons. Last year alone, approximately 31 billion e-coupons were redeemed globally, compared to 14 billion in 2014, making them a great marketing tactic.
Not only can coupons drive sales and conversions, but they can also increase engagement and brand perception. When they include coupon tracking codes, they can even inform and elevate your CRM efforts.
However, while coupon marketing works, to get the most out of your budget, you need to get the strategy right. This means setting clear objectives, understanding your audience, and creating enticing offers and creatives.
You can reduce your coupon marketing spend by targeting the right people who are most likely to engage with your offers and convert. So, how can you identify them, and how can you encourage them to respond?
Identify the Right Audience by Intention
Instead of relying on assumptions and past experience to find the people most likely to engage with your coupon offers, you can do it faster and more precisely with the help of advanced machine learning (ML).
Use ML to analyze onsite behavior based on consumer data that you have gained with their permission to determine their intention, such as how people view specific products, how they move around the page, time they spent on a particular section, and how they flick through images.
By crunching such data, ML can identify the people determined to buy as well as the people who are just browsing without any intention to purchase. It can also identify hesitant shoppers, in other words, customers who are showing signs of uncertainty.
These hesitant shoppers are still weighing up their options and looking for reasons to buy, and a digital coupon can give them the push they need. In fact, around two-thirds of customers said they had made a purchase they weren’t planning on making after finding a coupon or discount. Therefore, by focusing your efforts on these people, you can cut your campaign spend and boost your sales.
Leverage A/B Testing to Find the Most Effective Coupon Offer
Once you have identified your hesitant customers, the next step is to create coupons that will entice them to redeem. To do this, you need to get the offer right.
When it comes to picking your offer, instead of carrying out traditional A/B testing, for example, sending out a 50 percent offer to half of a group of customers and free delivery to the other half, and waiting for the results, you can use ML to predict the conversion rates (CVR) of your A/B groups, testing infinite variables.
Japanese skincare brand BRIGHTAGE under IM used ML to conduct two tests on visitors who landed on its website to decide the most effective coupon. After randomly splitting the group 50:50, offering a 300 yen off coupon to one group in the first test and 500 yen off to the other in the second test, they found the 300 yen offer had a 22 percent higher conversion rate. As a result, its subscription rate improved from 40 to 70 percent in the first month of the campaign.
Choose Engaging Creatives and Add a Sense of Urgency
Once you have figured out the best offer for the right customers, you then need to get your creatives right.
In general, eye-catching graphics, colors and text can boost engagement and increase the likelihood of action. However, you should also tailor your creatives, such as your images and call-to-actions (CTAs), to match your hesitant customer preferences.
Finally, add a sense of urgency to your coupons by making your offer available for a limited time, for example by saying ‘Take 20% off, 24 hours only’. Even better, add a timer that counts down to the offer deadline, increasing FOMO (fear of missing out).
By using hard data and advanced machine learning to identify your hesitant customers, and to tailor your offers and creatives to engage them, you can drive more clicks and sales. Importantly, don’t forget to add tracking codes to your campaigns so you can continually optimize your coupon marketing and drive your ROI.
* Do you want to know more about how advanced machine learning can help you elevate your coupon marketing efforts? Get in touch with our team today.