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Leveraging COUPONS to boost ECOMMERCE performance


Giving discounts to boost sales and increase revenue is definitely nothing new. It has been one of the oldest tricks to increase sales and customers. Beyond the simple notion that customers are saving money, discounts also have an effect on how consumers interact with your business and your products. In this article, we will talk about how coupons can boost not only traditional brick-and-mortar shops but also works great for online eCommerce platforms. But first, let us talk briefly about the psychology behind discounts.


Saving money isn’t just about the perception of having more money for something else, according to a Claremont Graduate University study, people experience a boost in oxytocin levels when they are offered the opportunity to save money from a product.

Discounts also reduce the chance of customers shopping around for the same product. According to a study done at the University of Adelaide, discount creates a sense of urgency to purchase and it can distract shoppers from looking for other options.

Discounts also increase your conversion rate. There are many different ways to promote your eCommerce store. Most eCommerce store owners start from social media and word of mouth. Many eCommerce store owners would then start spending money on social media ads such as Google, Facebook and Instagram. These are definitely great ways to reach out to your target audience, but the unfortunate reality is that these methods often cut into your bottom line painfully and with the competitive nature of online businesses, conversion rates are often not ideal. This is why giving discounts is so popular and widely used because it keeps your shoppers on your website for longer and can push them to convert their visits to dollars spent. 


We’ve already established that giving discounts works. But why do we need to incorporate discounts in coupons? Why can’t we just slash the price and say 20% off all orders?

To start, people love the idea of discounts in a coupon form, so much that 88% of US consumers used a coupon in 2020. The other reason is data. Giving out flat discounts on selected items or even storewide would usually boost your sales, but by using coupons, you can have much more control and have access to more data. For example, you can send coupon codes through email to your loyal customers, people that you know will likely shop at your store again. You can have custom coupon codes for friends and family referrals to expand your market and knowing that the people that will spread the word for you are your existing customers that are happy with your product. Here is a list of reasons why leveraging coupons can benefit your business.

  • Drive more sales by making tempting offers.
  • Get your customers to return.
  • Drive more traffic to your store.
  • Clear out unwanted product stock.

How should I use coupons?

This largely depends on your profit margins and how urgently you need to clear your stock. So we won’t dive too deep into the numbers as this might be different for everyone. We will focus on effective and efficient ways of leveraging coupons.

First-time buyers

It is important to capture as many first-time buyers as possible because this means potential returning customers. That being said, it is also one of the hardest parts of running an eCommerce store. Once they’ve made a purchase, it becomes easier to build trust and get them to come back for more. A common practice is to provide coupons with attractive offers for first-time buyers. All they have to do is sign up for an account or simply enter an email address to receive the coupon. This has two major benefits, first, you increase the chance of making a sale, second, you now have information of someone that has yet to become your customer, provided voluntarily by the customers themselves. Whereas without the incentive, first-time buyers might purchase your product as a “visitor” and you lose the chance of sending them emails to encourage them to come back.

Existing customers

Don’t forget about your existing customers tho, as a consumer, if I feel like the business only cares about new customers and not about loyal customers, there is a high chance I might turn to another business. So once you get customers on the hook, make sure to use email marketing to send them further coupons which helps keep your store in their minds. With many eCommerce platform offering analytics, you can even target past customers that spent over a certain amount. Include a message that shows your appreciation for their loyalty can definitely go a long way.

Mix and match your tactics

Yes, 15% off or 20% off is definitely a good tactic to get new customers to convert. But like we mentioned in the beginning. Giving discounts like these can sometimes reduce a lot of your profit. This is where the different types of coupons come into play. If you want to increase the average spending on your business, give coupons that can only apply if the customers spend X amount. You can also get the coupon to only apply if the customer buys at least three items. If you want to move some older or less popular inventory, do a buy one get the second 50% off or even a buy one get one free deal. If your business has high and low seasons, utilize coupons to increase sales during the low seasons. You can promote items with high margins and give away low-cost items as free items with purchase. This way you can have more control over your profit margin when giving out discounts and coupons rather than let the customers decide what they want to do with a discount.

Encourage customers to return

I’m sure you have experienced this before, you receive a coupon but you can’t use it right away. In order to leverage the coupon, you have to come back next week. This is one of the tactics businesses use to encourage customers to return. The logic is pretty straightforward, the next time you want to eat out or the next time you need to buy something, you are more likely to choose the business that you know will give you extra items or give you a discount.

How about expanding your customer base

This is where friends and family coupon comes to play. Provide custom discount codes for your existing customers to share with their friends and family is a great way to expand your customer base. Most businesses provide some type of incentive for their customers to spread the word. Such as if the custom coupon code is used to spend over x amount, you will get $25 off your next purchase or something similar. If they already enjoy your product or services, it is just an extra bonus for them to spread the word. Some eCommerce platforms already provide the custom coupon code feature but even if yours doesn’t, a simple third-party service integration can achieve this. With modern analytics, you can even track which customers of yours are more successful in converting their friends and family to be your customers and you can give them more opportunities or more incentives to do so.

In conclusion, with the pandemic changing consumer behaviour across the globe, expanding or moving your business online is very important for a business to survive. However, this also makes online stores more competitive than ever. Utilizing and leveraging coupons is a great way to boost your eCommerce performance, whether it is to attract new customers, make sure existing customers come back for more or increase your conversion rate and average spending amount, coupons are versatile and flexible way to achieve the goals. If you would like to know more about how your eCommerce shop can use coupons, feel free to shoot us a message and we are more than happy to help.

eCommerce Coupon Discount Digital Marketing