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How to offer coupons without killing your profit?

How to offer coupons without killing your profit?

Thursday May 30, 2019,

7 min Read

From the customers’ point of view, coupons are special because of several reasons the top one being that these tickets bring them discounts. From the retailers’ angle, coupons come with a question mark placed ahead of them. Are they going to bring in profits or just be a source of loses?


At the end of the day, how well a promo code works for a brand depends entirely on how its strategy is designed. While the right strategy can bring in a higher revenue, widen the company’s audience and keep customers hooked, the wrong one can make the business come off as cheap, less valuable, and can also slash down profits.

The goal shouldn’t be to just raise short-term sales but long-term as well. This marketing tactic can make 50% of people who find the coupon visit the store. Moreover, 68% of customers think that voucher codes can increase brand awareness and customer loyalty.

How offering coupons can work in the favor of your brand

The future is bright for deals and discounts. After all, 90% of people use coupons in one way or another. There was a time when there was only a single route for coupons to reach customers. However, now times have changed and there are so many avenues through which brands can offer discount offers to bridge the gap between its products and potential customers.

Today, 48% of the companies in the US use mobile coupons for marketing their products. Overall, the digital distribution of promo codes has bumped up by 27%. When you offer a coupon, people who haven’t considered trying out your products before may do so. The word that you’re having a discount also flies as revealed by Kelton stats that say that 91% of Americans are likely to share info about an exclusive coupon with their circle.

Apart from bringing in new customers, discount offers also help get rid of old inventory. No one likes to see the same old products on the shelves of a store for too long. But your company just can’t discard old products and lose all the money spent on them. This is where coupon codes jump in. By offering voucher codes you help old stocks move out.

Since prices are always already set higher than the cost of production, selling out even with a discount code can be profitable. Offering discounts and deals also reduces overall advertising costs. Now that digital coupon redemption rates are rising, by 2022 the rate is projected to increase by 94%, costs on offering these coupons are also lowering.

Offering coupons without compromising on profits

A lot goes into the process of bringing a deal to customers. Marketers don’t just make a graphic and post it online. They set the time, mode, and reason for offering coupons. Going wrong with offering coupons can backfire in several ways. Here are some ways you can ensure that your coupon offerings don’t eat but boost profits:

1 - Target the right customers

There are various types of customers. There are customers who only shop from you when a discount is running, there are those who are first to buy at full price, then there are those who occasionally shop but remain off the area for months, and so on. Your goal should be to get those people to shop who are going to return for more business.

Customers who wait to shop only when a sale is running do more harm then good. They limit the bigger profits and also keep your inventory waiting until you have to show it out through a discount offer. If you want long-term customers who also purchase at full price to buy when an offer is running, offer exclusive discounts to loyal customers.

However, you may need to target another kind of customers if the reason behind why you are offering a deal is different. For instance, if you want to get new customers on-board, then a better idea would be to offer a coupon to first time customers in exchange of their email.

2 - Minimize cart abandonment

The average cart abandonment rate is 75% which means that you should always assume that after adding items to his cart, a customer may go back to add more items, subtract some articles or may leave the cart be altogether.

In order to reduce the chances of cart abandonment, the first tip to keep in mind is to never have a field that reads “do you have a coupon code?” such a question will send users in search for a coupon who may never return to complete their purchase. Instead a simple “discount code” prompt is enough. Other tactics can also be applied to reduce the cart abandonment rate.

You can offer a first-time discount to shoppers or free shipping coupons. If a customer is exiting your website, you can set up a popup with a free shipping coupon there or a percent-off one. To reach back to customers who have already abandoned their carts, you can send them emails or messages with a discount code for completing their purchase.

3 - Instill a sense of urgency

Your coupon should always make customers think that if they’re late or slow in making a decision about buying a product, they may miss the deal. This is where mentioning the expiration date of the coupon comes into the picture.

Of course, the first reason as to why you should mention an expiration date is that you don’t want customers to keep using the coupon after the offer is over. But the second is to make them see how urgent the situation is and that if they don’t hurry to make a purchase, they may miss the discount deals and then have to buy products at full price.

4 - Don’t be predictable

For some brands, customers become habitual of receiving routinely coupons. For example, many companies offer coupons for special occasions such as Memorial Day, summer coupons, winter clearance coupons, Christmas, Halloween, etc.

When you offer coupons in such a way, your audience knows when you’ll be offering a discount deal. This means that since it is expecting a promo code, it won’t shop when the price is full. So, don’t be unsurprising with the coupons you offer.

Moreover, don’t offer discounts too often. Apart from devaluing your brand with customers thinking that the quality of your products is so low that you offer constant discounts to sell them out, too many sales have people wait for them and never purchase at full price.

A better idea would be to target different customers and offer deals on different products. For instance, a “deal of the day” offer can help sell out a particular product faster.

5 - Consider onsite re-targeting

By onsite re-targeting of coupons, you can reach customers with even the same coupon offerings again and again. However, be sure to not overdo here either. If you notice that a customer is engaged on your site but hasn’t yet selected items for purchase, you can target him with a coupon code popup.

Similarly, a popup offering a discount on first time purchases can also work. Your coupons can be given at some small area on the homepage of your website. A reminder of a free shipping coupon can also be given to customers when they reach the cart page.


To sum up, these were some techniques that you can use to make sure that your coupons bring in profits. Used correctly, coupon codes can be of great value to a business. But a plan that is not on-point can miss the target and result in loses.