This blog is going to introduce the industry of digital marketing coupons, discuss the different types of digital marketing coupons that businesses use as well as seek to find out why businesses are choosing to use them.
So what are digital coupons?
Coupons are no longer limited to newspaper cut-outs and a couple of special leaflets collected throughout the month. Customers are searching for coupons they can immediately load on a smartphone app, eliminating the need to carry slips of paper around (Hendricks, 2013).
The truth is, a digital coupon can mean a number of things: A small clickable banner on a homepage offering 10% off; a discount offered via e-mail, redeemable online, over the phone, or in-store; a printable voucher consumers bring into a store; or even a limited-time deal offered solely to an organisation’s Twitter followers or Facebook fans (Mashable, 2010).
A new report from Juniper Research has found that there will be 1.05 billion mobile coupon users by 2019, up from just under 560 million in 2014 (Juniperresearch.com, 2015).
What types of digital coupons are there?
There are a number of coupons available to consumers. They include:
Downloadable coupons: These types of coupons that are accessible to consumers from a number of different locations. Customers download coupons from a company’s website, directly from an email or via, social media. Most of the time, these coupons are accessible from mobile devices as well.
Mobile coupons: Ecommerce platforms that have integrated mobile applications into their operations offer mobile-only coupons to drive further sales in this channel. One example of this would be the Groupon app that advertises live up to date latest offers.
(Source: Groupon Blog UAE, 2012)
Coupon codes: The growing popularity of ecommerce has greatly contributed to the rise of coupon codes. This form of discount is faster than downloading a coupon and is easier for the customer to complete at the point of sale. These codes consist of a combination of brand-unique numbers and letters (Bigcommerce, 2015).
How are these coupons being made available?
- Coupons are always being E-mailed by companies which can allow recipients to print the coupon and bring it into a store, or simply “mention” the promotion to receive the discount.
- Companies are blogging and providing links to these offers.
- Social media is a great way of distributing coupons to targeted audiences via a network of local sites and social channels, such as Facebook (Mashable, 2010).
- Advert banners are often rented to promote the offer on a locally-focused advertising network.
- Finally Social shopping sites like Groupon allow businesses to offer coupons to local customers redeemable only if a certain number of people sign up for the discount, so it’s a great way to attract a large number of new customers. This method is often seen as being most effective however the voucher provider normally takes around 45%-65% of the sale price as a commission. Most of these tend to be around 50 (Therichardsmith.com, 2015).
Why are there businesses using them?
Businesses use Coupons to Build their customer base. One such example is SocialTwist, a platform that states it “allows users to share in order to receive a better bargain.” Basically, consumers can turn a $1 coupon into a $4 coupon simply by sharing it with four other people. This offer then encourages people to share and requires new customers to sign up and hand over their email address.
(souce: MacNaughton, 2015)
Businesses can easily track their return on investment using online metrics such as the open and click through rate. (See blog 1 for more information on the methods of measurement).
It is also argued that digital coupon campaigns are highly successful for businesses who are wishing to target young adults because of the fact that this is the age range that are most likely to be using this feature.
Lastly, coupons are more than just a one-time deal. They have the potential to create ongoing customer loyalty. Remember this: on average, according to most industry estimates, it costs nine times more money to acquire a new customer than to keep an existing one.
Some critics argue that by creating and distrusting coupon campaigns this can be damaging for the overall image of the business for many reasons. Firstly some businesses are not prepared for the sudden increase in demand which can cause a heavy and strained work load. Secondly by reducing prices and creating special offers this can bring down the perceived value by current customers.
Blog 4 will further investigate the concept of digital marketing coupons by highlighting and explaining how to create an effective campaign.
References
Bigcommerce, (2015). [online] Available at: https://www.bigcommerce.com/ecommerce-answers/what-are-digital-coupons/ [Accessed 3 Apr. 2015].
Groupon Blog UAE, (2012). Download the Groupon iPhone App NOW! 🙂. [online] Available at: http://blog.groupon.ae/2012/07/31/download-the-groupon-iphone-app-now/ [Accessed 3 Apr. 2015].
Hendricks, D. (2013). 7 Tips For Effective Digital Coupon Marketing. [online] Forbes. Available at: http://www.forbes.com/sites/drewhendricks/2013/09/23/7-tips-for-effective-digital-coupon-marketing/ [Accessed 2 Apr. 2015].
Juniperresearch.com, (2015). Mobile Coupon Users to Pass 1 Billion by 2019, Juniper Research Finds – Juniper Research. [online] Available at: http://www.juniperresearch.com/press-release/coupons-pr1 [Accessed 3 Apr. 2015].
MacNaughton, A. (2015). Facebook Marketing: Tips, Tricks & Tools | PromoJam Social Marketing. [online] PromoJam Blog. Available at: http://blog.promojam.com/learn-how-to-take-your-facebook-marketing-to-the-next-level-with-these-great-tips-tricks-and-tools [Accessed 3 Apr. 2015].
Mashable, (2010). HOW TO: Create and Distribute Effective Online Coupons. [online] Available at: http://mashable.com/2010/02/10/online-coupons/ [Accessed 3 Apr. 2015].
Therichardsmith.com, (2015). Groupon and Wowcher- Sinner or Saint for Small Business Marketing. | Small Business Advice (SBA) West Sussex. [online] Available at: http://www.therichardsmith.com/groupon-and-wowcha-sinner-or-saint-for-small-business-marketing/ [Accessed 3 Apr. 2015].
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