Practical Ecommerce

Sharable Coupons Can Boost Sales

Friends shop together online
What our friends and relations think matters to us. I care about what my wife thinks of my new shirt, and when I got a 12-inch table saw this summer, I was sure to discuss the tool’s finer points my friend Steve. I am not alone. Shoppers like and trust recommendations and opinions from friends and family. We all talk about the great deal we got from one store or about the horrible shipping experience we had with another store, and our friends are listening.

Simply put, our peers influence us and we them. They help us make many buying decisions, and savvy online merchants can use this rather natural tendency to increase sales and make happy customers this holiday season. Specifically, I am going to describe three ways to use coupon codes to get your customers talking about your store this Christmas season.

Survey Says: Our Friends and Family Influence Us

First, let’s take a look at the facts and statistics that make this sort of marketing successful. Several recent studies demonstrate that word-of-mouth—when your customers and potential customers are talking about your store and the products you sell—drives buying choices whether positive or negative. For example, 47.2 percent of adults aged 18 to 34 and 45.8 percent of adults from 35-to-54 years old involved in a November 2008 survey reported that word-of-mouth or recommendations from peers effected their decision to buy electronics, according to a study from BIGresearch and the Retail Advertising and Marketing Association. Similarly, 41.2 percent of clothing shoppers from 18-to-34 years of age involved in the study said the same thing—friendly recommendations have an impact. From these kinds of surveys we can conclude that if an online retailer can get existing customers to talk about its store, service, or products the retailer can increase sales.

Many Consumers Will Spend Less, Use Coupons

Next, many holiday shoppers want to save money this Christmas. A Nielsen survey of 21,000 U.S. households showed that 35 percent planned to cut their spending in 2008 amid worsening economic conditions. Usually, when the economy slows down shoppers try to save money. As evidence consider a study from SheSpeaks that found that 67 percent of female shoppers—women make a significant percentage all holiday gift purchases—intended to use more coupons and coupon codes this year.

Friends look at online deals

Using Coupons to Start a Conversation

I recommend trying to use coupons to start a conversation between your loyal customers and their friends and relations about what you sell. In this way, you can address both a need to save money and the human tendency to share information.

Offer a coupon code after a sale—In this first scenario, wait for a customer to make a purchase from your site and then offer him/her a discount, free service, or upgrade on their next purchase. If you have the developmental resources (someone who can customize your shopping cart, for example), make the offer on the confirmation screen in your check out process, or if there is not time for a bit of site development, consider adding a coupon code to your order confirmation email. Encourage your customer to share the coupon code with friends or relatives, even add an “email this coupon code” option. There is no guarantee that one of your customers will send this coupon code to Aunt Mary or to her pal, Nicole, but you are giving them the stuff of shopping conversations. When one of your customers is out to lunch with friends and holiday shopping comes up in conversation, your coupon and the money savings it represents could get mentioned and even passed along. That is really what this sort of coupon marketing is about.

Email your opted-in customers a coupon—You can also take a more assertive tact, emailing your existing customers, your newsletter crowd, or a list. As above, the coupon would offer a discount, service, or upgrade and encourage your customer to forward the coupon code to friends and family members. For extra-conversation power include a product review or case study with the coupon offer. Your customers can read the review, check out the coupon, and forward both to friends with a message. Again, you are trying to give potential customers something to talk about.

Use Buddy Coupons—A typical buddy coupon will offer a small discount, say 5 percent off, to one of your customers, but the coupon’s value grows when that customer shares it. If a friend uses the same coupon code for her discount she gets 5 percent off, but the original shopper’s discount moves up to 10 percent. If a third friend uses the code, the first shopper earns a 15 percent discount and so on. Think of buddy coupons as multi-level marketing for penny pinchers. Buddy coupons get friends talking about what they are buying and where they are shopping. If they are talking about saving money at your store, that is very good news.

Armando Roggio
Armando Roggio
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