What online coupons are and how to utilise them effectively

What online coupons are and how to utilise them effectively

Online coupons offer the same functions as regular paper vouchers that come through the mail or can be found in a newspaper or magazine, they both offer a percentage discount or a set amount of money off a purchase when a customer meets certain conditions. The main difference between paper and online vouchers is that online vouchers are usually specially dedicated for use on online ecommerce stores whereas paper vouchers are usually open to be redeemed at physical stores. Occasionally there will be an option to print an online voucher and use it in a high street store, but this is not commonly the case. This is because many online vouchers are simply codes made up of numbers and letters that are usually sent through email that the customer can add into a section of their checkout to reduce the price of items already in their basket. This kind of method would not work in a brick and mortar store for obvious reasons.

Using online coupons can do a lot for a business in terms of both revenue and reputation. This is due to customer’s love of a great deal, most shoppers will happily pay less for their items if they get the chance to so when they are offered they will jump to do so. However as with anything there are both pros and cons for the use of coupons for ecommerce stores.


  • Sudden rush in revenue due to more customers being willing to pay lower prices while they are available
  • Acquires new customers as the sale can reach new people and make them aware of the brand
  • Reminds old customer of the brand by offering them something new
  • Brand exposure from advertising the deal
  • First time buyers more likely to purchase due to lower costs, as they will be more willing to try a product for less money
  • Can lead to further unexpected purchases if they find something else while browsing
  • Increase in long term customer base due to acquisition of new customers if service is of a high quality
  • Increase in traffic due to intrigue in offered deal or items
  • Helps clear out soon to be discontinued stock when offers are specialised to certain products
  • Can encourage customers to swap brands if the quality of service is good enough
  • Positive increase in reputation due to increased sales and customer care


  • Can be expensive for the company if calculations of existing profit are not done correctly, meaning the company will lose money
  • Not a long term promotional option as customers will come to expect offers or not return after using them
  • Loss of revenue when many offers are given to customers already happy paying full price
  • Can lead loyal customers to feel unappreciated if all deals are directed at new customers
  • Too many deals can lead to many full time customers being replaced by deal searchers meaning a loss in overall revenue

There are many circumstances and instances where coupons and voucher codes can be used as they don’t always have to be used or even distributed in the same way. For a more personal and tailored feel to campaigns they can be setup to target specific groups of people categorised by anything from what they did while on your store to how they got there in the first place. Be sure to explore every kind of voucher offer to choose the appropriate one for your customers as they are all beneficial for very different things.

The kinds of offers that can be used with vouchers include

  • Percentage discounts
  • Set figure discounts
  • Free shipping
  • Offering a free gift

Percentage discounts are the most common kind of voucher deal, they are an offering of a set amount, say 25%, off products and services that reduce the overall amount a shopper would have to pay for their selected items. Higher discounts such as 25%-75% are usually used for items that are about to go out of stock or be discontinued as it offers a rush of customers to buy up stock that will otherwise go unsold. Smaller discounts such as 5% – 10% can usually be found when a company is trying to boost revenue or brand awareness and acquire new customers.

Set figure discounts are when a specified amount of money can be redeemed and taken off an item during purchase. These kinds of discounts usually have a required spend limit before they can be redeemed as otherwise they can lead to minus payments in checkout if the set discount is a higher amount of money than the item a customer is attempting to pay for. This money can be offered as a code redemption or as credit on a user’s account, effectively making them feel as if they are being given money for free to use as they wish.

Free shipping offers are attractive to many customers as many do not usually want to pay extra for delivery as unsurprisingly this extra cost is one of the leading reasons for shopping cart abandonment. The offering of free shipping could be all a customer needs to convince them to finally make the purchase they have been pondering over for weeks or even months and possibly purchase more than they intended to to make the most of the missing shipping charges while they last.

Free gifts are usually used to benefit regular customers, send out through email this kind of voucher allows a customer to redeem a free item the next time they shop. Again however there is usually a minimum spend limit before this kind of voucher can be used as many companies would end up simply sending out free items and paying delivery charges to get them there, leading to no benefit for the company at all. This can lead to a rise in order size as many would buy a little extra if it meant that they would receive a free item in return. As well as boosting order sizes this can also be used as another way of shifting unwanted or soon to be discontinued items.

Knowing what kind of voucher to offer however is only half of the process. There needs to be a reason the code is being sent out, otherwise it will usually end up as a pointless and unnecessary sale for the sake of offering one. Vouchers can be used to make customers feel specially picked out and thought about, so use this to your advantage. Choose a reason for the campaign that they will recognise and feel appreciated for such as the ones below.

Seasonal deals

The calendar year is full of large and small holidays from christmas to chip and dip day, utilise them and make the most of them to give specialised deals and discounts based on the theme of the holiday you choose. For example around christmas offer a last minute shopping sale, an array of christmas themed extras added to their delivery package or even offer to gift wrap their order for free. These specified options add to the holiday feeling for the shopper and will gain your business a good name when it comes to the finer details of online shopping.

Abandoned cart emails

Many people get distracted whilst shopping online, this is usually surprisingly due to the efficiency and flexibility of the service. The ability to shop wherever whenever can lead to customers shopping on the bus and suddenly having to get off, slipping their phone into their pocket, or even browsing whilst waiting for children to finish school and slipping their phone back into their bag mid purchase because their little ones are in sight. Whatever the reason for an abandoned cart a friendly email reminding them that their chosen products are there and waiting can be incredibly handy for the busy customer who let their shopping slip their mind. It can also boost business revenue as many sales that would have otherwise been forgotten about will be picked back up and followed through with.

Email newsletter subscription benefit

Email and subscription vouchers can be used to build up an email list, as shoppers will be more likely to sign up if they are made aware that they will get either a first time sign up deal or continuous bonus deals from being a brand member. This can benefit a company in two ways as it not only boosts sales due to people signing up for newsletters purely for the deals available to them once they do, but it also increases brand awareness as it gives a wider scope of people that have given consent to be sent monthly newsletters and product updates.

A thank you for liking / following

Another way to boost exposure, offering discounts to people for liking and/or following a page can boost a company’s presence on social media whilst boosting traffic to their website simultaneously. It encourages customers to interact with the company with a reward of a free item or discount if they do, therefore increasing their following lists. A benefit of doing this is that when a customer likes or follows your page, their friends will see it. This can potentially bring them to your store too if their tastes are similar to their friends and bring in even more customers than would have been reached though things such as email marketing.

First order

Offering a discount to first time browsers / shoppers on the store usually through a banner or pop-up advertisement to make it specially for new customers can help influence the shoppers opinion. The chances are that new customers have little or no experience with your brand and are looking for a little incentive to try it, offering a discount or free shipping to a first time customer can sway them toward a purchase as it will make them feel a little better about the money they spent if they end up not liking the product when they receive it. This also boosts customer bases if a new customer purchases and is happy enough to return again as a regular customer.

Cart size / value

Many websites now offer free shipping for orders over a certain price naturally, but this can also be done in voucher form. Whether offering it as a new one time service, or lowering the existing minimum price with a one time code offering free delivery or even other deals such as free gifts when a certain amount is spent can bring in new and old customers alike. It can even boost the overall value of each individual sale as many will be willing to pay that little extra to receive the deal, after all if they were going to pay the difference in shipping, why not get an extra item for the money they would save and get their order to them for free?

Customer loyalty

Vouchers offered to long standing customers can be crucial in building up relationships with them. Giving out codes after a month, six months or even a year after their first purchase can make a customer feel cared about and the specialised thank you sentiment of the voucher will make their service as a customer feel valued. Creating this feeling for a customer can help them to keep coming back and using your store, since they get rewarded for doing so. Which will in the long run increase revenue to your ecommerce store due to the continuous sales they would produce.

Exit / long term browsing

Targeting people who appear to be unsure can also be done with a voucher. Setting up a popup that appears when shoppers try to leave the page or spend a large amount of time browsing the site or same few pages can grab their attention. Putting a deal on this pop-up may entice the people leaving back to the store and help the people browsing for long periods of time make the decision to purchase. As the issue may in fact be that they like the look of your products, but aren’t sure if they are worth the price. A deal can help make the purchase a little bit more worthwhile and even gain them as a long term customer if they are pleased when their order arrives.

As well as having a positive effect on the customer base, financial situation and identity of a brand coupons can also help a company understand their customers better. This is because coupons and their usage can be tracked, this can help business gauge what their customers actually interact with and want to see as well as what they ignore and do not use. Information like this can then be used to tailor the shopping experience for customers and build up their loyalty even more leading to a strong and successful brand.

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