Oh… Wait a Second… I Have a Coupon Right Here!
For many retailers online coupons are more than a great way to increase purchase intent. As Compete research indicates, if you want to promote and sell your product online, an online coupon is, for the most part, a requirement to any campaign.
One-third of online shoppers polled said they visit coupon sites while shopping online. And this is not a small audience. In fact, in this current economic environment, the number of consumers going to online coupon sites has increased. In April 2010, 35 million consumers visited coupon sites, up 5% from April 2009.
And how important are coupons codes?
In most cases, they make the sale. 57% of consumers who used a coupon code for their last online purchase reported they would not have made the purchase without the code! Without question we know that LTV begins with the initial sale…um, obviously…so smart marketers know that giving a bit of a discount can potentially yield long-term financial benefits.
Ah, and the psychology of couponing reveals higher ROI
Analysis of consumers who use online coupons show that even with a modest discount, consumers actually spend more per transaction than without a coupon. The research indicates the average consumer spends 56.5% MORE with a coupon online than those without a coupon. Again, when looking at the long tail of consumer purchasing, coupled with typical margins, any discount given on a purchase will easily be made up.
In addition to buying more, consumers who use an online coupon have a higher sense of satisfaction with the retailer. 92% of consumers who used a coupon report they had a positive shopping experience with a retailer versus 88% of consumers who did not use a coupon.
Coupons drive loyalty
Consumers who used an online coupon said they are more likely to buy from the retailer again when compared to those who did not use a coupon. Consumers who used an online coupon said they are 91% likely to buy from the retailer again, about 5% higher than the 86% likelihood for consumers who did not use an online coupon. So not only will coupons encourage higher order value purchases, but they also increase that consumer’s likelihood to purchase from that retailer again.
Coupons are easy
74% report using coupons because they are convenient and useful, while 26% say coupons take too much effort to find and use. Shoppers who are “older” (50-plus years) use coupons often and are more likely to use them to buy familiar brands and products, yet a significantly higher amount (32%) report that coupons take too much effort to find and use. Interestingly, shoppers are split when addressing the issue of whether coupons cause the brand decision or the brand decision drives the coupon search. Shoppers who report that coupons are “convenient and useful” are using them for items that they buy and re-stock often (e.g. paper products, cleaners, cereal). For items that have a larger repurchase cycle (e.g., furniture, electronics, motorcycles), coupons may not be as useful to the shopper unless they receive them at precisely the right time when they are considering a repurchase or close to a repurchase point.