TheDealBay.com - 13 Strategic Ways Businesses Can Use Coupon Codes

Coupons
BY SCOTT GERBER on here
Jan 21, 2013
Scott Gerber is the founder of Young Entrepreneur Council, a non-profit that promotes youth entrepreneurship. The YEC recenty launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs grow businesses via live video chats.

The online coupon seems like a simple, straightforward way to increase conversions, but that’s not necessarily the case. Rock-bottom discounts (see: Groupon) can actually have a negative effect on a booming web business.

Instead of using coupon codes to spur sales at checkout, savvy business owners are finding ways to leverage discounts to track customers, build affiliate relationships and more.

A panel of successful young entrepreneurs shares the strategies that are actually working. Here’s what they had to say.

1. Retargeting and Cart Abandonment Strategies
Pablo PalatnikCoupon codes are essential to an ecommerce startup if it is in a competitive market. Business owners can use coupons wisely in their marketing strategies by retargeting with banners or shopping cart abandonment emails to lure shoppers back to a website. Nevertheless, if you want to build a sustainable business, never make discounted product your only value proposition. – Pablo Palatnik, TheDealBay.com

2. Distribute Through Partners
Pete KennedyHere’s how we’ve used coupons and special discounts with great results in our business: We provide partners with special discount offers they can distribute to their audiences. We set a time-based deadline or quantity-based limit. And we provide partners with commissions on sales, so they have an extra incentive to promote the offers. – Pete Kennedy, Main Street ROI

3. Track and Measure ROI
Phil FrostCoupon codes are an excellent way to track and measure your advertising ROI. Simply use a different code for each ad outlet (i.e. Google vs. Bing vs. Facebook) so you can see exactly how many sales each campaign generated. With a little bit of tech work, you can also use coupon codes to track — down to the keyword level of your search ad campaigns — which is critical for optimization. – Phil Frost, Main Street ROI

4. Reward Loyal Facebook Fans
On your Facebook fan page, you can offer coupons and discounts to your fans right through Facebook, or you can choose to use third-party apps. Instead of just offering a coupon to everyone, I think it’s neat to reward your most loyal fans, as one company called Earthegy does. The gemstone jewelry company offers discounts and promotions, but only to their top fans, which it determines through an app. – Natalie MacNeil, She Takes on the World

5. Track Revenue Sources at Events
Discount codes are great for tracking which sales channels are performing the best for you. For our Entrepreneurs Unpluggd events, we give our marketing partners unique discount codes to distribute, so we can see which channels refer the most sales and concentrate on optimizing those channels. – Tim Jahn, matchist

6. Encourage Action
Use online discount or coupon codes to offer discounts to the first buyers. This creates scarcity, so more people take action quickly and move forward with their purchase decisions. A scarcity component drives the people who may be on the fence to take the leap. – DC Fawcett, Paramount Digital Publishing

7. Customize and Learn
Many businesses make the mistake of simply using coupons to increase conversions. The bigger opportunity is to utilize them to also learn more about your customers’ behavior along the way. Create unique codes to be used through a variety of channels, create custom codes for partners and then test different discount formats to maximize conversions based on real data. – Anderson Schoenrock, ScanDigital

8. Use Coupon Codes in a Crowded Market
The problem with coupon codes is that you’ve jumped into the game of competing on price. That might not be a good strategy for service providers or those businesses with a unique product that is only distributed on their sites. However, coupon codes can be very smart for retailers that compete with other sites to sell the same items. An extra 10% off can make a customer choose your site over the competition. – Laura Roeder, LKR

9. Discount Coupon Codes Close Sales
Consumers today are programmed to find a deal, so discount coupon codes are a must-have for any online business. Our best coupon conversions come from a prominent tab labeled “coupon” on the left side of our homepage. When clicked, our email club sign-up form pops up. Customers can then submit their info. Shortly thereafter, they receive a discount coupon code via email. – Anthony Saladino, Kitchen Cabinet Kings

10. Ask and Ye Shall Receive
Late last year, we had pro athletes retweet a coupon code to their followers. Cumulatively, our discount went out to 2 million Twitter users. But our conversions from that campaign were less than our current strategy, which is to give a discount to anyone who asks. We encourage people to ask us for a code in our social media bios. Our conversions are higher when people ask, rather than us doing the asking. – Brett Farmiloe, Markitors

11. Perform Acts of Kindness
Give your employees a handful of discount codes in varying increments, and let them surprise customers with them. You can teach them to say: “We appreciate your business so much! You know — I’d like to give you $50 off your next order. Thanks for being such a great customer!” Acts of kindness like this go a long way toward building brand loyalty. – Robert Sofia, Platinum Advisor Marketing Strategies, LLC

12. Consider Customer Acquisition Cost
Never offer discount or coupon codes unless you understand the unit economics of your business. I’ve seen friends get buried by deal sites — not because deal sites are bad, but because the business itself did not understand its own unit economics. Before you offer any sort of discount, know your customer lifetime value (CLV), and whether offering a discount will pay off in the long run. – Sunil Rajaraman, Scripted.com

13. Collaborate With Affiliates
Want to encourage affiliates to market for you? Give them a coupon code they can give to their audience. When the coupon codes are redeemed, track the affiliate’s sales. In the end, users get discounts, your affiliates get commission and you get new customers. – Sean Ogle, Location 180, LLC

Ghana coupon site TheDealBay.com