Starting Your E-Commerce Store: Using Coupons and Sales Effectively

UsingCoupons&SalesEffectively

This is our sixth installment in the “Starting Your E-Commerce Store” series. Check out the intro here, part two (on payment gateways and merchant accounts) here, part three on building a better shopping cart, part four on converting window shoppers, and part five on detecting and preventing fraud.

Everyone likes a good sale, but too many sales can be bad thing, particularly if you’re the merchant. If you constantly cut your prices, your customers will wonder if you’re charging too much to begin with. Or, if you run sales for first-time orders in order to build a loyal customer base, you find that many people are more interested in the sale than in being your customers.

Coupons don’t make things any easier. Creating effective coupons can be difficult, and keeping track of them is a chore, particularly for coupons that were intended to be used for a limited time, or were supposed to be only available to a limited audience.

An effectively designed, written, and deployed coupon or sale can help your e-commerce site grow from a hobby to a full-time operation. But a poorly timed, badly written, and ineffectively shared coupon or sale can be ruinous to your business. If a sale or coupon is too successful, it can overwhelm your business and cause you to lose thousands of dollars. And if a sale doesn’t work, you’ve wasted considerable staff time, and maybe advertising dollars, on promoting something that didn’t motivate new sales.

But designing coupons and sales doesn’t have to be a chore, or guesswork. Here are a few tips to creating coupons and sales that work.

Measure Everything

No one likes wasting money. And while even you might not think of a sale or a coupon as a business cost, you’re essentially turning over some of your profit margin in order to increase sales. But like any business investment, you need to measure the effectiveness of sales and coupons.

Using Google Analytics, or a similar powerful analytics program, you can determine just how effective your sale or coupon at converting site visitors into customers. For example, you can use Google’s Custom Campaigns feature to see if a link to a sale in your monthly newsletter results in people clicking and buying. Or you can determine whether a flash sale on your site generates new customers.

Make Better Coupons

While analytics will help you measure whether your coupons work, there’s still a degree of creativity that goes into creating good coupons. While we all know the basic types of coupons—buy one get one free, fifteen percent off your purchase, and the ubiquitous free shipping coupons—there are other things you can try to get the most out of your coupon strategy. Here are a few quick suggestions:

The Coupon for a Friend—Instead of giving your customer another coupon, which sets expectations that there will always be a coupon ready for them, try giving them a coupon that they can pass on to a friend to increase the value of their own coupon. For example, the first coupon could be worth five percent off, but if a friend uses it, she gets five percent off and your customer gets ten percent off. If your customer is particularly active on social media, or has their own blog, they might promote their coupon on their own platforms, so you’ll also get the advertising benefit. With analytics, you can even determine who your best customers are, so you can reward them with even better coupons in the future.

The Coupon as a Conversation Starter—If you follow your site analytics, your accustomed to window shoppers, people who visit your site but never purchase something. Using analytics, you can set up a coupon that will be delivered to your customer after the visit the site a third, or fifth, time. In effect, you’re using a coupon as a way to engage reluctant customers.

The Coupon in a Hurry—Another strategy you might try is the flash coupon, which asks select customers to make their purchase in a matter of minutes, hours, or days. After a customer makes a purchase, for example, you can send them a great coupon that has to be used by the weekend to encourage them to buy more.

Try New Sales

We know most of the best sales techniques out there, but there are a few things you can do to the shake up your approach to sales. Here’s what we like:

The Daily Sale—Daily sales give you the opportunity to reach out to longtime and new customers alike. By limiting your sales to a single day, you’ll reach those customers who want to take advantage of a particular deal, and you give an incentive for your most loyal customers to visit your site and share the sale with others.

Targeted Sales—With Google Analytics, you know a lot about who is visiting your site. With a targeted sale, you can use that information to your advantage. If you sold a customer one product two weeks ago, you can put a similar product, or perhaps a companion piece, on sale the next time they visit.

Secret Sale—Everyone likes a secret sale, and you can use them to drive a lot of traffic to your site in a short time. Even better, you can design the sale to expire after a certain number of hits, so you won’t find yourself overwhelmed with orders.

By experimenting with sales and coupons you’ll be able to bring in new customers and keep your existing customers loyal. Measure your results, refine your strategies, and be alert to the latest sales trends, and you’ll be able to grow your revenue and customer base without wasting it on sales and coupons that don’t work.

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Photo by I See Modern Britain

2 Responses to Starting Your E-Commerce Store: Using Coupons and Sales Effectively

  1. Cameron says:
    July 29, 2013 at 12:46 pm.

    You made a typo in the first word of the phrase: Of, if you run sales for first-time orders in order to build a loyal customer base, you find that many people are more interested in the sale than in being your customers.

    Should be “Or, if you run sale for…”

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