Are you thinking of stepping up your product promotion strategy this year? You should consider using coupon deals. Generally, customers like anything that guarantees them a discount. No deal does the job better than coupon codes.
However, it requires more planning and research than simply building any old promotions. You need to think carefully about what will work best for you.
We wanted to get expert insights and so we approached CouponCause.com for them to shed some light on the matter. According to them, here’s what to know:
Dollar off or percentage off?
The first dilemma is: do you offer dollar-off or percentage-off? Some customers don’t really care whether it’s 30% off or $30 off. All that matters to them is the opportunity to save. So, you have to know which of the two coupon deals will benefit your business considering that both options have their fair share of pros and cons.
The wording really counts
In the mind of the customer, wording plays a very important role. For example, urging the customer to get 10% off or $10 off is not the same as asking them to save 10% or $10. They will look at the former as an opportunity to gain something extra and the latter as a chance to avoid incurring a loss. Naturally, a majority will go for the first option over the second. However, you should consider a percentage-off marketing strategy over a dollar-off approach if you are running something like a clothing or retail store. This is because it will encourage bulk buying. In this case, the customer will want to buy more so as to enjoy a significant saving percentage.
Think like the customer
Often, customers will go for dollar-off coupons because it doesn’t call for some much thinking or calculations. Not many customers are ready to get into complex math so as to save. Therefore, they would rather go for a coupon deal that guarantees them a certain amount of financial saving without having to stress over it. This statement is supported by a recent Blue Hornet study which shows that more than 42% of customers prefer money off deals. Those who prefer percentage-off coupons come at a distant second.
Having said that, you can’t ignore the few customers who are always looking for deals that offer them the largest saving percentages. Such customers are always cautious, so they only go for coupon deals that guarantee the most saving and not just because the deal is available. The bottomline is that a percentage off discount deal has the power to attract a customer who is willing to quickly calculate the amount they stand to save. As for those who are not ready for arithmetic, their best choice is dollar-off coupons.
Psychology plays a big role in the conversions
According to a recent survey, a majority of customers are intrigued more by the dollar-off deals than the percentage-off offers. The survey shows that the response for the dollar-off deals is higher by 72% than that of percentage-off deals. Consequently, for a business that targets more conversions, going the money-off route is the better option. This is because the customers think that they get more value in a dollar-off value than what they get in a percentage-off deal. It’s just psychology in play here. Of course, the willingness to calculate the discount also has a role to play. Since not many customers are willing to calculate the end discount, their better option is a dollar-off deal.
In some cases, percentage-off coupon deals prevail
In some distribution routes, you are likely to enjoy better conversions when offering percentage-off coupons than what you get when giving out dollar-off deals. The most notable ones are:
- During signup and newsletter subscription: For example, you are likely to convince a first-time shopper to register for a newsletter or sign up for a customer account if you offer them a 10% discount off their first purchase instead of $10 off.
- When clearing stock: At such a time, you need to do everything to encourage bulk selling. Considering that percentage discount deals promote more buying, you’ll be able to realize this.
- When you want to gain customer loyalty: When you have customers that you don’t want to lose, the best approach is to offer them percentage-off deals. This will motivate them to consider your brand whenever they want to save.
- When you want to promote first time sales: If you have a new product that you are introducing into the market, you may have to encourage bulk buying and this means offering irresistible percentage-off coupons.
- When you want to encourage minimum orders: This is also another approach to encouraging bulk buying. A customer who sees this pop-up coupon at the checkout after meeting a minimum shopping threshold is likely to go back to add more items to their shopping cart so as to enjoy a bigger percentage off.
Put your business interests into consideration
CouponCause.com is very adamant that none of the coupons is superior over the other. A dollar-off coupon may work in some cases and fail in others. Similarly, a percentage-off coupon may work for some businesses and fail in others. So, what you should you do exactly? The secret is to test the deals. You need to run separate campaigns for each coupon deal so as to see how your audience responds. The deal that gives you the better conversion and more sales is the better option for your business
Closing thoughts:
Economically, CouponCause.com experts argue that both coupon deals offer the same value to your business. Customers who like calculations will go for percentage-off deals and those who hate it will go for dollar-off options. In the long run, either option guarantees you conversions and improved sales. It all depends on what works best for your brand.
