5 Tactics for Using Email to Optimize Online Coupon Distribution
For two years running, BlueHornet's market research has shown that the primary reason consumers sign up for email marketing programs is to receive discounts. This presents a significant opportunity for marketers to engage with current and prospective customers simply by using email to send consumers the discounts they want.
However, couponing without a strategy, especially when done at a frequent cadence, can backfire. In addition to the obvious risk that coupons can easily cut too far into your margins, customers may become conditioned to wait for a discount before making purchases. Done poorly, couponing can even lead to brand devaluation, particularly for high-end or exclusive brands.
These risks don't mean you should avoid couponing altogether, or even that you should send coupons less often. They do mean that even though emailing coupons may make your customers happy in the short term, they may not be smart for your business over the long term. What you need is a sound couponing strategy and an optimized, tactical plan. Here are a few important questions to consider when creating your email couponing program:
- Do you want to drive offline or online redemption through your email campaign? Email can be used to distribute discounts that can be redeemed only in-store, only online or in both channels. BlueHornet's 2013 Consumer Views of Email Marketing report, a survey of 1,000 U.S. consumers conducted in February, indicated that nearly 75 percent of respondents were extremely or somewhat likely to pull up a coupon on their mobile device to redeem it at the point of sale. So if you have the infrastructure to support and track in-store redemption of digitally delivered codes, you should do it. For many marketers, the question is less about infrastructure and more about the effectiveness of the campaign. Email campaigns focused specifically on driving online sales allow for immediate direct response from the recipient, who is already online when they receive the offer. For this reason, I recommend that every email couponing program allow for easy online redemption.
- Will unique coupon codes or generic codes be more effective? It's amazing how quickly a generic coupon code (e.g., "SAVE20") distributed to every subscriber can find its way onto the web. I've spoken with marketers who tell me that this viral effect has helped their business. I'm sure that's true, but at what cost? Ironically, the inability to track generic code redemption back to the marketer's campaign makes the question nearly impossible to answer. I advocate using coupons to engage and reward consumers who are positioned to remain long-term brand fans. As such, I usually advocate sending your most loyal subscribers unique codes rather than generic ones.
5 tactics for unique coupon distribution
With a strategic foundation in place, it becomes much easier to identify the tactical components of your coupon program. Here are five tactical tips, each geared toward using email to more effectively distribute unique coupon codes for online redemption:
1. Give a discount at sign-up. Email best practices recommend that marketers take advantage of the first 30 days of the relationship when engagement is highest. Why not go one better and take advantage of the first 30 minutes by sending a unique discount code in the subscriber's welcome letter? Whether you choose to promote the discount on the web sign-up form to increase acquisition or you let it come as a pleasant surprise in the welcome message, this is a fantastic way to provide immediate value. Furthermore, it's the perfect context — a thank-you for signing up, which minimizes the risk of creating an expectation for every email.
2. Consider distributing unique coupon codes in triggered emails. Welcome messages aren't the only triggered emails that can offer effective coupon distribution opportunities. Triggered emails are deployed when a consumer takes a certain action (e.g., signs up for your email program, abandons a shopping cart). Often, you can map your discount strategy according to similar criteria. If so, it may make sense to send a coupon code at that same time.
3. Make online redemption quick and easy. Don't expect your customer to transcribe a multicharacter coupon code onto a piece of paper and type it into a field on the payment page. Improve conversion rates and ensure ease of use by inserting unique codes directly into the body of the email, making them easy to copy and paste.
4. Leverage email's top capabilities — targeting and testing. Targeting and testing are two capabilities that make email so effective at increasing revenue. Tap into both to increase the value of your couponing program. Do tests show that customers who spend more than $100 per visit (on average) respond more often to a percentage off discount, while those who spend less than $100 like a flat dollar amount savings? Test it and apply your learning to a targeted discount strategy.
5. Mobile email means mobile offers. According to BlueHornet's February 2013 research, email-enabled mobile device usage is up 8 percent over last year. Nearly 85 percent of respondents now own such a device, and 43 percent report reading email most often on their mobile device. This means that email is becoming a mobile marketing channel. As a first step toward optimizing for mobile, make sure that your coupon emails are easy to view and engage with on small screens. As your program advances, consider ways to distribute offers that are valuable to subscribers who are on the go.
When it comes to distributing offers or coupon codes via email, marketers don't need to sacrifice strategy to maintain convenience, reach and speed of execution. By foregoing generic codes for unique ones and by setting goals for online redemption, email marketers can position their programs to take full advantage of the digital marketing technologies that dominate today's email marketing landscape.
Susan Tull is the vice president of marketing for BlueHornet Networks, an email marketing service provider.