E Commerce – The Real Impact of Coupon Codes On Conversion

If you manage an e commerce store you have to be concerned with conversion rates.  Are you maximizing every visitor to your store by encouraging, even compelling them to purchase your products or services?  This is a never ending process of measuring and tweaking.  One strategy that gets a lot of discussion is the use of coupon or promotion codes on e commerce stores.  Used properly it can have a positive impact on sales, but be careful it can also send visitors away from your site  as well.  Let’s discuss this a bit further.

E Commerce – The Real Impact of Coupon Codes On Conversion

It is so important to measure the effectiveness of any e commerce store, and allow visitors to tell (and some cases show) you how they are interacting with the site.  This information is critical to the site success and can mean the difference between failure and success online.

Note: If you aren’t measuring user interaction on your e commerce store or website consider Clicktale (reviewed), or this tool.

What Type of Store Do You Have?

High traffic sites like Amazon are another story, this post is written for the small business owner with a novelty ecommerce store.  The one I operate sells the ACT! by Sage Database Software, but yours might sell crafts, house pet supplies, or collectibles.

Upside of Using Coupon Codes Properly

Used correctly coupon codes can increase conversion.  Here’s what I mean:

• Tell them the code on page.  By giving them the code just above  (or in close proximity to) the coupon code box on the page, they can apply it right away.  Be sure to tell them what will happen if they choose to use it or not. “Use Code BARGAIN to save 10% on your purchase, TODAY ONLY! Otherwise standard pricing applies.
• Send a Promotion to Email List.  This approach works well, and serves as a reward to your Subscribers Only. As you know I’m a big fan of list building, this is a huge asset to your online business.  Sending a promo to your list,
  “Today Only My Subscribers Get ABC Product at 50% Discount when using coupon BARGAIN upon checkout.  But Hurry, only 50 Available!”

Why Having A Standard Coupon Box On Your Store Might Be a Bad Idea

It’s really simple.  Think of your own shopping habits online (if you shop online), if you see a coupon box, what action will you take to see if you are eligible for a better price?  Hint: Goes something like this…

• Goto Google.com
• Search ‘coupon for [insert product name]‘
• Troll through the results page, then either:
  • Buy from someone else
  • Decide to complete order on your page, but phone rings, or message comes in (distraction), and never get back to completing the purchase.
• Sale lost (frown)

The presence of the box encourages visitors to search, and then they often never return. When I realized this, I removed the box from the store right away, and only put it there now for specific promotions.

FYI: It is important to understand the capabilities of your e commerce platform especially when it comes to using coupon codes.  Some stores only allow coupon boxes on certain pages, others are more flexible.

Social Equity Benefit

People like good deals.  People often remember those who lead them to good deals.  By giving them the coupon code on page, or as a subscriber, chances are customers are going to be more endeared to you.  I call this social equity.  In the age of the social web and social search this value cannot be under estimated.

Importance of Measuring

Google analytics is great, but it doesn’t offer much in the way of real time. Here are two tools that I’ve had great experience with for measuring real-time video (mouse movements and more) recordings of visitor interactions with your site.  They are, in a word, amazing…

• Tool #1, did a complete review found here.
• Tool #2

Use whatever tool necessary for you to measure effectively, but use something.

Final Thoughts On Using Coupon Codes

If you use coupon codes, think it through, and more than that measure what you are doing so you know if it is working.  Throwing up a coupon code box blindly because it seems like the right thing to do might help, but it could very well hurt your business with lost visitors and lost sales.

Thoughts? Ideas? Feedback? Chime in below.
Photo Credit: orinrobertjohn