How to Effectively Use Coupons to Generate Revenue and Customer Loyalty?
Marketers will often face a time in the business cycle when it will make them ponder upon the decision to offer discounts, when to disperse them, and how much should it be. Providing discounts to the customers on your online store is one of thebest ways to generate revenue and customer loyalty. However, when this is implemented haphazardly, you can deteriorate your brand or worse, make it unprofitable. This article centralizes on the advantages and disadvantages of providing deals on your online store. Here are some of the ways you can make the best out of the discounts to generate customer loyalty and its effective implementation.
What is meant by customer loyalty?
It is referred to when your customers choose your brand over any other on the basis of the past interactions they have had with you. Customers prefer brands due to their consistent and good customer experiences along with providing high quality services. Many companies have customer loyalty programs in which they provide incentives and rewards to the frequent customers.
Centralizing on customer loyalty is profitable for almost every online retailer. When ascertained with the help of metrics on the basis of the number of purchases, purchase frequency, customer lifetime value, etc. customers become loyal to your brand for a long run. The most loyal ones become your biggest supporters, hence generating customer acquisition. You can generate the same via offers, discounts, and deals.
Advantages and Disadvantages of Online Store Offers
- It is easy and quick to operate on a native basis with relevant apps.
- It is easy to track with the discounts report of the relevant apps.
- It helps in generating and / or increasing the customer loyalty.
- It helps in generating and / or increasing customer acquisition.
- It helps in increasing conversions.
- It helps in moving stock as quickly as possible.
- It helps in meeting the sales goals.
- It leads to a decrement in margins and profitability.
- It can possibly damage your brand image.
- It leads to a decrement in conversions outside of sale periods
- It has the tendency to drive non-loyal shoppers.
- It also has the tendency to eliminate the average order size.
- It attracts the customers who are outside your target market.
Types of Offers, Coupons and Discounts
- Percentage based discount
This is a famous way to provide discount to the customers on the basis of percentage. This comprises incentive percentages like larger discounts to generate drive sales or significant percentages to liquidate the dead stock. This is also applicable to multiple collections, products and locations.
- Free shipping
Shipping costs are why many people don’t prefer shopping online. By offering free shipping helps in increasing conversions. You can also use free shipping discounts. You can also limit this very type for a certain group of customers like loyalty program members and such.
- Free gift
You can also provide a free gift when Nykaa sale is on, in order to provide additional value to the customers. If used wisely, it can also be used to raise the average order size.