More people shop online today than ever before. A study by Big Commerce shows that 96% of people in the United States shop online. In fact, most people spend an average of five hours per week shopping online.
If you have an ecommerce store, this likely doesn’t surprise you. In our go, go, go world, online shopping is convenient and gives us more time to spend doing things that matter most to us.
Yet, many e-commerce stores struggle to make a profit. Why is that?
Why E-Commerce Stores Struggle to Thrive
As more people lean on the convenience of online shopping, it might seem like a great time to start or grow your e-commerce business. However, many stores struggle to make any sales at all, much less enough to pay for the marketing, development, and expansion required to thrive in a competitive market.
Why is it so hard to be successful in the e-commerce industry?
Because the competition is incredibly fierce.
In 2014, RJMetrics reported:
There are approximately 110,000 ecommerce websites generating revenue of meaningful scale on the internet.
Keep in mind; this study only looked at slightly successful e-commerce brands.
In addition, your e-commerce store is competing with big brands like Amazon, Walmart, and even Apple.
Most recent e-commerce trends show the market will only get more competitive. If you want to stand out among the growing competition, you need to focus on building relationships with your customers. Coupons are one way to do just that.
Stop fighting a losing battle by competing on price. There will always be someone who will sell the same product for less. What they can’t replicate is a real, human connection.
Here is how to create real connections with your customers using coupons.
Grow Your Email List
Email is one of the most powerful marketing channels for one simple reason — it’s the only marketing platform where you own the connection. You control what your audience views and when they view it. You can even design email marketing campaigns for unique user segments, so each email is personalized to your user’s past behavior.
Unlike Facebook and Instagram, which use algorithms to decide what content their audience views, with email you can reach your customers directly and build a real, human relationship with them.
To build this relationship, entice loyal or prospective customers to sign-up for your email list by offering them a coupon in exchange for their email address.
Then, you can send them relevant, useful, and targeted emails about:
- New product launches
- Free resources, like ebooks or PDFs
- New blog posts
- Related products
- Tracking information
You can also create an introductory drip campaign, sending new signups an email every few days sharing your favorite products or introducing them to your team.
The most important part of email marketing is to respect their inbox and use the opportunity to build a real relationship with your audience. Avoid sending one sales email after another. Show your newsletter subscribers who you are as a brand. Show them how your brand is different from competitors.
Build Customer Loyalty
By some measures, it costs 5x more to earn a new customer than it does to keep your current customers. And yet, most e-commerce businesses focus more of their resources on customer acquisition than on retention. In the hyper-competitive world of e-commerce, focusing on customer loyalty is a simple way to stand out.
“In the hyper-competitive world of e-commerce, focusing on customer loyalty is a simple way to stand out.”
Coupons can build customer loyalty and keep current customers happy in several ways:
- Sending a coupon for a percentage off their next purchase, enticing customers to buy again.
- Sending an email to customers who abandoned their cart, encouraging them to complete their purchase.
- Offering a spend limit coupon (10% off a $125 purchase, for example) to increase average sales.
- Offering customers free shipping if they spend a certain amount.
Here are a few other ways to build customer loyalty.
Learn More About Your Customers
A recent survey by Hawk Incentives found that 92 percent of online shoppers “always” look for coupons. Leverage this by offering your customers a coupon in exchange for information about themselves relevant to your business.
It is a win-win; your customers are happy they got a discount, and you can better serve them.
Woobox’s coupon feature allows you to make custom coupons. You can ask for information such as an email address, age, or ask for follows on social media.
You could use a coupon code as a thank you for participating in marketing research, such as completing a survey. Or, you could use a coupon code as a reward for entering your photo contest or sweepstakes.
Educate Your Customers
As mentioned above, e-commerce customers look for coupons when shopping online. You can use coupons as an incentive to share information about your brand or a specific product. Educating your customer will result in a stronger relationship and more relevant leads. In some cases, it might also reduce the time to conversion or length of your funnel.
For example, you could:
- Offer a coupon code in exchange for email, then send a drip campaign about your most popular product and the cool ways customers use it.
- Use the password feature to create a YouTube contest. Ask your audience to watch a promotional (brand) video, then enter the password mentioned for a chance to win a grand prize. Give all other entrants a coupon code.
- Offer a downloadable guide with a unique coupon code embedded for readers.
- Invite customers or prospective customers to a webinar and offer all attendees a coupon code.
- Share a coupon code on your podcast or an affiliated podcast.
Myths About Coupons
Still not convinced coupons are the right choice for your brand? A lot of myths still surround coupons, which can make many businesses and brands hesitant to try them. It’s understandable, but ‘coupon’ is no longer a dirty word. Savvy online shoppers expect them, and smart e-commerce owners are learning how useful they can be. If you want to compete in the e-commerce market, now is the time to start using coupons.
Here are a few myths about coupons you might still think are true — and why they aren’t.
They Will Attract Too Many Bargain Seekers
Some business owners worry that coupon users aren’t brand loyal. They fear offering coupons will bring in people who are just looking for a deal but who will never come back.
In some cases, this might be true. The key is to offer targeted, relevant coupons to people already in your target audience.
Coupons can boost customer happiness, inspire loyalty, and even help clear out slow-moving stock. The coupon game has changed, and e-commerce customers expect coupons.
Coupons Won’t Work for My Niche
Coupons will work for most e-commerce niches. Favorite brands like eBags, Zulily, Groupon, and Michaels Craft Store all use coupons to drive sales and increase loyalty.
In fact, a study by Retailmenot found that 96% of Americans use coupons. If you aren’t using coupons, you’re missing out on one of the most effective ways to grow your e-commerce business.
Giving a Discount Will Decrease My ROI Too Much
A recent study looking at over 4,000 e-commerce brands found that most brands spend between $16,200 – $121,500 per year on PPC and SEO campaigns.
When planned and targeted correctly, coupons will increase your overall revenue and decrease the amount you have to spend on customer acquisition. For most businesses, coupons pay for themselves.
How to Create A Coupon for Your E-Commerce Store
Woobox is one of the simplest ways to create coupons for your e-commerce brand. Use the coupon feature to create customized coupon codes, set start and end dates, gather information like email addresses, and more.
Other features of coupons in Woobox include:
- Limit the number of coupons
- Share custom codes
- Track redemption
- Set age requirement
- Use Captcha protection
- Set country access restrictions
- Set required forms, like name or email
There are many other ways to create coupons, though they may not offer the same customization options as Woobox. You may be able to use your e-commerce platform, such as Salesforce or WooCommerce, to create a coupon. There are also several WordPress plugins that allow you to create coupons.
Coupons are no longer limited to the realm of extreme couponers and penny pinchers. Savvy e-commerce customers look for (and expect) coupons from their favorite brands. If you haven’t been using coupons, now is the time to start.
Key takeaways from this article:
- Standing out is hard in the competitive online shopping world, and it is only going to get more competitive.
- Customer retention is more cost-effective than customer acquisition; coupons are an effective way to keep customers happy.
- You can use coupons as an incentive to increase email sign-ups so you can build a real relationship with your customers and inspire customer loyalty.
- Woobox makes it easy to create customizable coupons for your customers. You may also be able to use your e-commerce platform or a plugin.