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.