Coupon Codes Can Kill Conversion
Speaking of coupons, I once read a Marketing Sherpa case study demonstrating that the inclusion of a “coupon code” field in your checkout process actually hurts conversion pretty significantly. If you think about it, calling out out the fact that a little research could save your customer money entices them to leave your site in search of the deal. Inevitably, some don’t come back to hit submit; and if they do come back, many do so with a coupon nailed right to your top line. Again, these are people that were about to purchase anyway –it’s like you want them to be jerks. :) But seriously, I’m amazed every time I see coupon codes featured heavily on GoDaddy and other big sites that should know better.
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Tags: Business, Coupon Codes, Coupons, E-Commerce, GoDaddy, MarketingSherpa, Online Marketing, Technology
April 27th, 2007 at 7:31 am
So true. Every time I see a coupon code on a site I figure it’s worth a second of my time googling to get a deal. More than once I have found more compelling offers (when you’re on fatwallet anyway you may find a better deal from a different retailer).
I like the ability to use coupon codes, but I think they should be in the form of a special URL embedded in an email or something that won’t disrupt the purchase process for those not receiving discounts.
April 27th, 2007 at 11:46 am
I won’t answer the “they go away and don’t come back” angle, but in response to “they go away and come back with a coupon”, that’s a well-known economic principle called price discrimination. Price discrimination is the reason you still get mailers with coupons after all these years, even though you’ve never ever used one. Coupons are profitable for businesses, even though it costs them money to send them and most coupons go straight to the trash. It’s a counter-intuitive principle, from the consumer’s perspective, but it makes a lot of sense to the economist.
http://ingrimayne.com/econ/Monopoly/PriceDiscrimination.html
April 27th, 2007 at 12:24 pm
It’s really common-sense, but not common-practice. Firms need to spend more time on their checkout process. The online checkout process is a metaphor for the real-world checkout process. There are differences between the two, to be sure, such as the likelihood of abandonment is much higher with a virtual checkout, but the same principle holds: the customer was going to buy the thing anyway — with or without the coupon, most likely.
Work on the checkout navigation. Common-sense, but not common-practice.