With great deals, comes great responsibility

Posted on Apr 19, 2012 · 4 min read

According to a report from Coupons.com, “digital coupon users shop more frequently and spend more heavily, at almost 50% more annually, than the average shopper.”

If you aren’t immediately trying to figure out how to uptick your coupon code use on your website after reading that, you might be in the wrong business.

“But wait”, I hear you say, “When we try and offer digital coupons, the results are painful!” Yes, coupon codes these days can go viral within minutes of being published, and the customer response to a really compelling code can break a website or more tragically, an entire business.  Some of you actually want your coupons to go viral, but the problem with just flinging the discount out there and hoping for the best? You lose the ability to target the market you want to reach. The pain of that ROI can reach crazy levels. So it’s not just about protecting the coupon codes so that they go to the right people. It’s just as important to protect them so that the right people are the only ones who use them, and you can track them.  Am I right?

So your choices are:

  1. Offer a discount small enough that should it go crazy viral, it won’t hurt you too much.
  2. Forget the whole idea of offering coupon code discounts altogether.
  3. Have your customer service team individually verify each order to avoid as much fraud as possible.
  4. Sink a ton of IT time into piecing together an in-house verification solution that sort of works most of the time.
  5. Or, find a third party service that helps with those verifications.

Not great choices, I know. But let’s revisit that data one more time. Consumers who use digital coupons spend almost 50% more than the average shopper. Who doesn’t want /that guy/ as a regular customer?

So you can’t afford NOT to offer a discount at this point, can we agree on that? Good, so let’s take number 2 off the list and deal with the four choices left.

Offer a tiny discount. If the offer isn’t compelling, the number of people who will take advantage of it plummets. Match the small discount with a difficult coupon code redemption process and you’re better off never offering anything to begin with. Cross that one off the list.

Verify identification internally. This and the honor system is pretty much the SOP right now. But there are so many ways to game the system as a consumer; you’re almost guaranteed to lose money based on customer service time costs and customers not following up with the additional information needed. That ends up being a double whammy of lost sales and a bad customer experience.  Another two crossed off.

Third party services. They are out there. Some of them work better than others, and you really have to know what your needs are before you contract for services, but here are some of the pitfalls you have to watch for.

  1. Some of the verification services are basically affiliates. You’re banking on their ability to market your product correctly to their customer base. And, their customer base is always going to be smaller than yours.
  2. Some services can only verify if they sign up for – and in some cases pay an additional fee to belong to – an additional membership. I don’t know about you, but I don’t want to force my customers to pay extra just to have access to my discount. Where’s the savings there?

locked shopping cartFull disclosure, our own SheerID system is obviously my favorite option as a third-party service.  We act as a bridge between your shopping cart and any secure database. As that bridge, SheerID verifies if a customer qualifies for your discount. It all happens in a fraction of a second. It’s all very cool, trust me on this.

So there it is in a nutshell.  Well, three or four nutshells, really.

Discounts matter. That’s the point here. And you, as a marketer, need to find the best way to offer the perfect discount to the best-targeted market for your company. But know it comes with a price; be sure you’ve made the right decision to protect your company’s bottom line before alerting Facebook or Twitter to your 75% off discount for military personnel and their families.

You can do it!

Chelle Parmele by Chelle Parmele