How coupon codes incentivize every stage of customer journey

Talon.One Writer

Content Team

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Are coupon codes a key part of your promotion strategy? If not, it’s time to refine your approach.

Coupons are powerful tools for driving customer acquisition, boosting retention, and reactivating inactive shoppers. But launching a successful coupon campaign requires careful planning.

What makes an effective coupon strategy? How should you handle security, tracking, and budget limits? And what’s the best way to communicate or display your coupons?

To help you get it right, we’re sharing best practices from businesses that have successfully implemented high-performing coupon campaigns.

‍Customer Acquisition: On-site coupons

If gaining new customers is one of the goals of your promotion marketing, try using on-site coupons. You can show them directly on your website or in a “Special Offers” section.

The following insights help you get the most out of your generic coupons:

Make coupons time-sensitive. Setting an expiration date for coupons creates a sense of urgency, encouraging visitors to your website/app to utilize them ASAP.
Set a budget for your campaign. The important thing to consider when creating generic coupons is to ensure that there is some secondary characteristic that will ensure the number of redemptions is limited in some way. In Talon.One, you can simply set a budget to restrict the number of times a coupon can be redeemed or max out at a certain currency figure.

Example: Happyfresh RM30 voucher

Source: Happyfresh

Happyfresh uses on-site vouchers (30 Malaysian Ringgit and 40 Malaysian Ringgit) for an order of minimum 180 Ringgit in order to increase customer interacts, raise brand awareness and boost sales. Their coupon strategy works because:

Additional coupon details clearly communicate the offer (products involved, time frame, terms and conditions)
Coupon code is available for anyone who visits Happyfresh website
30 Ringgit and 40 Ringgit coupons are great incentives for a 180-Ringgit minimum order.
Time-sensitivity pushes customers to make a purchase during their first visit to make the purchase faster.

Customer Retention: In-App Coupon

Customer retention is no joke these days and most likely one of the top priorities of your promotion strategy.

“Increasing customer retention rates by 5% can increase profits by 25% to 95%.” Harvard Business Review

A simple referral program is a great idea to boost customer retention while also increasing customer loyalty.

Example: Uber In-App Mobile Referral Coupon

Source: Uber

As part of their market mix, Uber displays personal referral code in the app and enables users to share it directly in the app. The friend that gets referred can redeem the code when booking the first ride. Both the advocate and the friend are rewarded with ride credits. This referral scheme works because:

Rewarding the advocates incentivizes them to keep choosing your service over other companies
Discount on the first ride encourages new customers to try your service
It helps increase customer loyalty and customer base

Customer Re-engagement: Holiday/Event Coupons

Maybe you already have a solid customer base, but some of them haven’t been active in a while? Consider sending your inactive customers a promo code with a discount for their next purchase.

Example: Westwing Valentine’s day coupon

Source: Westwing

Munich-based home and living ecommerce company Westwing used unique coupon codes to re-engage inactive customers on Valentine’s Day. Westwing sent its target audience personalized emails, encouraging them to redeem their coupons for quality rewards.

The unique clock on their website showed the customer the time period to redeem the coupon was limited. The campaign boosted customer engagement because:

Email with an exclusive coupon is a great tactic to get in touch with inactive customers without being too pushy
A personalized email ensures a good customer experience by making the person feel valued
Images and creative email is engaging and relevant
Limited time frame incentivizes the customer to make the next purchase soon

Brand Loyalty: Personalized Reward Coupons

Is brand loyalty a priority this year? Then use email marketing to reward existing customers with a personalized reward that is redeemable only with a specific promo code. This is a great tactic to use a customer email address in order to ensure they respond to your sales promotions and choose you over the competition.

Example: Liebeskind Exclusive Birthday Coupon

Source: Liebeskind

Berlin-based fashion brand Liebeskind ran a coupon campaign in which they sent emails with a personalized coupon code as a birthday gift for loyal customers. A “Happy birthday” message is an opportunity to show how much you value your customers and increase brand loyalty. Why did their campaign work?

Personalized coupons work as an incentive for the next purchase
A birthday gift ensures a great customer experience and makes the customer feel valued.
A great customer experience makes your brand the customer’s first choice.

Which kind of coupon features do you need for your coupon strategy?

Now that you have some great ideas for launching a coupon strategy, you will need to think about implementation. Having the right coupon software is key to a successful coupon campaign. If you are new to the coupon game or want to level-up your strategy, the right coupon solution should have the following features:

Generic or random, personalized codes
Choose code length, prefixes, suffixes, case sensitivity
Coupon redemption limits
Time frame limits
Proper rule validation to ensure coupon security
Webhooks to trigger emails to customers by using third-party programs
Tracking and coupon redemption analytics

There is a wide variety of coupon tools on the market, but few offer a full range of flexibility for all use cases above. You should remember to choose your vendor wisely.

If you are at the “build or buy” crossroads and need a framework to assess the requirements for building or buying your promotion software, our white paper, "How to choose your loyalty & promotions software" is a must-read for you.

FAQs on incentivizing customer actions

1. How can I use coupon codes to engage customers at different stages of the journey?

Coupon codes can be tailored for different goals—on-site coupons help acquire new customers, referral-based in-app coupons boost retention, time-sensitive event coupons re-engage inactive users, and personalized reward coupons strengthen brand loyalty.

2. What are the best practices for running a secure and effective coupon campaign?

To ensure a successful coupon campaign, set clear redemption limits, time-sensitive offers, and budget restrictions. Use personalized codes to prevent misuse and track performance with analytics to optimize future promotions.

3. What features should I look for in coupon management software?

A good coupon management system should allow for personalized and generic codes, flexible redemption rules, fraud prevention measures, webhook integrations for automated messaging, and real-time analytics for tracking campaign success.