Vouchers are known to be a strong incentive for a purchase, because they give the feeling of saving money. In e-commerce, there is much to be said for the use of voucher codes: With the help of voucher marketing, online shops increase the conversion rate, boost the customer acquisition and strengthen customer loyalty by creating positive moments (peaks). However, to ensure that vouchers do not become wasted money, there are a few strategic considerations to consider.
To anticipate this: With the right approach, online shops do not miss out on sales that they would have achieved without vouchers. The solution to this problem lies in the targeted individual displaying of incentives that are based on the needs of the shop visitors (keyword: customer focus). In this way, only those shop visitors receive vouchers who would abandon the shopping cart without the voucher. A win-win situation for shop and visitor, minimizing risk and maximizing benefit. This is made possible by an algorithm that recognizes when and why a shop visitor cancels the shopping cart in order to subsequently transmit the appropriate incentives. Learn here how exactly the uptain® ALGORITHM works to understand your shop visitors.
In this blog article we answer the questions
- why online shops use vouchers,
- with which goals online shops use vouchers,
- what to pay attention to in voucher marketing and
- why there is only one possible target group for incentivising with vouchers.
Optimize your own shop performance with vouchers
Use vouchers to save money: From a customer perspective, the appeal is obvious. What many don’t have on the screen right away: If you take a closer look, coupons offer shop owners at least as much appeal. They have a positive effect on shop performance on many different levels.
1) Vouchers increase the conversion rate
Online merchants invest a lot of money in marketing to attract potential customers and direct them to the website. This makes it all the more annoying when interested visitors abandon a filled shopping cart. This leads to ineffective marketing investments and a low conversion rate.
Targeted displayed vouchers prevent shopping cart abandonment by only offering the prospect of a voucher to those who abandon the shopping cart and actually want to leave the website because of a price perceived as too high. With the recovered abandoners, online shops increase their conversion rate and return-on-investment (ROI).
2) Vouchers increase the customer acquisition
As an incentive to buy, vouchers are also suitable for acquiring new customers. Hesitant shop visitors with a rather higher price sensitivity are given the optimal incentive tailored to them to successfully complete the checkout process. If the main focus of an online shop is on the aspect of winning new customers, it can exclude existing customers from the use of voucher codes.
3) Vouchers strengthen customer loyalty
Finally, vouchers strengthen customer loyalty. The reason for this is the moment perceived as positive by the shop visitor. This psychological phenomenon is also called the “peak-end-rule”. With the help of an experiment, psychologists Barbara Fredrickson and Daniel Kahneman proved that it is mainly positive moments and the end of an event that are remembered. If vouchers are now displayed to price-sensitive abandoners with the help of an algorithm, their needs are directly addressed. This creates a positive moment that is remembered according to the peak-end-rule, thereby strengthening customer loyalty. Read more about how to use the peak end rule for your online shop.
What do online shops use vouchers for?
Online merchants use voucher codes to create incentives for a desired action. Before an online shop uses vouchers, the objectives should be defined. What action should the recipient take? Do you want to create incentives for a purchase? Should leads be generated solely by the prospect of discounts? Should the shop become better known? Or does an online shop pursue several of these goals?
- Vouchers as an incentive for a successful purchase
A prospective customer finds your online shop, adds items to the shopping cart, but ultimately does not buy. The desired action? The transaction! The voucher should motivate the visitor to buy products. From a marketing perspective, the use of vouchers as an incentive to buy is undoubtedly effective: 54% of those surveyed in a study on the subject of vouchers stated that they had already bought a product at some point simply because they had a free voucher available.
- Vouchers as an incentive for lead generation
A visitor is in your online shop, has no products in his shopping cart and wants to leave your website. The desired action? Another visit and even more interest! The voucher incentivises the newsletter subscription and thus boosts lead generation. Online shops can thus attract subscribers to their newsletters and subsequently provide them with suitable content on the one hand and create buying incentives through the voucher on the other.
- (External) vouchers to increase awareness
In addition to the vouchers that are displayed by the online shop itself (for example, in the form of e-mails or exit intent popups), there are vouchers that a prospective customer can find on external platforms. Such voucher portals do indeed make online shops better known. However, customers may search specifically for vouchers before making a purchase, so that online merchants actually miss out on sales in such cases.
The only target group for vouchers: price-sensitive shopping cart abandoners!
Incentives should motivate the recipient to perform an action in the sender’s interest. For vouchers in e-commerce this means: The sender (online shop) wants to motivate the recipient (shop visitor) to complete the purchase or to subscribe to the newsletter. But what if the potential recipient has a different need and therefore needs another incentive to perform the desired action?
In this situation, the shop visitor may have a need for service. The appropriate incentive in such cases is consequently the reference to the own service. Voucher marketing therefore unfolds its maximum benefit when it focuses on price-sensitive shopping cart abandoners:
- To prevent vouchers from leading to missed sales, they should only be displayed to shop visitors who want to cancel their shopping cart. If vouchers are played out indiscriminately, of course those visitors who would complete the purchase anyway will also take advantage of the discount. Therefore: Focus on shopping cart abandoners.
- In addition, it is advisable to use vouchers to persuade only the price-sensitive among those who abandon their purchases to complete them. Otherwise the voucher would not be a real incentive to buy. Shop visitors, for example, are often in need of service. In this situation, vouchers simply do not give them the right incentive with their need for service because they do not address the need. Therefore: Focus on price sensitivity.
Often neglected detail: the input field for voucher codes
Now that it should be clear when and how online merchants best use vouchers, a neglected important detail must be addressed. Arriving at the checkout, the customer looks for the input field for the voucher code received, which should be easy to find.
One of the best practices in voucher marketing, however, is not to place the input field too prominently. By that customers who want to complete the purchase without discount and are in the checkout do not get the impression that vouchers are common for the online shop. In this way, online shops prevent the visitor from canceling the checkout to explicitly search for vouchers.
Control the use of vouchers through conditions!
The targeted use of vouchers brings a good deal of control to voucher marketing. But there’s more to it than that: by setting conditions, online shops can control the voucher display down to the smallest detail. Thus, own experience and objectives can be integrated into voucher marketing. Some of these conditions are:
- Shopping cart value: This condition determines the shopping cart value from which an online shop displays a voucher code to the shop visitor.
- Minimum order value: The minimum order value should be neither too low nor too high. If it is too high, the shop visitor will not complete the purchase. On the other hand, if it is too low, the voucher is not worthwhile for the shop.
- URL: Online shops can also specify the URLs where exit intent popups with a voucher code may appear. If an online shop wants to use this condition, it can include or exclude URLs.
- Referrer: For some online shops, the referrer can also be crucial for displaying voucher codes.
Here are some simple examples to illustrate the relationship between experience, objectives and conditions:
- If an online shop only wants to acquire new customers, it excludes its existing customers.
- On the other hand, if an online shop wants to increase the value of the shopping cart, it will in this case specify a high minimum order value.
- If an online shop only wants to give vouchers to shopping cart abandoners from a particular campaign, it will include the referrer in the conditions.
- If certain referrers are to be excluded for branding reasons, the online shop will exclude them in the conditions.
Intelligent voucher display with uptain
In order to specifically address price-sensitive shopping cart abandoners with vouchers, a specialized algorithm is required as a basis. This algorithm recognizes if and why a shop visitor cancels the shopping cart and then uses a suitable incentive to persuade him to complete the purchase.
The incentive adapts to the individual reason for the abandonment and is played out to the shopping cart abandoners with the help of personalized abandonment mails and exit intent popups. If desired, the shop owner can set the conditions in the dashboard, giving him full control over the voucher display.
Based on website information and visitor and environment data, uptain® ALGORITHM calculates whether the shopping cart abandoner is price sensitive, for example. It is obvious that a middle-aged shop visitor with a very good income will have less interest in a voucher than a young student with a low income. The uptain® ALGORITHM calculates exactly these characteristics based on the available data.
By intelligently displaying voucher codes, online shops create the right incentive for price-sensitive shop visitors. However, this incentive should not be considered in isolation, as the needs of non-price-sensitive shop visitors also deserve consideration. Such a customer-centric approach achieves the best possible success.