Coupon or No Coupon: What’s Your Ecommerce Discount Strategy?

We’ve all had that moment of jubilation when a coupon code magically appears while we’re browsing items on an ecommerce site. Often, all it takes is an impromptu pop-up to convince us to move from passive browsers to active buyers.

That feeling of glee only increases when a discount code we’ve dug up on the internet actually works at checkout. How many times have we held our breath, just hoping it wasn’t one of the numerous fake codes floating around on popular third-party couponing sites?

In today’s ecommerce landscape, this insatiable need to snag a discount before placing an order speaks to the price-obsessed consumer mindset today. Shoppers all but expect an incentive to buy. The coupon code is no longer a nice surprise: it’s a given.

While it’s understandable that so many brands automatically offer a certain discount amount in exchange for a new customer’s email address, unfortunately, this practice has created a race to the bottom in pricing.

Although you may attract new traffic to your website and get a spike in ecommerce sales, constant coupons are hardly a viable strategy for building a long-term, sustainable ecommerce business that attracts loyal customers. But there is a time and a place for coupon codes if used strategically.

[bctt tweet=”Coupons are hardly a viable strategy for building a long-term, sustainable ecommerce business.” username=”getzaius/”]

If you do decide to offer discount codes to your buyers, they should be part of a thoughtful ecommerce discount strategy.

Earn the email address

For online stores that aren’t thinking about their repeat purchase rate, obtaining a customer’s email seems like a solid ecommerce marketing strategy. Building your email list is often a brand’s number one priority, and so, marketers may think it’s worth giving up a discount.

Yet offering a discount code to every visitor to your ecommerce website is a slippery slope. Not only is the repeat purchase at risk in these scenarios—so is customer loyalty. Do you really want to attract a customer base that shops only when there’s a sale involved?

Because repeat purchases and customer loyalty are so closely intertwined, you risk losing both if you encourage one-off purchases that only serve to get people in the door. Thankfully, there are other ways to earn a visitor’s email and add value to your brand without the incentive of a discount.

Take it from ecommerce stores like Mizzen+Main that rarely, if ever, discount specific products. Save for the odd one-off sale a year, the menswear fashion brand sticks to hooking new customers with their high-quality products. The anti-couponing message is clear: Mizzen+Main’s clothes don’t need discounts to convince customers that their purchase is worthwhile.

coupon form

No coupons here—unlike many ecommerce sites, Mizzen+Main purposely avoids one-off percentage discounts in exchange for users’ email addresses.

Instead, the company employs other incentives like free shipping on certain orders and a referral program to draw in repeat purchases.

The takeaway here? Don’t rely on bombarding customers with a pop-up coupon as soon as they arrive on your site. Yes, you want to create a customer experience that’s encouraging and friendly. But you also don’t want to make the first purchase seem like a given, especially if you want your brand to be perceived as high-value. Trust and loyalty should be earned in the ecommerce space, and so should a customer’s email address.

Take a strategic approach to discounts

It might sound like we’re completely anti-coupons, but the truth is we only shudder when they’re used carelessly. There are plenty of instances when discount codes can be particularly useful for brands. It all depends on if and how you approach discounting from a strategic outlook.

While it’s true that coupons can lead to an increase in customer happiness, constant discounts can also have a diminishing effect. Think about it: a discount is essentially admitting that your product is worth less than the price you have on your site today. Do you really want your brand to cater to price-driven shoppers who don’t value your product?

One approach to offering discounts while maintaining value comes from the skincare and makeup online store Glossier. This beloved brand gives its customers a certain discount amount on shipping, but not on specific products. Crucially, this strategy doesn’t alter the perceived value of their products to shoppers. And what’s more, Glossier’s approach even encourages upselling, thanks to a nifty progress bar and customized suggestions that highlight the free shipping deal.

There’s a lot to love about Glossier’s shopping cart strategy, from the gamification aspect of the progress bar to the friendly copy and personalized recommendations.

We’re also big fans of when brands like Scentbird create special deals that reward new customers for making a second purchase. This discounting tactic proves that they’ve thought through how to earn a customer’s loyalty and repeat business long-term.

Even though “I pulled some strings” comes across as a bit salesy, we can’t argue with this approach to incentivizing the repeat purchase. 

Whatever option you go for, choose an approach that shows you have confidence in the value of your product and its ability to satisfy your customers’ needs. That’s something that certainly can’t be said for automatic discounts that always carry the possibility of damaging your price integrity.

Instead of letting price be your main competitive advantage, focus on discounting tactics that encourage repeat purchase rates. And from there, customer loyalty will be more likely to follow suit.

Try a loyalty program

Once you have a discount strategy in place that helps bolster customers’ faith in your product, take it a step further by creating a loyalty or rewards program.

While many of these programs essentially serve as a glorified coupon service, merely offering discounts for members who pay into them, the best ones take the opposite approach. Instead of giving a percentage discount to anyone who joins the program, only the best and most loyal customers are rewarded with special perks.

Companies like Inkbox are seeing increased engagement and loyalty thanks to these types of programs. By using exclusive benefits to pique their target customers’ interests, they can steer clear of reaching those customers through short-term solutions like coupons.

Again, including some kind of gamification element can work wonders by encouraging customers to reach the next level and unlock their rewards.

On their membership page, Inkbox lays out what benefits participants can expect to receive at each “chapter.” (Notice how there aren’t any discount codes in sight?)

Another tactic that Inkbox has wisely taken advantage of? Earning perks through social sharing, which helps to boost brand awareness and generates buzz around the program.

Of course, mapping out each reward level and the perks themselves requires tweaking your ecommerce marketing strategy, meticulous planning, and additional creative output. But when the end result leads to a more passionate customer base and a higher-value product, you know you’ve chosen a winning strategy.

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