Who benefit the most from coupons?
Vouchers or coupons always seem like a great deal in the eyes of a consumer. Some will even base their buying strategy around it to get the most reduced or optimised price for an item. What are the interests of companies in creating such promotions? Are they benefiting from it?
Coupons benefit both parties
Despite clever customer behaviour to source specific items, in aggregate companies do benefit from giving out vouchers. Obviously, they would not allow them to circulate in the marketplace if they could not access a certain level of ROI. But how does it work? And how do companies get a return on this “investment”?
Studies show that first and foremost, companies use this marketing tactic to capture their customers’ attention. It helps them stand out from competitors and offer something that customers can readily afford and are willing to do. They are also a way to advertise new products through free samples or trials. Furthermore, offering coupons can promote customer loyalty by showing avid consumers that they are being valued. But primarily, companies use vouchers to generate repeat business and promote their brand to customers.
Companies using vouchers
Novatti Pty Ltd, a leading platform specialised in mobile payment solution claims that consumers do like vouchers. Specifically, while printed vouchers are very tangible, vouchers displayed on smartphones fulfil the same need for the consumer. Vouchers act as a receipt, and can be stored or forwarded to others. When consumers receive a voucher, they feel that they have received something for their payment, which tends to increase their satisfaction towards their buy.
Amazon used to send a $25 Amazon voucher to customers for every successful referral with a minimum transaction of $10,000 within 90 days of opening a Currencies Direct account. This offer is a great example showing how a specific offer would benefit everyone included in the process; the referrer, the referee and the company obviously, happy to pay for the acquisition new valuable customers.
Vouchers also represent an additional payment method in the marketplace, helping to generate more sales overall. Businesses that try to reach consumers globally always take into consideration the methods that their customers use to process a payment. Allowing vouchers to issue payment can enable entrepreneurs and e-commerce companies to reach some remote segments where consumers don’t have the capacity to use credit cards or when a business’s payment gateway doesn’t accept credit cards from specific countries.