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Advantages and Disadvantages of using Vouchers in eCommerce

To decide whether vouchers and coupons are the right tool to add to your online marketing strategy, it is essential that you consider the benefit and the cost of using coupons.

In this article, we will use Gtech coupon marketing strategy as an example a successful coupon strategy.

Advantages of using coupons

Increase Sales

This is the obvious benefit. Coupons serve to increase sales especially for high ticket items such as luxury gadgets. Gtech discount codes is a good example as Gtech quality is reflected on the price of both the Gtech eBike and Gtech AirRam. In order to boost sales, the company releases 10% off offers certain times of the year when online sales would normally be low.

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Enlarge Email List

Acquiring a customer can be expensive in terms of advertising and marketing. If you manage to sell to the same customer multiple times this improves your term on your advertising investment. It is essential to capture first-time visitor email address so that you upsell them and cross-sell them in the future. One way to do that is to ask visitors to provide their details (email address and name) in exchange of a generous coupon. At gtech.co.uk you will receive a special code via email if you provide your name and email address.

Remove barriers

Psychologically, limited-time coupons is a smart way to remove financial barriers affecting customers’ decision making. Often Gtech promo codes are used in this way: “Here is 10% off, valid till 5pm today”

Disadvantages of using coupons

Risk on brand image

Discount codes may have a negative impact of your brand image. Discount coupons may make your company look cheap. The risk is bigger to luxury brands such as Gtech. One way to counteract the risk of damaging your brand is to maintain the price of the core product as is, while offering coupons on the extra items. Gtech discount codes, for example, give you free shipping within the UK. When the company offer shipping for free, there is no discount on the main product.

Risk of making a loss

Discount codes might prove to be costly and end up reducing your profit margins. The only way to skirt this issue is by knowing what you can reasonably afford to discount. Sometimes, your product might not carry the margin required to provide a coupon. For instance, if Gtech’s cleaners sell for £199 and it costs the company £100 to pay the manufacturer, plus £50 in marketing and operating costs per unit, then issuing 25% off Gtech codes would mean that the company makes a loss.

Reduced Revenue

If you give a discount to all clients, even to those who would still buy at full price, you effectively reduce profits from all sales. A good way to market coupons is to offer them to new customers, or to select customers on special occasions.

For example, using social media, you can connect personally with potential clients and offer them generous discounts via Messenger on their birthday. Alternatively, you can wish them happy birthday on their Timeline together with a coupon or link to a special offer. This is even better than Messenger because other people get to see the offer and your brand.

Overall, you can avoid the above disadvantages, and maximize the benefits of coupons, when you use coupons on a personal level. For instance, added to the right social media platform, discount codes are quite effective in developing long-lasting relationships with clients – individually rather than massively;

“Hi Liz, Here is 20% off coupon. Use “LIZ40″ and save £40 on us –valid today. Happy Birthday!”

If you can get to the level where you send a message to a customer like that then you have customers for life.

Lessons from Gtech Voucher Marketing. The author has been in the coupon business for over 6 years and have worked with hundreds of Merchants in the promotion and marketing of their voucher codes.
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2 comments

  1. Even despite the disadvantages, I believe that this is a positive experience. Especially I like it as a client and coupons do not cheapen the company in my eyes.

  2. I think coupons always have a positive impact on a company.

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