Written by Dan Marzullo

October 1, 2020

For an eCommerce business, sales are everything. But to generate revenue, you need people to visit your site and buy your inventory. With so many creative eCommerce promotion ideas to acquire customers, build loyalty, and lure back a shopper who has abandoned their cart to choose from, what’s the most strategic way to increase average order value? The answer, surprisingly, is coupons. 

In 2019, shoppers redeemed 31 billion digital coupons worldwide. With this kind of volume, it’s impossible to ignore their potential. 

From a consumer perspective, coupons help save money and make people feel financially savvy. Price is the main factor in purchase decisions for 89% of consumers, making coupons very attractive. 

From an eCommerce business perspective, offering a sales promotion in the form of a discount can lead to a higher average order value if deployed strategically. 

Clever coupon marketing strategies and personalized discount delivery tactics to customers make them a win for all parties. 

What is average order value?

Average order value (AOV), as defined by Shopify, is the “average amount of money each customer spends per transaction with your store.” To calculate your AOV, take your total revenue and divide by your number of orders. 

While there are several ways to increase the AOV for your eCommerce store, coupons are an extremely effective strategy for doing so.

Do coupons help businesses and consumers save (or lose) money in the long term?

It’s a good question, but the answer may not be as obvious as you think. Consumers use a tried-and-true sales promotion like coupons to save money, right? Well, yes, if they stick to the one item they had originally planned to buy. 

Has this ever happened to you? You reason it because you’re saving money on one item by using a coupon, perhaps you can use extra dough towards another product. If this sounds familiar, you’re not alone. When redeeming coupons, 77% of consumers spend $10 to $50 more than they had initially intended. It happens to the best of us. 

Dispensing coupons sounds like an easy eCommerce marketing strategy that will increase average order value. However, without a well-thought-out plan, offering discounts can actually hurt your bottom line, even while increasing AOV. Here’s why:

  • Consumers learn to expect discounts, and, as a result, become less inclined to purchase full price products
  • The net profit from the average order is lower, impacting shipping margins
  • Coupons may decrease the perceived value of a product

That said, smart sellers can still end up on top using savvy coupon campaigns for everything from a social media holiday campaign to 4th of July promotions and more. This guide will explore several sales promotion ideas using coupons that will increase your business’s average order value, along with how to implement them. 

Four types of coupon promotions targeting consumers

The following eCommerce promotion ideas all have a strategy behind them, despite how a customer may perceive them. See if you can spot the marketer’s goal in the promotional language used below.

1) Percentage-Based Discount

This product discount is determined by a percentage.

  • Save 15% on one item now until Sunday; use discount code: XXX
  • Buy two tanks and save 20% on shorts

 2) Dollar-Based Discount

The consumer receives a specific dollar amount for the discount.

  • Save $20 when you spend $100 and over
  • Enjoy $10 off one item in your cart

3) Free Shipping

Free shipping can make or break a sale. Since shipping usually isn’t calculated until the end of the sales process, many consumers end up abandoning the checkout process when they see shipping costs.

  • Spend over $50 and get free shipping
  • You’re only $20 away from free shipping 

4) Free Gift

This is a clever way to move inventory that isn’t selling and make your customers feel special.

  • Get a free gift with any purchase over $100
  • Spend $50 today, and enjoy your free gift on us

These eCommerce promotion tactics will increase your average order value, increase customer loyalty, and help move product. Were you able to pick out the ulterior motive for each type of discount? 

The reveal…what the coupon doesn’t tell you

When a business offers a coupon, its goal is to incentivize potential customers to spend more. If you read carefully, you’ll see each coupon does just that. Here’s how:

Setting order minimums for a discount nudges your customer to increase their order total. In the shipping example above, customers may need to purchase more than they had originally intended to in order to get what they want. So while they may be saving $6 on shipping, they end up spending $20 more to save that $6. Clever, right?

Raising your AOV is all about strategy. In some cases, a dollar discount is better than a percentage. Let’s say you offer a $25 discount on all purchases over $100. Whether your customer spends $101 or $500, you’re only required to give them that $25 discount. 

Now, replace the dollar discount with a percentage. As your customer spends more money, there’s no limit to how much revenue you may sacrifice. That’s not a good situation for your eCommerce business. However, if you limit the percentage discount to a single item instead of an entire purchase, you’ll be able to cap your losses and still persuade the customer to buy more. 

Bundling products (so that in total, they cost less than if they were purchased separately) increases the perceived value of a purchase. How? When you offer a package of products for less than what they’d retail for individually, it creates an attractive all-in-one solution that appears to offer terrific value. 

Your customer, who came to buy one product, now just purchased three. Even though you’ve lost a little revenue, you’ve moved inventory and increased the order total beyond what the customer had intended to spend. 

Bulk discounts also play on customer emotions. No one wants to experience the fear of missing out (FOMO) by passing up a chance to get more for less, yet, in reality, the consumer is spending more to get more. 

  • 15% off on three or more products
  • Buy two and get 50% off the third

Rito from Flying Start Online says tiered pricing is an “incredibly powerful eCommerce tactic, and also incredibly overlooked.” This method persuades your customers to purchase more because the more they buy, the more they save. The more they buy, the higher your average order value. Remember that this discounting model does not limit the amount of revenue you’ll miss out on, as with the dollar amount discounts.

  • Spend $50, get 10% off
  • Spend $100, get 15% off
  • Spend $150, get 20% off

Rito also notes that coupons can serve multiple purposes. He says, “You should know that average order value can help you get to know your customers’ buying habits, insights about your marketing campaign performance, and how well your pricing strategy is performing.”

Run better promotions and sell more product in your online store with ManyChat. It’s free to get started.

Creative eCommerce promotion ideas

There are countless fun ways to invite your customers to redeem coupons on your eCommerce website—all, of course, with a credible marketing tactic behind them.

  • Discount a future purchase. Include a “thank you” coupon towards a future purchase along with confirmation and shipping information. Not only did your customer just buy something, but now you’ve incentivized them to come back and buy again. 
  • Offer referral discounts for spreading the word.Your customers will feel valued after helping the company gain more traffic, and they’ll actively promote your products for you by telling their friends and family about your online store.
  • Implement a loyalty program that rewards your customers. When an existing customer has several other choices, the potential for earning reward points for purchasing from your store can tip the scales in your favor. Furthermore, as many as 84% of consumers say they’re more likely to stick with a brand that offers a loyalty program, and 66% say the ability to earn rewards actually changes their spending behavior.
  • Provide a discount to shoppers who have left an item in their cart. On average, almost 70% of potential customers start checkout and never complete their purchase, but coupons usually provide that extra nudge to seal the deal.
  • Give your coupon an expiration date. This incentivizes consumers to complete the sale quickly, and limited-time offers are a great way to bring a sense of urgency to purchase. For example, if you send a Father’s Day promo out, make sure the coupon doesn’t last past the holiday.
  • Ask for contact information in exchange for a coupon. It’s a low-level ask that provides value for the customer, and also helps you build your customer database and secure permission to contact them again.
  • Ask for a review with a coupon as a reward. Customers earn rewards for sharing their great shopping experience, and you build your reputation and get free marketing.
  • Create a fun game for your visitors to win coupons. Use a tool like ManyChat’s Randomizer (where people can “spin” to win tiered discounts) to provide entertainment and savings while increasing sales.

Learn more: Best Memorial Day Email and Chat Marketing Examples

How to execute your coupon campaigns

This all sounds great, but how do you transform these eCommerce marketing strategies into action? Welcome to the world of Chat Marketing, where you can automate and combine Facebook Messenger and SMS to grow your business. 

Use custom Messenger bots on social media to help fill and lead potential customers down your sales funnel, while converting subscribers to buyers using coupon codes. You’ll be celebrating 80% open rates and 20% click-through rates in no time. Woo hoo!

ManyChat allows you to create coupon campaigns that will automatically sync over to your Shopify store without ever leaving ManyChat. Pretty cool. 

Coupon campaigns with ManyChat

What’s great about this type of sales promotion is that you can implement your coupon campaign across multiple channels, such as Facebook Messenger, SMS, and email. 

In addition to the integration with Shopify, you can also send coupons to customers through the ManyChat/Zapier integration

Using Zapier and ManyChat to send coupons

At the end of your campaigns, insight into the results is a must. ManyChat tracks all of the critical information from your coupon campaigns so you can understand how effective they were.

Coupon Campaign Example

Check out these neat eCommerce marketing ideas that show how to incorporate Chat Marketing into your coupon campaigns. Such custom engagement enables your business to build relationships with your target audience through interactive and tailored content.

You can send customers coupons and special offers to bring them back to your store. 

Fletcher Goods coupon example

You can use SMS and Chat Marketing to gather important information and reward your customers with coupons.

SMS marketing opt-in example

Use a Randomizer block in your ManyChat flow to offer fun giveaways and discounts.

Randomizer #2 Example of Facebook Messenger Bot Flow for eCommerce

Don’t be afraid to get creative with your eCommerce marketing campaigns. Remember, they’re more than simply handing out discounts; they’re vital for your business, especially to boost your AOV.

According to Statista, the number of people using digital coupons is expected to hit 145.3 million by 2021. If you want to snag a piece of this pie, now’s the time to start running coupon campaigns. Need we say more?

Want to run better promotions and sell more products in your online store? Get ManyChat today. It’s free to get started.