What are the best practices for creating coupons that drive repeat purchases and referrals?

1 Offer value and relevance

The first rule of creating effective coupons is to offer value and relevance to your customers. Value means that the coupon provides a significant saving or benefit that motivates the customer to act. Relevance means that the coupon matches the customer's needs, preferences, and behavior. For example, you can segment your customers based on their purchase history, location, or interests, and send them personalized coupons for products or services that complement or enhance what they already bought or want.

2 Set clear and reasonable conditions

The second rule of creating effective coupons is to set clear and reasonable conditions for using them. Conditions help you control your costs, prevent abuse, and encourage repeat purchases and referrals. However, if the conditions are too complicated, restrictive, or unfair, they can backfire and frustrate your customers. For example, you can set a minimum purchase amount, a limited time frame, or a specific channel for redeeming the coupon, but make sure they are easy to understand and follow, and that they do not undermine the value and relevance of the offer.

3 Reward loyalty and referrals

The third rule of creating effective coupons is to reward loyalty and referrals. Loyalty means that you appreciate and recognize your customers for staying with you and buying more from you. Referrals mean that you incentivize and thank your customers for spreading the word about you and bringing new customers to you. For example, you can create a loyalty program that rewards your customers with coupons for reaching certain milestones, such as spending a certain amount, making a certain number of purchases, or celebrating a birthday or anniversary. You can also create a referral program that rewards your customers with coupons for inviting their friends, family, or colleagues to try your products or services, or for sharing their positive feedback on social media or review sites.

4 Test and optimize

The fourth rule of creating effective coupons is to test and optimize them. Testing means that you measure and analyze the performance of your coupons, such as how many customers use them, how much they spend, and how satisfied they are. Optimizing means that you use the insights from testing to improve your coupons, such as changing the value, relevance, or conditions of the offer, or targeting different segments or channels. For example, you can use tools like Google Analytics, Mailchimp, or SurveyMonkey to track and evaluate your coupons, and use tools like Canva, Photoshop, or Fiverr to design and edit your coupons.

5 Add value and variety

The fifth rule of creating effective coupons is to add value and variety to your coupons. Value and variety mean that you offer different types of coupons that appeal to different customers and situations, and that you combine coupons with other benefits or features that enhance the customer experience. For example, you can offer percentage discounts, dollar discounts, free shipping, free samples, free trials, gift cards, or bundles. You can also combine coupons with guarantees, warranties, testimonials, reviews, or social proof.

6 Follow the best practices

The sixth rule of creating effective coupons is to follow the best practices for creating and distributing them. Best practices mean that you follow the ethical, legal, and technical standards and guidelines for using coupons, and that you use the best methods and platforms to reach and engage your customers. For example, you can follow the CAN-SPAM Act, the FTC guidelines, and the GDPR regulations for using coupons in email marketing. You can also use tools like Shopify, WooCommerce, or Magento to create and manage your coupons on your website or online store.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?