E-coupons

Gema Martín Soler. Professor. Instituto de Empresa

9 January 2006

Electronic discount coupons, better known as e-coupons, have long been used as a sales promotion tool in the United States. Now these vouchers, similar to the traditional off-line coupons, are catching on in Spain.

Indeed, both types of coupons are aimed at encouraging a consumer to buy a specific brand or product at a specific shop by offering them, via the coupon, a discount, sample or a free product. Traditionally, coupon shopping involved cutting out a coupon and visiting a specific shop in order to take advantage of the discount.

Today the internet has simplified the system in such a way that one single click of the mouse is enough to obtain several e-coupons for use in online shopping. E-coupons can be distributed in many different ways once the buyer is in a virtual store.

They can be distributed when we enter the virtual shop; while reading a description of a certain product; in conjunction with another related product; when we are finalizing our purchase or when stocks need to be sold.

But, what are some of the advantages this system has over traditional coupon buying?

::First of all, it ensures the e-coupons reach those who are truly potential buyers, thus improving the segmentation of the promotion.
::It also affords the sales campaign greater efficiency and savings. It enables the promoters to speed up the process of creating and organizing a campaign as now they are no longer dependent on printers.
::The technology is easily installed, allowing for greater mini-purchasing (the transactions are of little value and do not need to be encoded).
::And, above all, it creates greater scope for the coupons to be placed simultaneously on a variety of media suited to the target public.

However, several issues still need to be addressed if the most is to be made of e-coupons. One must look closely at the aim of the promotion. For example is the aim to obtain a high ratio of visit to purchase rates, or turn a click of a mouse into sales or convert occasional clients into loyal ones? Once the aim is clear the next question is, when is it most advantageous for the e-coupons to be made available? More importantly, how can they be offered in a way that maximises their impact?

The answers lie in a system that compiles demographic information, transaction records of coupons accepted and rejected by clients and also potential clients; in short, a Customer Relationship Management or a CRM. But this does not imply the need for such a system to be in place in order to be able to start using e-coupons effectively. Indeed, quite the opposite, they can be used as a good base for collecting information about clients if a computerised management system is not yet available.

However, as the online world never ceases to move forward, in the USA, coupons not only reach clients by computer, but also by mobile phone: many shopping centres now send SMS offers that can be exchanged for purchases. These are called m-coupons, but that is a topic for another article.

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