Coupons are one of the most commonly used marketing tools in the process of operation and promotion. They are a means of subsidy for users by merchants, allowing users to feel the profit psychology. As a marketing information carrier, we can better utilize and solve problems and achieve more accurate targeted marketing only if we understand the essence and principles behind them.

1. Drainage Methods

As the e-commerce market becomes increasingly mature, its traffic-driving methods are also endless. Coupons are a relatively ubiquitous traffic-driving method. Through the marketing factors of coupons, the actual conversion rate can be improved and traffic can be driven through different channels.

1. Internal drainage

The new retail platform will divert store members to online stores to achieve an increase in online traffic, and divert online store users to stores to achieve an increase in offline customer traffic. By distributing coupons on both ends, it can better promote traffic diversion, achieve user growth, and cultivate user usage habits.

Based on the established population portrait, an operation plan is created to distinguish the behavioral habits of new and old users and issue different types of coupons to control the scope of membership and achieve more accurate targeted marketing.

2. External drainage

Often we can see that different partners use coupons to attract each other.

• When you apply for a gym membership, you can get a coupon for a fitness meal at a restaurant for free. Isn't this killing two birds with one stone?
• Go to 98 and spend a certain amount to get a coupon from the designated driver platform;
• Go eat hot pot and get a free Hema Fresh discount coupon;
• Go to a 4S store to buy a car and get multiple free Tao Piaopiao movie tickets as a promotional offer;
• There are also many discount coupons for Starbucks, McDonald's, Pizza Hut and other companies given away by shopping guide platforms.

The key point of attracting traffic from different partners lies in whether the traffic generated by coupons can create certain value for the other party and achieve a win-win effect. At the same time, whether there is a certain correlation between the industry natures of the partners and whether there are similarities between the user groups, ultimately achieving scene-based touch marketing.

3. Specific factors of drainage

• Strength of discount: Within the scope of cost control, discounts are distributed in the form of hot-selling subsidies, so that users can truly feel the strength of the discount that the coupons can bring. The interests of merchants and users are equal. Only by paying first can there be sufficient conditions to profit from users in the end.
• Number of times limit: Each user's corresponding account can only be used once, and the ultimate goal is achieved.
• Number of discounts: When laying out channels, you do not need to set the number of coupons to be issued, as long as the usage conditions for new users are met, thereby lowering the usage threshold.

2. Solve the problem of repeat purchase

There is a scenario in both online and offline shopping where, after the purchase is completed, the merchant will immediately give you a coupon so that you can make the purchase again next time. However, the coupon is time-limited and needs to be consumed within the specified time. In this way, the purpose of return purchase can be quickly achieved.

When we finish our meal in a shopping mall, the waiter will always give you a large coupon, but this coupon can only be used within a limited time, and this coupon is invalid for this consumption. The merchant's purpose is still very strong.

But most people still cannot resist the temptation brought by cheapness. Eventually, the store owner will be able to see your familiar face again, and over time, you will get used to spending money here.

After all, coupons have inherent advantages. They can break the limitations of online and offline consumption scenarios at a specific time and place. Compared with other activities, coupons appear to be more flexible, which is beyond the reach of other activities.

Based on the population portrait, coupons are issued to low-active user groups, and users are reached through SMS and push, or through official account text and picture messages, to push coupon giveaway messages.

Low consumption frequency: Increase the frequency of consumption by issuing coupons and limit consumption within a specified time by limiting the time.

Low consumption intensity: Increase consumption intensity through the issuance of coupons, guide consumption by the price of a single product, and after purchasing a product, you can get a discount coupon for another product.

Long-term non-consumption: Awaken consumers by issuing coupons, provide large instant discount coupons for single products, and guide them to consume.

Specific factors for repurchase:

• Usage threshold: It can be used when spending X amount of money or purchasing X items;
• Limited time use: Only by using limited time can a better reminder function be produced and the user guidance effect be enhanced;
• Series use: The series use of multiple commodities, from the consumption of commodity A, leads to the consumption of commodity B.

3. Increase customer orders

When we went to buy an item priced at 50 yuan, we found a coupon for a 10 yuan discount on orders over 70 yuan. In the end, we bought more items priced over 20 yuan to meet the conditions for the discount.

When consumers consume, they want their own benefits to be greater than the costs they pay, and the costs here come from economic costs and potential costs of time and energy.

Self-interest - cost (economic cost + time and energy cost) = value perception

The greater the difference between one's own benefits and the costs incurred, the higher the perceived value and the higher the user's transaction intention. Conversely, the transaction intention will be lower.

In the absence of coupons, the value that users can perceive is 50 yuan. In the absence of other benefits, the cost paid by users is 50 yuan. This means that users need to pay 50 yuan to buy goods worth 50 yuan. Therefore, users do not perceive any benefits. Ultimately, they will only buy the product if they have a demand for it.

When there is a coupon, the value that users can perceive is 50 yuan. If there is a coupon for 10 yuan off for purchases over 70 yuan, the payment cost can be reduced to 40 yuan. The cost of obtaining the coupon is 20 yuan, and the final cost is 60 yuan, making consumers perceive that they have earned 10 yuan. Coupons are based on the user's original core value, reducing the user's payment cost, thereby influencing consumers to make purchasing behavior. In order to earn this 10 yuan, users are willing to spend an extra 20 yuan to buy some goods that they originally had no purchase needs.

The factors that influence users' consumption psychology are mainly manifested in the following aspects:

• Purchase demand: Only when users have purchase demand can we better intervene in their consumption;
• Affordable price: whether it meets the user's psychological price range;
• High cost performance: low price and good quality goods;
• If you don’t buy it, you will lose money: the price is good and the price is affordable. If you don’t buy it, you will miss this opportunity.
• Happy with the purchase: After buying something, you feel like you got a bargain and it gives you a sense of satisfaction.

Everyone has a different psychological price range that they can accept. Everyone has their own price perception, which is also called “price tolerance range”.

Suppose: the purchase price of a commodity is 50 yuan and the retail price is 80 yuan, but different users can afford different price ranges. Among 100 people, 40 people may think it is reasonable, and the other 60 people think the price is too high, and 60 yuan is the price they can afford.

It is impossible to satisfy all users with the right pricing every time, but we cannot miss the opportunity to make a deal, so we hope to allow different users to sell within the price range they can afford. In economics, this is called "price discrimination", which refers to the difference in price and the implementation of different pricing strategies for different recipients.

Let 40 users who think the price is reasonable continue to buy it at the retail price of 80 yuan. For the other 60 people who think 80 yuan is unreasonable, the price is lowered by issuing coupons to meet the price range they can afford.

At this point, you may think that it is too unfair to those 40 people, but since they can accept the range of 80 yuan, they may not spend time to get coupons, because obtaining coupons or using coupons actually have specific conditions and factors.

They would rather spend more money than spend time. At the same time, they may not care too much about these coupons and may not attach so much importance to them.

4. How to operate coupons

After the above analysis, knowing the actual effect of coupons, we now need to adopt different marketing strategies through coupons based on our own goals and user profiles.

Create "traffic-generating" coupons, offering an immediate 10 yuan discount to new users, and build traffic-generating channels through internal and external channels.

After having a certain user base, we can formulate "customer order" coupons based on controllable costs, for example: get a 5 yuan coupon by sharing, get a 10 yuan coupon for purchases over 60 yuan, and keep statistics on the corresponding coupon usage data.

After the previous round of coupon activities is over, you can try to adjust the coupon price, share to get a 3 yuan coupon, get a 7 yuan discount coupon for purchases over 60 yuan, and then record the coupon usage data.

Through the data feedback of coupons and the price adjustment of coupons, we find the critical point of coupons as the optimal coupon price. However, as the market and environment change, we need to make flexible adjustments during the operation process.

Once we have enough traffic and user behavior data, we can develop a deeper user profile and divide the population into different strata based on different consumption data.

• Interested groups: Those who have added products to the shopping cart in the past 7 days, but have no transaction records
• Orders placed but not paid: Orders were placed in the past 7 days, but no transactions were completed
• No repurchase: No purchase record in the past 30 days
• About to be lost: Those who have not logged in in the past 20 days
• Active users: certain transaction data is generated every day
• …

Using coupons to encourage users to repurchase will become the focus of the entire coupon operation.

Through coupon marketing, we must master the coupon formulation strategy and make reasonable use of it in different scenarios. The way of use is nothing more than adjusting the goals, making coupons, issuing, using, and statistics, and then continuously optimizing and adjusting to find the optimal critical point and bring out the real effectiveness of the coupons.

V. Conclusion

No matter what activities are carried out, users must gain a sense of satisfaction, which is what is called "utility" in economics. Consumers are willing to buy goods only when they feel that they can gain value from the goods. In other words, not only should users get a bargain, but more importantly, consumers should feel that they have gotten a good deal.

Only by knowing the essence and principles behind each marketing method can we truly make rational use of it. In fact, there are many ways to solve the problem, and coupons are not the only way to achieve our goals.

As product managers, we can also think in reverse: can we achieve our goals without coupons? Can we achieve our goals through activities such as full-discount, flash sales, group buying, special offers, etc.? Can these activities directly affect the results of the operations?

You must have a standard in your mind. Only by defining the standard can you know what kind of activity is most suitable for the current stage. At the same time, you must consider the existing factors, including: funds, team, operational strength, existing historical data, existing business, etc. At the same time, you must be aware of the comprehensive factors such as value, cost, risk, and scalability that the activity plan can bring.

Author:ykun

Source: ykun