Online Coupons and Internet Merchant Accounts: What Works?

In a tight economy, people are more savvy with online purchases, which directly impacts Internet merchant accounts. Offering online coupons to gain site traffic for Internet merchant accounts can work well, but only with careful execution and planning.

The Cons of Online Coupons

The challenge is that with the far-reaching power of the Internet, a coupon in the hand of one person quickly spreads to thousands with one click of a mouse. This opens up merchants to more risk, forces them to pay more to affiliates who send traffic, and attracts short-term customers – all while discounting offerings and missing sales.

Cart abandonment is also common (currently 60% of all online transactions), as shoppers conduct price comparisons with other sites. Misuse of online coupons can also increase cart abandonment.

Coupon codes at check out can drive people to abandon a purchase in search of the coupon, and in turn, the merchant may need to pay a fee to the affiliate who hosted the coupon and directed the traffic, even if no sale was made.

The Pros of Online Coupons

Online coupons can work, and are good for increasing sales and revenue. However, merchants must be clear on how to segment their customer base and send the appropriate offerings, because coupons mean something different to each buyer.

People who spend time clipping coupons are on a budget, so they are willing to spend time looking for deals. They need the coupon to justify the purchase. That is why it’s so critical to get coupons into the hands of the right shoppers, and make sure it’s only accessible if they create an account or join a mailing list.

One time use coupons are also a good tactic, presented to shoppers who have just completed a transaction at another merchant’s site. This approach targets high quality customers, and provides the opportunity to expose your brand and products to folks with an interest.

Free shipping, deep discounts and coupon incentives at check out also entice folks to add more to their shopping carts, which boosts the average order size and increases your online credit card processing transactions.

 

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