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15 Types of Coupons to Enhance Conversion Rate

sahil bajaj

Sahil Bajaj

Senior Specialist - Marketing @ Shiprocket

January 15, 2024

12 min read

The competition gets tough when there’s a lot of fish in the sea! Every brand is striving for a larger chunk of market share. One popular way to go about it is offering bait, or let’s say, lucrative discounts and coupons to grab the customer’s attention. Slashed prices or complimentary gifts on purchases often help materialise a customer’s journey from the cart to checkout.

We are currently witnessing times when customers are more often than ever expecting offers and different types of coupons while shopping online. They would look for deals on various websites before making even the most mundane purchase. Since, according to BigCommerce, 90% of consumers use coupons, showering your potential buyers with bargains is now a crucial part of running a successful eCommerce business. 

This article helps you get a fair idea about the many types of coupons and deals you can offer to attract new customers or retain existing ones.

Types of Coupons for Higher Conversion Rate

The Role of Discount Coupons in Marketing

Different types of discount coupons are like a psychological hack to get more sales or even shell out old stock. People may feel your products are overpriced and skip buying them at the original MRP. But as soon as you offer them at lower rates, they’ll hop on the bus in fear of losing the deal. On average, discount campaigns help in boosting sales by nearly 25%, and result in a 15% hike in customer acquisition.

These promotional discounts are excellent marketing tools since they create a feeling of urgency in the customer. Shoppers think they may miss out on something valuable if they don’t get their hands on discounted items they might have been eying on for a while. The Fear of Missing Out (FOMO) is quite real and pushes many buyers to fill their carts with more than they need.

Other than that, people also feel buying discounted products is a smart move since they’re getting more value by paying less. They see the worth in waiting and not making impulsive purchases. However, they may end up spending way more during a seasonal/other sale than with standard rates.

For instance, many shoppers actually wait for the big billion sale on Flipkart, the Great Indian Festival at Amazon, or the pink sale on Nykaa to make bigger purchases like gadgets, electronics, expensive makeup products, etc.

Marketers and businesses must definitely leverage this high-paying marketing tool to increase traffic and sales on their eCommerce websites.

15 Types of Coupons to Lure Customers

Now, there are many ways to keep your customers hooked and nudge them to buy more. We’ve listed several types of coupons below that may bring you more sales or higher profits.

Percent-off Discount Coupons

These are the most common and widely used types of coupons by businesses. Decide a certain percentage of discount you’d like to offer on shopping worth a particular amount. For example, Get 20% off on orders above INR 2,000. In such cases, when customers see that they can avail of a discount by adding a small purchase, maybe products worth 700 are sitting in their cart. They’ll likely add a product or two to reach the INR 2000 amount.

You can also use these types of coupons to build your email list. Offer a 20% discount to customers on providing email addresses or on their first purchase. Buyers always fancy money-saving deals. Several reports reveal that 70% shoppers are more inclined to purchase from a brand offering discounts. 

Percentage Coupons
Pic Credit: freepik.com

Free Shipping Coupons

It’s usually unpleasant for a buyer to see extra costs added when they reach checkout, be it taxes or shipping. Eliminating shipping charges over a certain amount excites buyers and may seal the deal for you. Paying that small extra shipping cost can lead to buyers abandoning carts or delaying the purchase to ponder over their decision. Your customers may fill their carts with countless items, but seeing the shipping charges may be disappointing. So consider shipping products to your buyers free of cost.

Buy 1 Get 1 Free (BOGO)

Who doesn’t like a free product or getting two at the cost of one? This type of coupon is one of the most lucrative since customers perceive the second item as free. They may not even need the product yet get compelled to pick it. Such offers are suitable for particular times of the year and specific products. For example, offering a set of diyas or decorative items with a large home decor piece or a makeup store giving free lipsticks on purchasing an expensive eye-shadow palette. People usually need multiple things when purchasing in the festive season or for special occasions like weddings.

Buy one and get one.
Pic Credit: freepik.com

Cart Deals

Imagine a customer window shopping in a store with no plans to buy anything. Noticing this, a sales personnel walks up to inform the shopper about a last-minute discount if they purchase anything. It may suddenly pique the customer’s interest, and a sale might happen. A cart coupon works just like that when people abandon their carts. You can bring back these customers by emailing these types of coupons with a 5% or 10% discount on placing the order. 

A study by SheerID and Kelton Research found emails including coupons increase revenue by 48% approximately. Many people take a while to decide, but additional cart discounts might make them want to take action quickly.

Seasonal and Festive Sale

Another common marketing practice is to run a sale during festivals, holidays, or at the season’s end. People usually have an extensive buying list during the festive season. They are on a spree to make multiple purchases and sometimes even buy impulsively. Having banners or billboards saying up to 50% or 70% on your eCommerce website brings many customers to your door. The holiday season is the perfect time to offer discounts as customers shop for themselves, family, and friends. It gives you the chance to multiply your sales.

Festive and Seasonal Coupons
Pic Credit: freepik.com

Free Trials for Products/Services

Customers often want to try things before buying. They like to make the experience as tangible as possible. This is especially true in the case of online shopping. For example, they’d like to try on shoes or outfits to observe the fit and look, or they’d like to use a cosmetic product to understand the difference it makes, or they might want to try a service provided through apps or websites like Canva, Adobe Photoshop, OTT platforms, etc. Extending free trials on products or services helps the buyer decide. Many people end up investing after trying a service for a month. Similarly, you can offer cosmetic or skin care products, perfumes, and more samples to get sales conversions. 

Newsletter Subscription Discount

How do you ensure continuous sales or retain customers after one purchase? You reach out to customers through promotional emails. But the challenge is that they don’t like you landing frequently in their inboxes. Therefore, they refrain from subscribing to new websites. However, they’re very likely to hit the subscribe button if they get a 10% or 15% discount to do so. You must consider offering these types of coupons to create an email list. Fetching emails of potential leads is never an easy task, but a discount might just do it.

Newsletter Coupons
Pic Credit: freepik.com

Referral Coupons

Many brands like to give customers discounts on referring their products or services to family, friends or acquaintances. Sometimes, they also offer coupons to those customers for availing discount on their first purchase. It’s a brilliant way to build a chain and enhance your customer base. These types of coupons introduce new customers and may also lead to double sales. You also get more traffic to your website with such offers. 

First-time Buyer Discount

These days, people mostly expect first-time purchase discounts from eCommerce stores. They may not expect it at a physical store, but digital platforms have made offering these types of coupons a general practice. Giving 10% or 20% off on the first purchase invariably increases the chances of customers trying out your products or services. This works quite well for customers who are unsure of buying from you. A discount nudges them to purchase and may even sweep in some repeat orders later.

First Time Buyer Coupons
Pic Credit: WordPress.com

Loyalty Points

Launching a loyalty programme encourages your customers to buy more frequently from you. It also boosts sales from already consistent customers. Reward your buyers with redeemable loyalty points on purchasing at your store. As the loyalty points stack up, they can avail considerable discounts on shopping at your outlet or website. This will have them returning and make them loyal to your brand.

Special Occasion Discounts

Celebrating with your customers on their special occasions is a good idea to solidify your relationship with them. You could give them refreshing deals for their birthday or anniversary. Customers love these types of coupons, as it makes them feel special. It’s a great way to build connections with your customers and increase sales. You can also consider offering discounts on your brand’s or store’s anniversary.

Special Occasion Discounts
Pic Credit: mysmartprice.com

Gift Cards

Gift cards act as fantastic marketing tools when trying to make a name as a brand or promote it. You’ll see your customers returning if you add a gift card to your customer’s purchase. For instance, if you want the customer to make a monthly subscription to your products online, add a gift card with their first subscription. These cards encourage your buyers to make more purchases. Additionally, returning customers may stay longer or become loyal purchasers even after spending the gift card. Many studies and research reveal that 80% of shoppers getting discounts from brands show a higher tendency to convert into loyal customers.

Scratch Card Coupons

Your customers might love surprises, and scratch cards create a mystery effect that entices them to take the offer. Give them scratch cards where they win special discounts or cashback on prepaid orders. You may also offer mystery coupons that get revealed only after the customer places the order. For example, there is a mystery offer on your haircare range, and the deal says the customer needs to order a set of shampoo and conditioner to reveal it. The mystery coupon will show after the purchase is complete. Such types of coupons can infuse an element of excitement into the online shopping experience, enhancing sales.

Scratch and win coupons
Pic Credit: easypromosapp.com

SMS Coupons

There are multiple channels to drop in lucrative deals to your customers. Besides emails and loyalty points, you could also leverage the power of WhatsApp or SMS to lure customers. Message them with a discount offer or information about your ongoing store sale to grab their attention. Add a link to your website that leads them directly to the sale page. This kind of promotion can get you conversions along with substantial website traffic.

Automated Coupons

A probable hassle you might face with your online store coupons is your buyer forgetting to apply the coupon code at checkout. They may later send you grievance emails or ask you to apply the discount. However, you can make a better arrangement by generating automatic coupons at checkout. With this, your customers can relax and enjoy shopping without worrying about entering codes.

Automated Coupons
Pic Credit: makewebbetter.com

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Conclusion

Promotions and marketing play an equally important role, as do the quality of your product or service. Sometimes, buyers need a slight push to finalise their purchase or to explore your online or offline store. A brand must essentially offer discounts and different types of coupons to attract new customers, drive more sales, gain loyal customers and make higher profits. Seeing giant banners shouting ‘Sale’ brings new and existing customers to your store. These discounts, from free shipping to gift cards, enhance your customer base while increasing their capacity to buy more.

How do I select the correct type of coupon for my business?

There are several coupons you can offer online or offline. While considering which types of coupons work best for you, you must consider your target audience, product offerings, and marketing goals. A constructive approach to doing this is experimenting with various types of coupons to see which ones give you higher conversion rates over time.

How can I manage coupon campaigns?

It can be difficult to manage multiple types of coupons on your own. There are various online platforms and eCommerce systems that offer coupon management tools. These tools help you streamline coupon campaign creation, distribution, and tracking. For example, Voucherify is a digital platform that enables you to create and manage coupons.

How often should a business give discounts to customers?

There is no limit when it comes to offering discounts. You can run seasonal sales for months or continuously provide a few types of coupons, like first-time buy coupons. However, the frequency depends on the business model and goals. You must experiment with different cadences, monitoring customer response and conversion rates.

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