This is an interview with Alex Papaconstantinou, founder of Wikigains.com, one of the UK’s biggest voucher sites. In this interview with IncrediblePlanet, Alex shows that successful coupon marketing, used in a long term strategy, is all about developing personal relationships with customers, and ultimately increasing profits.
Here is how:
IncrediblePlanet: Alex, too many small business owners think that marketing using coupons may cannibalise profits and that constantly discounting your products can impact your online business in a negative way. That is why so many retailers are no longer using coupons. What is your opinion?
Alex Papaconstantinou: Most retailers I know who decided to stop issuing discount coupons were doing coupon marketing the wrong way. Coupon marketing fails if you have a short term view. If all you want is to increase sales in the short term, discounting a product to lure users is almost always a disaster. Coupon marketing is a long term strategy. The purpose of distributing coupons is to develop a personal relationship with your clients.
IncrediblePlanet: Do you mean using coupons like loyalty rewards?
Alex Papaconstantinou: No. Of course, you can use emails to send discount codes to your customers saying: “We wouldn’t be here without your business. We want to offer you £20 off your next order as a token of appreciation.” But this is not all. Coupons are all about being personal. It’s more like “Happy birthday John, here is £5 OFF this wine just for you! Use personal code JOHN50 to get this offer only on your birthday.”
IncrediblePlanet: Is that done via your subscriber list or via your Facebook page?
Alex Papaconstantinou: Either or both. Through Facebook, you can give discounts and coupons to your fans on special occasions like birthdays. The great thing about Facebook is that it tells you about people’s birthdays. They pop up on your notifications. Rewarding your die-hard fans with big discount coupons instead of offering big deals to everyone is a much better business move.
IncrediblePlanet: What about remarketing?
Alex Papaconstantinou: Yes, a good example of remarketing is targeting Shopping Cart leavers. Abandonment of shopping cart happens when a customer visits your online store, selects one or more products, fills in the delivery form with their email address and then proceeds to checkout. However, the customer leaves your website while at checkout for unknown reasons. Targeting the same user with a coupon, offering a very attractive deal on the products he already has in the shopping cart is a good plan. But make sure you do it soon while the client is still hot.
You may send that customer a coupon code and a link via email. It can be like this: “Hi John, I saw you didn’t complete your purchase. I can give you 10% off your shopping cart, valid for the next 30 minutes only. Click this link to apply the discount. ”.
IncrediblePlanet: What if you don’t have 10% margin to play with?
Alex Papaconstantinou: Then, you have to see how much the customer is worth to you in the long term. I mean, you have probably already paid money on Google Ads, or invested in optimising your site, or paid for ads on Facebook in order acquire the user. If you don’t convert him he is still only a prospect, not a client. If you turn that prospect into a buyer, it is much easier to upsell or cross sell to them again in the future. Think long term. It may be good to give away 25% of your profits now so you earn 100% of the profit over and over again from the same person.
IncrediblePlanet: So you use coupons to grow your client base?
Alex Papaconstantinou: Yes. Your ecommerce business can offer first time buyers discounts using online discount codes even as much as 50% for a day. Customers on the fence will likely make up their minds when scarcity or urgency becomes part of the deal.
IncrediblePlanet: Thanks Alex. Many online business owners are coming up with ways for increasing their sales, building affiliate relationships, increasing customer loyalty and tracking customers by leveraging on coupons codes.
Alex Papaconstantinou: Yes, we can talk about using coupons to track affiliate marketing or any marketing campaign another time. However, for now, just remember this, to building a sustainable business think about coupons as a long term strategy for building relationships and not for increasing your sales short term.