Great Coupon Deals: The Simple Secret

Retailer Survey Shows Coupons Can Increase Revenue by 40 Percent

November 24, 2016: According to a recent retailer survey by, coupons have the potential to increase monthly revenue by approximately 40 percent.

The survey asked 49 randomly-selected online retailers to anonymously report their total regular sales and their total coupon sales for the last 30 days.

Based on their answers, Couponbox calculated that these retailers earned on average $29,435 per month in additional sales via coupons, which was a 40 percent of regular sales.

Multiply that monthly average by 12 months, and we can estimate that coupons have the potential to generate $350,000 in extra revenue per year.

The retailers in the survey were a random mix of small- to medium-sized operations where 14 percent earned more than $100,000 per month in regular online sales. 32 percent earned $10,000 or less.

The median average percentage of coupon sales to regular sales reported was 38 percent, with approximately 14 percent of respondents earning less than 30 percent in coupon sales and 34 percent earning more than 40 percent. In some cases, retailers nearly doubled their regular sales with coupon sales of more than 80 percent.

There are many ways businesses can use coupons to market their products, including platforms like Groupon. However, it can be difficult to decide exactly how to offer a great coupon deal so that it is beneficial to both your customers and your business.

Why Should Businesses Use Coupons?

Unfortunately, many businesses believe that offering coupons is a waste of money or can be damaging to a brand.

It’s true that coupons do come at a cost and have the potential to be used incorrectly. However, they are also an important sales and marketing tool.

In addition to increased sales and revenue, coupons can provide other benefits to businesses. These include reaching new customers, reducing unwanted stock, brand promotion and more.

At their core, coupons are essentially a form of advertising, a way to inform customers about your business and attract them to it.

What Is the All-Time Best Coupon and Why?

There are many types of coupons:

New Customers Only – redeemable by new customers only
Sitewide, All Products – applies to all products in an online store
Minimum Order Value – is redeemable for orders of a minimum value
Buy One Get One Free (BOGO) – also known as 2 for 1
Limited to Specific Customers –by geography, account status, subscription etc.
Category/Product Specific – applicable for specific products or product categories

Each one offers a benefit to both customers and businesses. But which coupon is the best in general?

To answer that question, the survey also asked retailers to vote on the all-time best coupon type and choose a reason why.

67.3 percent of respondents reported that the Sitewide, All Products, coupon type was the all-time best. 42 percent of those retailers cited maximizing sales as the reason for their vote.

This result is somewhat surprising since such a widely applicable coupon could be seen as cutting too much into profits. However, the Sitewide, All Products, coupon is the most convenient and attractive to customers, which may inspire customers to buy more.

According to’s expert portal managers, when it comes to reducing the cost of a coupon, the discount amount is more important than type. As such, the survey asked retailers what was the ideal percentage discount for a coupon.

57 percent of respondents stated that the best discount range was between 10 and 20 percent. Of course, the ideal discount range for a coupon varies from company to company and depends on your profit margin, which is covered below.

How do you decide which coupon is right for your business?

Now that you’re convinced that coupons can be good for your business, you should know how to choose the right one.

#1. Know What Your Customers Want

One of the most important elements of a coupon is the real benefit it provides to your customers.

Consumers generally know what they want, and if they perceive your coupon as providing that, then it will likely be successful.

Conversely, if customers feel that a coupon is designed to manipulate them into buying something, they will consider it spammy and will possibly be turned off by the brand altogether.

Pro-tip: Avoid overly-promotional coupons.

#2. Know Your Business Goals

After figuring out what your customers want, you must then decide what your goals are.

Usually, coupons are used to increase sales, but there are many other business goals you can achieve using coupons. Each coupon type can be used for a different business goal. If you choose the wrong coupon or use it in the wrong way, this could negatively impact your business.

Survey respondents were asked to identify the coupons they thought were best for specific business goals.

46.9 percent of respondents stated that the Sitewide, All Products, coupon was the best type to maximize sales. 59.2 percent reported that the New Customers Only type was the best for increasing long-term revenue. 63.3 percent said the Category Specific coupon type was the best for launching or promoting a new product.

Best Coupon Type by Business Goal

Pro-tip: Define your goals clearly before implementing a coupon.

#3. Know Your Costs

There are several costs associated with coupons.

Many of these costs are variable and can differ from business to business. These costs can include printing, graphic design, marketing and advertising. Online coupons and coupon codes are great because they typically have a lower cost than print coupons.

Despite these differences, each coupon has a fixed cost in terms of lost profit depending on its discount amount.

Pro-tip: Know your profit margins!

Profit margin is one of the most important numbers to know about your business. Each product has its own profit margin and is calculated as follows:

(retail price – cost) ÷ (retail price)

So if a product costs you $50 to put on the shelf in your shop or warehouse, and you sell it for $100, your profit margin is ($100-$50) divided by ($100), which equals .50 or 50 percent.

Since every coupon cuts into profit margin, this is an important number to know when deciding on your coupon’s discount amount.

Determine how many extra sales you would need to maintain your profit level using the “Cut Your Costs Calculator” here:


What Are the Cons of Coupons?

By now, the benefits of coupons should be quite clear. They have the potential to increase sales, reward customer loyalty and encourage impulse buys.

However, there are a few drawbacks to be aware of.

#1. Hurting Your Brand Image

One of the most often cited cons of coupons is that they have the potential to cheapen a brand’s image. While this may be true for luxury brands, most businesses that offer mid-range pricing do not have to worry about this. In fact, coupons are usually seen as generous, when they are implemented correctly.

How to avoid it: Follow the numbers. If your coupon discount is too high, it is more likely to make your brand look desperate. Start out with a healthy 10 percent discount or free shipping.

#2. Coupon Addiction

A slightly less understood con of coupons is coupon “addiction.” For example, if you constantly offer the same coupon at the end of every month, you run the risk of teaching your customer base to anticipate the deal and wait to buy.

How to avoid it: Vary everything. Keep your customers guessing so that they don’t become used to a coupon pattern. Try surprising them with various discount amounts, validity periods and eligible products.

#3. Revenue Cannibalization

Coupons also have the potential to cannibalize revenue. Revenue is considered to be cannibalized when customers who would have otherwise paid full price take advantage of coupons. Thus, the coupon is said to be eating into that revenue.

How to avoid it: This is where your business goals are extremely important. Be sure to choose coupons that target specific audiences, such as new or existing customers.

#4. Customer Alienation

Regular customers may feel alienated by brands who give discounts exclusively to new customers. This alienation could result in decreased sales, or worse, loss of customers.

How to avoid it: Again, here it is important to vary the coupons you offer so that you do not exclude an important part of your customer base.

Are you a small business interested in offering coupons? For more information about how to do so, just write to us by email, in the comments section below or message us on social media.

In the meantime, view and share the infographic below and check out how the top brands use coupons to achieve their business goals on

A guide for businesses

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