Everyone agrees that offering coupons is a good thing, right? Many merchants use coupons because they believe they lead to increased average order value and higher conversion rates. So why aren’t all merchants using them?

The most basic reason is that some merchants wrongly believe that coupons – because they reduce the price of an item – lead to lower revenue. That’s only true in the short run and the research proves that coupon usage in the long run far outweighs any short term loss. More on that later.

But recently, more complex issues have reared their ugly heads and it’s all about attribution. What if a promo code unintended for the affiliate channel goes viral? What if the coupon publisher is getting the commission when a blogger initiated the sales process? What if I pay a commission on top of expenses in other advertising channels? These scenarios can, theoretically, cut into margins and incent a type of traffic that is less valuable to a merchant.

The numbers behind spend

Fortunately, solutions to these problems are rapidly emerging. Pepperjam, for example, has implemented a series of attribution technologies such as exclusive codes that track to a specific publisher regardless of who sends the click, promo code suppression that cancels out commissions earned with codes restricted in the affiliate channel, and in-cart attribution, which identifies when a shopper has left the shopping cart to find a promo code, crediting the influencer instead of the closer with the commission.

So what’s holding you back now? Is it the notion that your brand is just too good for coupons? You may want to rethink that because the majority of shoppers will go elsewhere if that’s your stance. Let’s look at some numbers to find out why.

Over 70% of the US population will not buy your brand without a discount simply because they cannot afford to do so.  

In the United States, the median household income in 2014 was $51,759. According to census data, households with HHI under 75K buy their favourite brands four of 10 times. In many cases, they can only afford to buy when their favourite items are on sale or when they have a coupon. Households with HHI over $75K buy their favourite brands eight out of 10 times. Just 29.2% of Americans have HHI over $75K.

With 70% of Americans having HHI under $70K and most acting on a brand preference only, when a sale or coupon is in play, merchants that try to “save” money by not offering a coupon are actually ignoring 70% of potential buyers who would be more than happy to pull the trigger if only they had an incentive.

Need for incentive

Recent data from Shop.org finds that while free shipping, ease of website use and a flexible return policy are important to shoppers, it’s low prices that are number one. And, according to a recent BIGinsight Consumer Survey, coupons beat in-store promotions, word of mouth, online advertising, inserts and offline advertising as the primary determining factor in deciding where to shop.

According to Valassis, 78% of consumers are influenced to buy a brand they wouldn’t typically buy due to a coupon. Inversely, 91% of brand loyal shoppers use coupons. And according to RetailMeNot, 68% of consumers strongly believe that digital coupons have a positive impact on a retailer’s brand.

It’s clear couponing has a positive effect on brand loyalty. It’s also clear that discounting opens up the brand to a broader and larger audience/market. Couple those two data points together and you arrive at the fact that coupons enable a merchant to increase its brand loyalty to a larger segment of the population that, without coupons, could never have afforded the merchant’s product in the first place.

Many say it all boils down to the fact that what shoppers want is a good deal. I say it boils down to whether or not the consumer can afford your product in the first place. If they can’t afford it, they can’t experience it and if they can’t experience it, they can’t develop an affinity for it. If a consumer can’t develop an affinity for your product, they can’t recommend that product to a friend. And if they can’t recommend your product to friends – well, you have just lost sales.

Don’t lose sales. Use coupons.

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