7 Strategies for Improving Mobile Coupon Redemption Rates

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couponsAs smartphone use continues to soar, the landscape for promotions and offers is shifting. Despite the push to digitize coupons and phase out printed materials, mobile coupon redemption rates remain surprisingly low. According to a 2015 report by CodeBroker, a shopper-marketing platform, redemption rates for coupons delivered via email sit at just 2.7%.

Rather than returning to printed coupons or direct mailers, marketers are getting savvier in the way they distribute mobile coupons to increase redemption rates and optimize the ROI of their campaigns. Here are seven strategies that marketers should consider.

1. Offer channel-specific promotions. “Deliver different content to consumers who sign-up to a retailer’s SMS or email marketing lists. This practice creates a sense of exclusivity for each of the channels the retailer uses to deliver offers. Engaged customers tend to sign-up for multiple marketing channels because they know they’ll receive different coupons. This drives both engagement and redemptions.” (Sue LeClaire, CodeBroker)

2. Get the timing right. “Unlike traditional mail and even email, SMS coupon advertisers can choose exactly when they want people to receive their coupons. Take advantage of this by sending when the offer is most appealing, and by tailoring the language to the situation. For example, at 5pm on a weekday, a marketer could send a promotion that says: “Too tired to cook? Pick up a large 2 topping pizza for $9.99 ($5 off!) on the way home tonight! Call 310-555-1212 to order, and mention this txt.” (Dan Kamins, TextMarks)

3. Keep ‘em coming. “The retailer should have a content plan ensuring that mobile coupons are delivered to consumers on a regular basis. Our retail customers experience fairly consistent redemption rates when they establish an offer delivery cadence. Redemption rates for retailers that deliver the occasional mobile coupon vary greatly from promotion to promotion.” (Sue LeClaire, CodeBroker)

4. Include an element of surprise. “The merchants we work with at Pirq are able to leverage a feature of our service called VIP Deals. After a customer makes a purchase and receives a “punch” on their phone, a VIP Deal will instantly appear on their screen. The customer wasn’t expecting this offer, so there’s an element of surprise. We work with each business owner to ensure their VIP Deal offer is enticing to customers. Merchant can update the offer at any time to test which offers move the needle and generate the most revenue.” (Keegan Hall, Pirq)

5. Use SMS to promote the largest discounts. “Provide more aggressive discounts with SMS than you do with other channels. Offers that buyers perceive as providing the most value, such as Buy One Get One Free, are much more likely to be redeemed. Save smaller discounts for email and other less effective channels.” (Dan Kamins, TextMarks)

6. Rely on data to make offers relevant. “Local businesses targeting mobile consumers via appealing emails and SMS messages with special offers see great returns on foot traffic back in the door. To make it relevant, the offer should be personalized based on existing customer data. Therefore, local businesses should start with marketing to their existing customer base. The last step of achieving marketing success by adding credibility is asking consumers to share the offer with their friends and family, so don’t forget to leverage the power of word-of-mouth.” (Stuart Wall, Signpost)

7. Take advantage of surprise and delight. “When surprise, delight and instant gratification are combined through a single offer, our merchants typically see a large lift in revenue. Here’s a good example: a customer visits a coffee shop and gets a VIP Deal for “20% off any pastry, valid today only.” The customer is surprised (not expecting the special offer), delighted (it’s a relevant offer with enough of a discount to get them to act), and the offer can be used at that moment. So, if the coffee shop owner get even a small percentage of their customers to redeem the offer, that translates into a significant amount of incremental revenue over weeks, months and years.” (Keegan Hall, Pirq)

Interviews have been edited for length and clarity.

Stephanie Miles is a senior editor at Street Fight.

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.