Online Coupons and Cashback Offers are a proven method for CPG Brands to influence consumer behaviour. Online Coupons are used effectively by Brands to acquire new customers, increase engagement from existing customers and to retain customers for the long term.

But what coupon face value dollar amounts should Brands use when seeking to attain these marketing objectives?.

In this article we explore guidelines on the face value amounts Brands can deploy to attain different marketing objectives depending on the type of coupon offer, whether it’s a traditional paper coupon, a Print at Home or Mail to Home request based coupon, or request based Cashback Offers and Digital Coupons.

Coupon face values tend to increase according to the level of behavioural change Brands seek to encourage in consumers, which is why for example a continuity / repurchase program requires a lower face value amount than a first time trial purchase or brand switch.

This table indicates general face value guidelines Brands can use to set the amounts for their offers depending on the type of coupon and purchasing behaviour objective.

Continuity/Repurchase (10% to 20%)
Continuity or repurchase incentives aim to build customer loyalty and encourage repeat purchases. Online coupons and cashback offers designed for this purpose often have a moderate to high face value in the range of 10% to 20%. The idea is to provide enough savings to entice customers to return but not so much that it erodes profit margins.

For instance, a 10% to 15% cashback offer on every purchase made within a specific period can encourage customers to keep coming back.

To maximize the effectiveness of continuity/repurchase incentives, businesses should focus on offering deals regularly to keep customers engaged, making redemption easy to avoid customer frustration and if possible tailoring offers based on past purchase behavior to increase relevance.

First Trial Purchase (15% to 20%)
Trial offers are designed to attract new customers and encourage them to try a product. These offers often have a high face value to lower the perceived risk for first-time buyers. Examples include a 15% to 20% off promotional coupon or even “Buy one get one at 50% off your first order,” or a substantial cashback reward on the initial purchase. The goal is to provide enough value to make trying the new product or service low risk.

When designing trial offers, businesses should consider directing offers to high potential customer segments who are likely to purchase additional product in the future to maximize Customer Life Time Value (CLTV), as well as ensure ensure the trial product experience is top-notch to make a lasting positive impression.

Brand Switching (20% to 30%)
Brand switching promotions are intended to persuade customers to switch from a competitor’s product to your own. These offers usually feature a high face value to overcome brand loyalty and switching costs. Examples include 20% to 30% Off coupons or substantial cashback on a customer’s first purchase of a new brand. The high face value serves as a strong incentive to try the new Brand even though the consumer is already loyal to another Brand.

To craft effective brand switching offers, businesses should clearly communicate the benefits of switching, such as better quality, lower cost, or other features, as well as make the switching process seamless and low risk, possibly by offering easy returns or exchanges.

Pantry Loading (30% to 40%)
Pantry loading promotions encourage customers to buy larger quantities of a product than they typically would, often through bulk discounts or high-value coupons in the 30% to 40% range. Other ways to provide the significant saving is with Buy One Get One Offers (BOGO) or “buy two, get one free” or large cashback rewards on bulk purchases. The strategy aims to increase immediate sales and secure future consumption by ensuring the product is readily available in the customer’s pantry.

To effectively implement pantry loading offers Brands should offer them on products with longer shelf lives that are used frequently. Providing these offers strategically around holidays, events, or seasons when consumers are likely to stock up is also a good idea as consumers are more ready to buy larger quantities.

Setting the proper face value amounts consistent with your objectives will enhance the impact of your Online coupons and cashback offers strategy. By understanding the face value guidelines businesses can create effective marketing campaigns that drive customer engagement, increase sales, and build long term brand loyalty.

Work with the experts at webSaver and let us help you get closer to your customers through the use of personalized couponscashback offersloyalty programs and other initiatives that deliver results for Brands.
Contact us now to get started.

With over 10 years leading the Canadian online coupons marketplace and 150 Million coupon issued we know coupons. We’ve worked with 90% of Canada’s leading consumer packaged goods brands providing them with the online coupons and cashback offer solutions that generate real value for their business. Whether your strategic objective is customer acquisition, customer lift (Increased transaction size and frequency) or customer retention webSaver can help.

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