85% of Online Shoppers Will Exchange Data for Discounts—Here's How To Build an Effective Coupon Marketing Strategy

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By Zach Capers

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8 min read
CAP-US-Header-A-Strong-Coupon-Marketing-Strategy

Whether you’re a clothing boutique aiming at Gen Z consumers or a personal care retailer marketing to Gen Xers, our research will help you develop a customized coupon marketing strategy.

Online businesses need to find new strategies to collect first-party data following the fall of third-party cookies and the rise of savvy online consumers who demand value in exchange for their data. Fortunately for you, our 2022 Coupon Preferences Survey[1] reveals that consumers are highly motivated to provide information to get discounts.

Let’s dive into the results of our survey and explore the coupon marketing strategies (and caveats) that will help improve data-collection efforts while attracting and retaining customers.

/ Key survey findings

  • Online shoppers are searching for (and using) coupons: 91% search for digital coupons before making an online purchase at least some of the time—32% do so every single time. A full 71% of shoppers use coupon codes whenever possible.

  • They’re willing to trade data for discounts: About half are willing to provide email, name, date of birth, and gender information in exchange for coupons.

  • Most will try your business—with a coupon: 86% of online shoppers are more likely to try a new business if they have a coupon—39% are much more likely.

  • No discount could mean no deal: 78% of online shoppers have decided against making a purchase because they didn’t have a coupon.

Coupon marketing can supercharge your first-party data strategy

Most consumers are willing to provide their email addresses (85%), gender (70%), and name (60%) in exchange for discounts. In addition, significant proportions are willing to hand over their birthdate (48%), occupation (43%), and home address (32%). We should note that a not-insignificant 7% say they are not willing to provide any information in exchange for discounts.

chart-showing-data-consumers-are-willing-to-exchan

Beyond quantitative data, online shoppers are also open to providing often elusive qualitative data in the form of customer reviews. A whopping 85% would leave a review in exchange for a discount. In Capterra’s Privacy-Focused Marketers Survey[**] taken in early 2022, only 36% of marketers said they actively collect customer sentiment data (such as customer reviews). This is a golden opportunity for businesses to collect qualitative insights, improve brand awareness, and strengthen their reputation using a discount as an incentive.

Acquiring email addresses and other data from potential customers who are already interested in discounts means you can continue reaching out with personalized coupons and other promotions during future email marketing campaigns. An added bonus is that coupon redemptions are easier to track than many other forms of online marketing, allowing you to make informed adjustments to optimize your marketing strategy over time.

It’s clear that a successful coupon marketing strategy can supplement your growing need for first-party data collection. Now you need to understand what type of online coupons to offer and how much of a discount makes sense.

Consumers prefer percent-off coupons and free shipping—but the amount depends

The humble percent-off coupon is both the most used (93%) and the most popular (62%), with free shipping also making a strong showing. Loyalty rewards (which we’ll talk more about later) and buy-one-get-one (aka BOGO) discounts are widely used by 68% and 65% of shoppers respectively.

chart-showing-consumer-coupon-preferences-

The use of free gifts and referral credits sit well behind the rest of the pack, but there’s more to this story when we dig deeper into the data. When we broke our data out among generations, the only significant differences were among the use of free gifts and referral credits, as illustrated in the chart below.

chart-showing-generational-coupon-preferences-

Gen Z shoppers are about twice as likely to use free gift promotions compared to baby boomers. Similarly, Gen Z and millennial shoppers are both more than twice as likely to use referral credits relative to boomers. Gen X sits quietly in between.

These trends did not appear among the other discount types which all showed insignificant differences between generations. The takeaway here is that if you’re marketing to a younger demographic, free gifts and referral credits should be a part of your coupon marketing strategy.

What percentage should you offer?

The answer depends on what type of product or service you’re selling. We asked consumers what type of discount they expect for different categories, the results of which you can see in the chart below.

chart-showing-how-much-of-a-discount-consumers-exp

The highest discount expectation is on clothing and apparel with well over half (57%) expecting at least 20% off and a mere 5% not expecting a discount. Anticipated reductions on personal care and general household supplies average around the 15% range while slightly more modest expectations prevail for food and entertainment. Travel and electronics are spaced out fairly evenly which makes sense considering these items can vary greatly in price, making their discounts more relative.

A key finding here is that 5% discounts do not appear to motivate consumers, regardless of the product. Consumer expectations for discounts generally begin at 10% and rise from there.

Coupon distribution channels run the gamut

Ninety-one percent of shoppers search for digital coupons before making an online purchase, at least some of the time—32% do so every single time. Most of the time, consumers find discount codes using dedicated coupon websites (e.g., Retailmenot) or receive them via email marketing, but shoppers tend to find discounts in lots of different places.

chart-showing-where-consumers-find-coupons-

Advertisements seem to work quite well for about half of our shoppers and about the same amount find coupons through online communities. Social media and company-owned mobile apps trail a bit behind, but both remain as significant distribution channels and double as rich sources of first-party data.

Other methods that didn’t make our top six coupon distribution channels include SMS messaging (30%) and postal mail (27%) with some respondents mentioning coupons automatically applied by their credit cards and coupon pop-ups on merchant websites.

Here again we found distinct differences among generations. Use of most coupon distribution channels stayed fairly even among generations other than social media and online communities.

chart-showing-where-different-age-groups-find-coup

Brands commonly use influencer marketing through social media and include a discount code for the influencer’s audience. As for online communities, sites such as Reddit are filled with page after page of users sharing digital coupon codes.

Younger generations appear to be taking extra advantage of both sources to find coupons. If your company is targeting these shoppers, it would be wise to share coupon codes on social platforms or post them in online communities.

Foster customer retention with a loyalty program

It’s clear that coupons bring in new customers, but what about retaining existing customers? The answer for most businesses is a loyalty program, which our research shows is a good strategy: 83% of online shoppers say they are more devoted to companies that offer loyalty programs than to those that don’t.

So what’s the most popular loyalty reward according to our survey? Why it’s more coupons of course, followed by credit toward a future purchase and free gifts. Loyalty members are less keen on free content and referral rewards and definitely aren’t too interested in early-access shopping events.

chart-showing-loyalty-reward-preferences-

Taking another look at our generational breakdowns, we found that loyalty programs are becoming much more popular among younger generations. Gen Z shoppers, for example, are twice as likely to say they always join loyalty rewards programs (20%) compared to boomers (9%). The chart below shows a clear trend toward an increase in loyalty program memberships, suggesting they will only become more crucial to marketers in the future.

chart-showing-how-often-different-age-groups-join

Coupon marketing caveats worth considering

Coupon marketing can go wrong in a few ways. First of all, customers might grow accustomed to coupons making it difficult to stop offering them. Moreover, customers could become reluctant to buy regularly priced goods.

A perfect example of this phenomenon is Bed Bath & Beyond’s attempt to rein in coupons[1]. In 2020, Bed Bath & Beyond moved to improve profits by reducing the use of their famously oversized and enduring 20%-off coupon, its then-chief merchandising officer telling investors “we have an overreliance on the coupon.” Two years later, the big box retailer is struggling with earnings and has announced the closure of 150 stores.

Our data confirms the danger of coupon overreliance: 76% of online shoppers would definitely (20%) or probably (56%) stop making purchases from a company if it discontinued coupons they had become accustomed to using. This is a clear red flag, and the lesson is to vary the type of coupons you offer and the cadence with which you offer them from the outset.

Another qualm some businesses have with coupon marketing is that discounts might tarnish their brand or make them appear desperate for customers. Our data suggests this fear is misplaced—89% of shoppers say they do not think that coupons or discounts make companies appear desperate for customers.

In the end, consumers love coupons and don’t think less of your company for offering them—but they might grow too dependent on them if you don’t mix up your strategy with different types of discounts or deals.

Whatever you do, don’t discount a coupon marketing strategy

As we’ve shown, coupon codes can be key to collecting first-party data, bringing in new customers, and building both brand awareness and loyalty. Some aspects of a coupon marketing strategy are universal, such as offering percent-off coupon codes of at least 10% and distributing discounts through coupon websites. Other aspects depend on your customer demographics and the product or service being offered.

Just make sure you keep switching up your coupon strategy to prevent customers from becoming too accustomed to them.




* Capterra’s 2022 Coupon Preferences Survey was conducted in August 2022 among 981 U.S. respondents to learn more about consumer preferences around discounts. All respondents indicated that they shop online at least once per week and use digital coupons. Answer choices for multiple choice questions were randomized.

** Capterra’s 2022 Privacy-Focused Marketers Survey was conducted in April 2022 among 299 U.S. marketers to study marketer actions, attitudes and reactions towards data privacy. Qualified respondents were screened to work full-time in marketing, advertising, sales, or IT departments and have some level of involvement in marketing-related activities.


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About the Author

Zach Capers profile picture

Zach Capers is a senior analyst at Capterra, covering IT security, data privacy, and emerging technology trends. A former internal investigator for a Fortune 50 company and researcher for the Association of Certified Fraud Examiners (ACFE), his work has been featured in publications such as Forbes, Business Insider, and Journal of Accountancy.

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