China is one of more than 30 countries to which Newegg plans to expand its marketplace in 2017.
Narrow down the list of target customers, the offer and the preferred channel for the campaign that will maximize ROI.
In the current e-commerce climate, it is essential that online retailers are able to adapt in various ways in order to attract new and existing customers. One such method is using digital coupon promotions, which not only appeal to the customers who will often make subsequent purchases after receiving a coupon, but also allow online retailers to track and measure profitability, enabling more focused marketing spend.
The key is to design a coupon campaign that best targets customers and maximizes return on investment (ROI). The following five-step approach does just that and shows what marketers can do to access the right customer data, apply predictive analytics and gain the necessary intelligence to maximize the effectiveness of coupon promotions.
Spell Out the Objective
There can be a variety of reasons for creating a coupon promotion, such as increasing awareness, rewarding loyal customers, generating a larger customer base and more. Specifying a clear objective will outline the purpose of the campaign and dictate the precise data to use to perform analysis.
Apply Predictive Analytics Using Previous Campaign Data
As the title reads, applying predictive analytics by utilizing data from earlier campaigns designed with a similar objective is an important step. The results and insights from such analysis are valuable in interpreting customer behavior as it relates to different sorts of offers. They can also help in predicting which customers are inclined to provide the desired response rates and future sales.
Determine a Scenario That Will Provide the Best ROI
The subsequent step is to narrow down the list of target customers, the offer and the preferred channel for the campaign, such as an online coupon, a text message or an email. The combination should be one aimed at delivering the strongest ROI.
Monitor and Measure
Now that the target audience and offer have been chosen, the coupon is ready to be sent out. It’s important to note that after the coupon is put into action, monitoring its performance is a crucial step in determining whether to increase or stop the promotion, depending on how the campaign is doing. Comparing the sales and engagement rates of the customers that received the coupon with those who didn’t is a beneficial tool for measuring the promotion’s effectiveness and can be done by completing an A/B test (comparing two versions of a web page to learn which one has a stronger performance).
Implement Findings in Future Campaigns
Once the results have been collected and analyzed, the final step is to take the reviewed findings and use them to help shape future campaigns and make them more effective. Keeping the data stored in one location is immensely helpful in gaining insights quickly and efficiently.
In using this five-step approach, marketers will have a strong framework in place for creating and implementing effective digital coupon promotions—attracting new and existing customers and increasing ROI.
Ugam provides online retailers and brands analytics technology in areas such as pricing and assortment.