Coupon Conversion Rate shows the effectiveness of your promotions for a specific coupon.
For most eCommerce businesses, coupons are one of the best marketing promotions to increase revenue. However, it’s undeniable that in exchange for an increase in total revenue, there is a loss in revenue per item.
In the short term, this may help your business increase its profit margins, but in the long run, it’s not a good idea to keep it going as this may result in losses of potential earnings.
Although it’s a great marketing strategy to make your brand known. In fact, measuring the coupon conversion rate can help you identify the effectiveness of the promotion that your sales team has made.
What is Coupon Conversion Rate?
Definition of Coupon Conversion Rate
Coupon conversion refers to the rate at which customers who received a coupon or promotional code actually use it to make a purchase.
It is a metric that can help measure the effectiveness of your coupon campaigns and promotions.
In fact, this can also help in bringing in more customers in the future even after promotions due to customers believing that the business might give another opportunity to those who have missed out.
A high coupon conversion rate indicates that the promotion was successful in enticing customers to make a purchase, while a low conversion rate may signal that the promotion needs to be revised or that it was not well-targeted to the right audience.
Using coupons also help you with increasing Conversion Rate. But you need to pay attention because too many coupons might hurt your business on the long term
Coupon Conversion Formula
The formula for coupon conversion rate is:
For example, if a business distributed 1,000 coupons and 100 were redeemed, the coupon conversion rate would be:
(100 ÷ 1,000) x 100% = 10%
This means that 10% of the customers who received a coupon actually used it to make a purchase.
Coupon Conversion Benchmarks by Industry
Coupon conversion benchmarks can vary by industry due to factors such as the type of products or services offered, the customer demographics, and the overall competition in the market.
Here are some general coupon conversion benchmarks by industry:
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Retail: The average coupon conversion rate for retail businesses ranges from 5% to 10%. However, this can vary widely depending on the product category and the target audience.
Food and Beverage: The average coupon conversion rate for food and beverage businesses is around 10% to 15%. However, this can be influenced by the type of cuisine and the location of the business.
Travel: The average coupon conversion rate for travel businesses is around 20% to 25%. This is because customers are often more likely to make a purchase when there is a significant discount offered.
Beauty and Wellness: The average coupon conversion rate for beauty and wellness businesses ranges from 10% to 15%. This can be influenced by factors such as the brand reputation and the quality of services offered.
It’s important to keep in mind that these benchmarks are just general estimates and may vary depending on the specific business and promotional strategy.
How to track Coupon Conversion?
You can optimize your promotional strategies and improve your return on investment by tracking coupon conversion.
There are several tools available to track coupon conversion rates for businesses. Here are some examples:
Google Analytics: Google Analytics is a free tool that allows businesses to track website traffic and user behavior. You can measure coupon conversion rates by setting up conversion goals and tracking coupon usage through unique coupon codes or landing pages.
Coupon management software: Coupon management software like Coupon Carrier or Voucherify provides you with a platform to create and distribute coupons, as well as track your performance. These tools allow you to track the number of coupons redeemed and the revenue generated from those redemptions.
POS systems: Point-of-sale (POS) systems like Square, Clover, or Shopify POS can be integrated with coupon campaigns, allowing you to track coupon usage and redemption in real-time.
Email marketing platforms: Email marketing platforms like Mailchimp or Vibetrace allow you to track coupon usage through unique coupon codes and links included in email campaigns.
With the use of these tools, you can accurately track coupon conversion rates and use this data to optimize your coupon campaigns for better results.
How often should you check Coupon Conversion?
It’s recommended to check coupon conversion on a regular basis, depending on the frequency of your coupon campaigns.
Weekly or Monthly: If you’re running continuous coupon promotions, it may be useful to track coupon conversion weekly or monthly to ensure that your promotions are effective and targeted to the right audience.
After Promotion: If you’re running seasonal or occasional promotions, it may be sufficient to check coupon conversion after the promotion has ended to evaluate its success and make any necessary adjustments for future campaigns.
In general, it’s a good practice to monitor coupon conversion regularly to make data-driven decisions and optimize your coupon campaigns for maximum effectiveness and profitability.
Coupon Conversion Calculator
Do you want to calculate your coupon conversion rate? Use our simple calculator below.
Simple Coupon Conversion Calculator
Coupons Distributed:
Number of used coupons:
Coupon conversion rate:
= ?
Important Things about Coupon Conversion
Here are some important things to know about coupon conversion:
Measure the success of coupon campaigns: Coupon conversion rate is an important metric to track for your business that offers coupons and promotional codes. It provides insight into how many customers actually used the coupon code to make a purchase, and can help you evaluate the success of your campaign.
Improve future campaigns: You may evaluate which coupons and promotions were most effective and make improvements for future campaigns by measuring coupon conversion rates. This can assist boost consumer engagement and revenue.
Set realistic expectations: While high coupon conversion rates are desirable, it’s important to set realistic expectations based on industry benchmarks and previous campaign results. Aiming for too high of a conversion rate can lead to disappointment and unrealistic goals.
Target the right audience: One of the biggest factors in coupon conversion rate is targeting the right audience. You should ensure your coupons and promotions are well-targeted to the appropriate customer segments to maximize conversion rates.
Metrics related to Coupon Conversion
Here are some metrics related to coupon conversion:
Customer Acquisition Cost
The cost of acquiring a new customer, including marketing and sales expenses.
Average Order Value
Return on Marketing Investment
The return on investment in a marketing or advertising campaign
Customer Lifetime Value
The estimated total value of a customer to a business over the course of their lifetime
Vibetrace can help you with coupon conversion by using its marketing automation platform to create targeted campaigns that are designed to drive sales and increase coupon redemption rates.
Vibetrace can help you create targeted email campaigns that promote specific coupons and offers to customers who are most likely to redeem them. This can increase the effectiveness of your campaigns and improve coupon conversion rates.
