According to a recent Forrester study, digital coupons are keeping up with the times, and are very relevant as omnichannel retail becomes the norm. The report says that, among 500 consumers who have used a digital coupon within the past three months, 59% stated that digital coupons and coupons codes are most likely to influence their purchase decision compared with other types of digital promotions. In addition, a strong majority of consumers will redeem a digital coupon code within three days of receiving it, and nearly one-third will redeem it immediately.

Given these salient data points, says the report, it is clear that retailers need to master the digital coupon process and identify the right partners. According to Forrester, the study yielded five key findings: 

• Consumers are using tablets and smartphones to view digital coupons as well as redeem them either online or in-store; however, the desktop and laptop computer are still the primary devices by which consumers view digital coupons and promotions
• The primary means by which coupons are received continues to be email. However, native apps using location awareness technologies and coupon sites are also on the rise and being put to use by leading-edge retailers
• There’s a real opportunity for retailers to master the digital coupon process. Easy redemption, mobile-formatted coupons, and a balanced marketing plan will drive users to the store and online properties, which provides opportunities for conversion and increased spend by consumers 
• Customers continue to believe that coupons do not dilute brand perceptions; in fact, they strengthen loyalty. This perception continues to hold true as much as it did since the last commissioned study in 2011
• Customers are likely to spend more than anticipated in-store when using coupons, so it’s critical for retailers to make the redemption process part of the customer-selling model

Over a three-month period, 68% of consumers today have made between one and 10 purchases online. Of those, 86% have used a digital coupon. Consumers continue to make purchases in the typical areas that one would expect. Restaurants, bath and beauty, and home and garden tend to be the most top-tier categories where consumers have made their purchases online or in-store. The next group of retailers, where purchases tend to be made more online than in-store, includes consumer electronics, books, movies, and music, as well as gifts and flowers.

An overwhelming 59% of consumers stated that of the different types of promotions a retailer can employ, digital coupons still hold the most sway when it comes to influencing a consumer’s purchasing decision (see Figure 2). This continues to reinforce a key finding from Forrester’s 2011 Thought Leadership Paper.

Coupons continue to positively affect brand and loyalty. What also continues to be true from 2011 is that 68% of customers strongly believe that digital coupons have a positive impact on a retailer’s brand, and 68% of consumers also stated that coupons generate loyalty. Similarly, a digital coupon increases the potential for conversion when consumers are in the cart and checkout phase of a purchase and plays a key role in combating shopping cart abandonment. 63% percent of consumers surveyed said a promotion or a coupon often closes the deal if wavering or undecided on making a purchase.

In addition to being loyal, customers are also very open to trying a new brand when receiving a coupon on a smartphone. In fact, 47% of those surveyed stated they are open to doing so. These points all add up to good news for retailers and continue to reinforce that this marketing tactic can make all the difference when it comes to generating new customers, encouraging existing customers to spend more, and driving customers to a retailer’s brick-and-mortar locations.

Digital coupons are still primarily delivered the good old fashioned way through email, and consumers are increasingly using tablets and phones to both find and redeem them. Sixty-five percent of those surveyed for this study stated that they used at least three digital coupons on their tablet, slightly outpacing the use of the desktop computer (see Figure 5).

However, retailers can’t ignore the momentum of mobile adoption. The report predicts that US mobile phone and tablet commerce will top $114 billion by the end of 2014. While smartphone revenue in 2014 should total $38 billion, tablets are expected to top that, with a total of $77 billion.

30% of those redeeming a coupon on a tablet redeem it immediately, says the report, and 60% of consumers receiving a coupon via a smartphone redeem it immediately or within several hours. Receiving a deal or savings via digital coupon can be the tipping point for a consumer to “press buy” online or to walk into a store and make the purchase in real time.

For more information from RetailMeNot, please visit here.
 

Reposted From MediaPost
Photo courtesy mindgruve.com

By Jamie Smith

Interested in some real-life evidence of how A/B testing can generate significant lift in profit?

A/B testing is not something you do once and then forget about; it's an ongoing process to extract the maximum conversion rate for your website. It's a process that includes testing every last detail to find the optimal layout, text, and images for your site. Sometimes, even the smallest changes can yield significant results.

Let's take a look at five A/B tests with significant results.

1. Customer Testimonials

You can write copy at length about how your product or service will benefit your customers and do wonders for them, but third-party credibility is much more influential.

With that in mind, how would customers respond to impartial reviews from actual customers? Could the positive experience of previous customers help eliminate any apprehensions from the prospect about buying the product?

These were the questions asked by ecommerce store Express Watches. In their A/B test, they added a small widget below the Add to Basket button, where genuine customer reviews were displayed.

IMG testimonials visual website optimizer.png

The results were game-changing for the business. The positive customer reviews reduced buyer objections and boosted their sales by an impressive 58 percent.

The best thing about customer testimonials is they are incredibly easy to implement – just add them to your site or install something like the Trust Pilot widget.

Takeaway: Always use positive customer testimonials as social proof since third-party reviews carry much more weight than what you write about yourself.

2. Higher Prices = More Revenue (Sometimes)

Not all A/B tests require you to tweak your website's design; one of the simplest things you can test is your pricing strategy.

It doesn't take a rocket scientist to determine that when you reduce your prices, you will generally make more sales, and vice versa. However, less certain is the impact the change in price will have on your bottom line – will your monthly revenue be better or worse for the pricing change?

That's where the economic concept related to elasticity of demand comes in.

To explain this further, let's take a look at a pricing A/B test Six Pack Ab Exercises ran.

Uncertain as to whether they were leaving money on the table, owner Carl Juneau tried increasing the price of his product from $19.95 to $29.95.

Although the number of conversions fell by 9 percent, this was more than offset by the additional 50 percent revenue he was receiving per conversion. In time, this simple price change would allow him to bank 36.48 percent more revenue.

Now, increasing your price won't positively affect your bottom line in every case – in some cases alower price will yield a higher profit – but it does highlight the importance of finding your profit maximizing price.

Takeaway: Pricing strategy is part of A/B testing. Test higher and lower prices to see what brings in the most revenue and profit.

3. Trust Symbols Boost Conversions

With all the scam reports out there, online shoppers are understandably cautious about handing over their credit card details willy-nilly. You need to find a way to put their minds at ease. After all, would you buy something from a website you don't trust?

Credibility and trust is something that you develop over time, just like in a dating relationship. But, there are ways to increase the trust level of your website, even if you're new to the Internet.

Bag Servant identified lack of trust as a primary reason for low conversion rates and small order values on their site, and set about implementing an A/B test to improve performance.

Initially, Bag Servant was dependent on social proof, and prominently displayed a badge highlighting their 4,000+ strong Twitter following in an attempt to establish trust.

This wasn't working.

For their A/B test, they replaced the Twitter followers badge with a WOW award badge they had received.

Because this badge was a relatively well-respected symbol in the industry, this improved the site's credibility and helped removed buyer's doubt.

The result? Conversion skyrocketed more than 72 percent.

Takeaway: Always look for ways to increase credibility on your site. This can be with awards, social followers, testimonials, or SSL trust symbols like Verisign, Hacker Safe, or McAfee.

4. Know Your Audience

You might think you understand what your audience wants, but just how well do you really know them?

Product quality, guarantees, offers, price, and shipping fees matter to all consumers. The bigger question is what matters most to your customers.

Smiley Cookie, a niche e-store, sells fresh, customized cookies as gifts for special occasions.

On their website, they wanted to add a new value proposition to help boost sales. They ran an A/B test to help them choose from the following:

• Next-day shipping.
• Discounted price.
• Free shipping on orders above a certain value.
• Fixed rate shipping for any order value.
• High quality, handmade cookies.

Smiley Cookie had expected that customers would be most responsive to the value propositions on price (discounts) and quality (handmade cookies).

But guess what? There was a surprise winner: next-day shipping.

How did that happen?

Because most customers tend to purchase cookies as a gift (and gifts are almost always last-minute things), making sure it arrives on time is imperative. Throw in the fact that cookies are perishable and need to arrive fresh, and perhaps the results aren't so surprising after all.

That's not to say that next-day delivery is the most important factor to your audience. It does show, however, that understanding what your audience really wants is vital for getting results with your A/B tests.

Takeaway: You need to find out what matters most to your customers and highlight that aspect of your product on the landing page or in the offer.

5. Accepted Best Practices Don't Work Every Time

Although a bit of logical thinking can often predict the outcome of an A/B test, ignorant Internet surfers love nothing more than throwing up anomalies that defy the conventional wisdom.

Here are four testing tips used to generate more revenue.

Remember, just because something works on one site – or even the vast majority of sites – doesn't necessarily mean it will work with you.

Let's look at an example to highlight this point: the Vendio signup form.

Now, any guide to CRO will tell you that an embedded signup form on the homepage will boost conversions; after all, if it takes fewer clicks for a user to register, they ought to be more likely to do so.

Sensibly, this was the approach Vendio took when first designing their layout.

Just to ensure they were taking the right approach, though, Vendio A/B tested their embedded form against an unconventional alternative: users would have to click an extra button to reach the signup form.

Surprisingly, this worked! With one extra step added to their conversion funnel, signups per visitor increased by 60 percent.

Takeaway: Don't blindly accept best practices. Find out what works best for you with independent testing.

Wrapping Up

Conversion rate optimization isn't an easy technique to master, particularly when there is such a wide range of variables and factors that go into testing.

And just because you've managed to increase your conversion rate doesn't mean you get to rest, especially if there are any major aspects of your site that haven't been tested. If you only focus on one page, you will be leaving money on the table.

Most importantly, the cost-per-click (CPC) to bring a visitor to your website is increasing and if you don't improve your conversion rate, your cost to acquire a customer (CPA) will continue to rise. Therefore, never stop testing, because even the smallest lift can yield big-time changes to your bottom line.