The Psychology of a Good Coupon Campaign

by Mia Steinberg

Have you run an email discount campaign lately? The Checkfront app allows you to apply vouchers and/or discount codes to your inventory, but we don’t always see users taking advantage of the feature. Creating a coupon is a risk, but if you use it correctly you could end up significantly boosting your clientele. Here’s a few tips on how to master the art of the coupon.

Over 90% of consumers used a digital coupon in 2013, and a significant number of them returned to the retailer after they’d used it. 57% of people say they wouldn’t have made that initial purchase without a coupon; it’s one of the best ways to get new customers in your door, and attract groups that never would have realized you existed. Email can be one of the best ways to successfully run a sale, and customers who receive coupons via email are highly likely to use them. But it’s not as easy as marking a few things down for a week; there’s some sophisticated psychology at work.

Brain Hacking with the Power of Psychology
The human brain is a magnificently complex organ, but there are many situations in which our ancient reflexes directly conflict with the realities of our modern world. There’s no better place to observe these illogical quirks than in the realm of consumer psychology, especially when it comes to sales and discounts. If you understand how to pluck those strings, you can boost the chances that your coupon campaign will be a success.

We’re hardwired to understand numbers in a very abstract, generalized way, and that instinct is difficult to overcome. Almost every retailer on earth will list a $50 item as $49.99; even though we logically know that they’re the same amount, our brains still see a good deal, because 49 is technically smaller than 50, and that ingrained judgement quickly affects our perceptions of the object’s true value. Discounts have their own special psychology, because they inevitably force customers to do some quick mental math—and unless they’re a genius with numbers, shoppers are not going to do that math very well. That’s why it’s important to test a few different wording options for your coupons; sometimes a percentage works and sometimes you’re better off with solid numbers, depending on what you’re offering and how much it normally costs. For instance, offering $14 off on a $70 item may not seem like a lot, but if you say that the item is 20% off it may attract more buyers because the math is a little murkier. Do some tests, and see what gets the best response.

Loyal or Fickle?
While almost all people who used a coupon stated their intention to return to the retailer, a discount campaign is not a guarantee of customer loyalty; according to, the real number of returning customers is around 50%, and too steep a discount can actually influence perceptions of quality. Customers who pay full price for something perceive that the product is more valuable, and are more likely to leave favorable reviews than those who got the same item at a significant discount. If you give too much of a discount, your existing customers may wonder exactly why you’re able to bring the price down so readily, and whether there are better deals to be found elsewhere. Lots of businesses have also had bad experiences with daily deal sites like Groupon, which brought a lot of discount-hungry consumers but didn’t generate much return business.

How to Succeed
Coupons are neither a guaranteed customer-grabber nor a surefire road to bankruptcy. With a well-created coupon, you stand to gain new customers and give your existing clientele a reward for their loyalty. When creating a coupon campaign, pick a deal that won’t kill your profits and seems like a reasonable promotion that still reflects the item’s worth. Five dollars off a price is a great deal for a $25 item, but not so much for a $125 item; likewise, figure out if your customers will respond better to percentage discounts or concrete dollars taken off the price. recommends that you also have a set policy about coupons in place before you launch the promotion; coupons can bring out some pretty passionate savers, so clearly limit how many coupons each customer can use and when they will expire, and make sure your employees know the policies as well. But above all: in order to entice repeat customers, you need to have a quality product. If you don’t, then the customers will move on once they’ve used their vouchers. The goal of any good digital coupon campaign is to give people an incentive to find out more about you, and try something new that they’ll love enough to pay full price for next time.