As holiday selling strategies are in full swing, conversations around e-coupons surface. Coupons – whether they are online (via email or a website) or traditional (like those in the Sunday paper which are also referred to as free-standing inserts or FSIs) – are a great sales incentive, margins permitting of course. In reviewing MarketingSherpa’s 2008 Email Marketing Benchmark Guide, I came across some interesting numbers in terms of average redemption rates. I suppose it shouldn’t come as any huge surprise that traditional coupons account for 84% of all coupons used by US shoppers. But the average redemption rate is just 1.2%. I know for a fact that I’ll occasionally put these types of coupons in my purse…only to have them sit past the date of expiry because I forget to use them. You see there’s a gap of time between the time you get the coupon and the time it takes to get to the store to purchase.

On the flip side, you’ve got online coupons that have reported average redemption rates of 5-20%. And I think the rationale is simple. When we’re online – either on a website or reading email – we’re just a few clicks away from making a potential purchase. There’s no major gap in time like the previous scenario with traditional coupons. Therefore the e-coupon sets the shopper up for immediate savings and gratification.

According to Sherpa, most agree that online coupons have a higher redemption rate than traditional coupons because online coupons are directly sought out by consumers and not received passively in the Sunday paper.

But for e-commerce marketers who take targeting and personalization seriously, these online consumers don’t have to be sourcing online coupons on their own. They can also be served or presented with very specificly targeted online coupons. Why wait for them to find your incentive when you can serve it to them on a silver platter?

At Sitebrand, we have several clients using our personalization platform to recognize and respond to various shopping segments. For the segment that might be searching for bargains, an online coupon / 10% discount type campaign makes a ton of sense. But other segments that might be looking for things like “what’s new”, perhaps you don’t want or need to offer an online coupon. Instead it probably makes more sense to present a campaign that features “See our new fall line-up…” or “Check out these top-rated products”. You get my point. Just because you can offer an e-coupon with special savings doesn’t mean you should. Understanding your buyers. This is what it all comes back to. Using web personalization technology to help you create the online dialog. This is a competitive advantage.

To see some innovative uses of web personalization – discount coupons included – check out the full line-up of Sitebrand case studies…