Building a Digital Coupon Strategy: 9 Steps to Success

Deal-hunting is no longer the province of cost-conscious consumers – it’s a universal shopping behavior. Consumers across all income levels are spending more time looking for the perfect deal. But for most, it's not always the biggest discount that catches their eye. Accessibility and convenience are just as important.

Building a digital coupon strategy that looks beyond simple discounts is the key to capitalizing on this trend. It helps you connect with customers and create precision-targeted campaigns that drive loyalty. Here's how.

What is a Digital Coupon Strategy?

A digital coupon strategy is a targeted approach to offering discounts and deals through digital platforms. Also known as digital coupon marketing, it allows you to attract new customers, boost sales, and build loyalty. Unlike traditional paper coupons, digital offers allow shoppers to redeem incentives through multiple channels.

Digital Coupon Redemption Methods

Scannable Barcodes

A unique barcode they can present at checkout for scanning. The discount is applied immediately, creating a seamless experience for the customer.

Receipt Submission

The customer purchases a qualifying product, then submits their receipt (via your receipt validation platform) to receive cashback or rewards. It's particularly useful if you want to verify purchases across any retailer where you sell your products, without requiring retailer integration.

Code Submission

Shoppers enter a code during checkout on a website or app to receive their discount. You can distribute these codes via email, SMS, social media, or a dedicated promotional web page, making them perfect for omnichannel campaigns.

Universal Barcode

Universal bar codes are digital codes which customers can redeem across participating retailers, making them more flexible than standard scannable barcodes. This creates a more standardized approach to coupon redemption.

Types of Coupon/Offer

Digital offers and coupons come in many shapes and sizes. The top four are:

Percentage Off

Offering a specific percentage discount off the total purchase or selected items. 67% of consumers prefer percentage-off coupons over other formats, according to industry research.

Fixed Discount

Deducting a specific dollar amount from the purchase. This approach works well for high-value items where a percentage might seem insignificant or for strategic price points.

Buy One, Get One Free (BOGO)

Customers receive a free or discounted second item when purchasing another at full price. BOGO offers are particularly effective at driving sales volume and product trials.

Free Shipping

This coupon eliminates shipping costs for online purchases. 57% of consumers prioritize free shipping coupons, which makes this incentive particularly effective at reducing cart abandonment.

9 Steps to Building Digital Coupon Strategy

1. Define Your Goals

Start by identifying what you want your coupon marketing strategy to achieve. Without well-defined objectives, you risk creating scattered promotions that drain your budget without delivering measurable returns.

Your goals should directly connect to broader business priorities. Are you launching a new product? Looking to increase purchase frequency among occasional buyers? Each of these objectives requires a different approach.

Common objectives include:

• Driving new products trials
• Increasing purchase frequency
• Building basket size and volume
• Acquiring new customers
• Strengthening customer loyalty
• Collecting customer data for future targeting

2. Establish Your Target Audience

Identifying your target audience is just as important as setting your program’s goals. Understanding your audience helps tailor your offers to their preferences and behaviors.

Do you want to target:

• Potential new customers?
• Existing customers you want to retain or upsell to?
• High-value customers you want to reward?
• Lapsed customers you want to re-engage?

3. Choose Your Offer Type

Finding the right offer depends on two things: your target audience and your objectives. For example, if you want to increase new product trials, consider a BOGO offer with your best sellers. If you want to build strengthen relationships with existing customers, consider offering personalized discounts to loyalty program members.

4. Set Your Offer Rules

Your terms and conditions form the foundation of your digital offer. They outline the parameters customers must adhere to, including:

• Offer start and end dates
• Eligibility criteria
• Qualifying products
• Redemption limits

Setting clear parameters helps you prevent promo abuse, maximize your return on investment, and comply with relevant laws.

5. Select Your Redemption Methods

Choose redemption options that offer a balance of convenience and security. Scannable barcodes and receipt-based redemption methods are ideal for in-store purchases, while digital codes best suit e-commerce transactions.

The most successful programs often employ multiple redemption methods to accommodate different shopping behaviors and channels. The key is making redemption as frictionless as possible. When coupons are easy to redeem, consumers are more likely to use them and return for future purchases.

6. Pick Your Distribution Channels

Determine the most effective way to get your digital coupon strategy in front of your target audience. Typically, this should leverage a combination of your paid, owned, and earned media channels, including:

• Email
• Mobile apps
• SMS
• Social media
• Brand website
• Program microsites
• Financial media networks

What is a financial media network?

A financial media network lets you deliver targeted offers directly to members of participating banks, significantly extending your reach. Our financial media network gives you access to over 65 million cardholders across our network of banks and financial publishers, which includes the Bank of America, Triple, and Benny.

7. Implement Participation Tracking and Fraud Prevention

Implement robust systems to monitor participation and prevent coupon abuse. Dedicated digital coupon management platforms include sophisticated fraud prevention features that significantly reduce the risk of coupon misuse compared to traditional paper coupons.

They let you:

• Track user engagements and redemption patterns
• Establish single-use verification for codes
• Employ AI and machine learning to detect suspicious activity
• Create digital fingerprints for transactions to prevent duplicate submissions
• Implement two-factor authentication for high-value offers

8. Monitor and Analyze Performance

Digital coupons are a great source of customer data. With an end-to-end coupon management platform, you can consolidate insights in one place to measure program performance over time. For example:

• Track redemption rates by channel, offer type, and customer segment
• Analyze program impact on basket size, purchase frequency, and customer lifetime value
• Measure incremental sales versus discount costs
• Compare performance across different retailers and regions
• Evaluate customer acquisition costs for new shopper programs

9. Refine Your Approach

With a reliable source of consumer insights at your fingertips, you can optimize your coupon marketing strategy to appeal to your audience. Think:

• Testing different offer values, messaging, and creative elements
• Adjusting targeting parameters based on response data
• Optimizing timing and frequency of coupon distribution
• Refining the user experience to reduce friction and increase redemption
• Scaling successful tactics while phasing out underperforming ones

Continuous refinement ensures it remains effective as market conditions change, new trends emerge, and consumer behaviors evolve.

Objectives and Benefits of a Digital Coupon Strategy

A well-executed coupon marketing strategy helps you:

Drive Sales and Volume

Research suggests digital coupons increase consumer spending by up to 24%, with retailers reporting up to 50% higher conversion rates.

Attract New Customers

61% of consumers say coupons and discounts inspire them to try a new brand, making them powerful customer acquisition tools.

Build Loyalty

Personalized offers based on purchase history strengthen customer relationships. Nearly half of all U.S. consumers list discounts as their favorite kind of personalized offer.

Improve Program Efficiencies

Digital coupons eliminate printing, distribution, and handling costs associated with paper coupons while providing superior tracking capabilities.

Reduce Fraud

Coupon management platforms offer sophisticated fraud prevention features that reduce misuse compared to traditional paper coupons.

Digital Coupon Strategy Examples

Nestle's Multi-Offer Digital Barcode Program

Nestle created a custom-branded digital coupon hub hosting 30 different offers for their diverse product portfolio. Consumers could browse various "moments" (breakfast, snack time, etc.) on a dedicated microsite, select relevant offers, and receive unique barcodes redeemable at Walmart checkout.

Cheez-It's Simplified Digital Offer

Cheez-It implemented a streamlined digital coupon strategy offering $1 off any Cheez-It product. The brand embedded a widget on their website where consumers could request a digital coupon, which was delivered via email as a unique barcode redeemable at select retailers including Kroger and Walmart. Beyond driving sales, this program enabled Cheez-It to collect valuable first-party data while providing a frictionless customer experience.

McCain's Instant Win Coupon Game

To drive trial and awareness for their new JUMBO Crinkle Fries in Canada, McCain created an engaging instant win promotion. Consumers registered on a dedicated microsite and played a game for a chance to win either a $2.50 coupon or a free product coupon. This approach gamified the digital coupon experience, generating excitement and engagement beyond what a standard offer might achieve.

Delivering Value Beyond Discounts with a Digital Coupon Strategy

The most valuable coupon marketing strategies recognize that the discount itself is merely the beginning of the customer relationship. By approaching coupons as conversation starters rather than one-time transactions, brands create opportunities for ongoing engagement that extends far beyond the initial purchase.

Contact us to discuss how Snipp can take your digital coupon strategy to the next level.