top of page
  • Writer's pictureEvelyn

Coupon Marketing Strategy: What is coupon marketing?

Updated: Aug 30, 2023

Coupon Marketing Strategy: What is coupon marketing?

What is Coupon Marketing?

Coupon marketing is a business methodology used to attract, engage and reward high lifetime value customers by using different forms of incentives. While it's widely used to boost short-term sales, it can also be utilized in customer relationship management strategies to deliver better customer experience tailored to each marketing funnel stage and segment, ultimately drive business growth.

Offer discounts and specials while still making a profit!

As a leading provider of behavioural coupon management and automation software, we have found that timely, targeted coupon campaigns can equally increase revenue and Customer Lifetime Value (CLTV). To learn how to build an effective coupon campaign, we need to go back to the basics. So, in this article we have covered; what is the purpose of coupon marketing, different types of campaigns, how coupon marketing work and finally how to generate promo codes.

coupon marketing strategy: what is customer lifetime value CLTV?

Why should you care about coupon marketing?

Customers are heavily looking for discounts before making an online purchase, willing to share data to receive personalized offers, and see exclusive offers as a reward and a motivation to purchase again. Here are the data to confirm:

coupon marketing strategy: infographic on stats of the importance of coupon marketing

  • Coupon Follow, 95% of millennials say they search the internet for coupons before an online transaction.

  • Salesforce, 63% of Millennial consumers and 58% of Generation X consumers are willing to share data with companies in exchange for personalized offers, discounts, experiences, and product recommendations.

  • eMarketer, 62% of US online shoppers will be more motivated to complete a purchase when receiving a loyalty program offer. (i.e., double points for this purchase, information on how close the shopper is to the next tier of the program)

  • Kelton, exclusive offers create an emotional lift for consumers who receive them, with 54% feeling rewarded and 47% feeling excited.

  • eMarketer, 52% of UK marketers use discount messaging to achieve loyalty.

  • Marketing Insider Group, (68%) of Americans say exclusive offers are more important than traditional coupons that are available to everyone.

Choosing not to integrate coupon campaigns into your marketing strategy, you will be missing out on a big opportunity, that certainly your competitors will take advantage of.

Now let's start discovering the basics of coupon marketing...

What is the purpose of coupon marketing?

Coupons and promotions are an effective way to boost short-term sales, as it's an excellent way to get rid of excess inventory and increase traffic. However, while that is often true, it is only one factor and regularly using coupon campaigns for only this purpose, will result in attracting bargain hunters or customers with low lifetime usage and end up sabotaging the company's branding.

Coupon marketing campaigns can add value to even the most brand-conscious companies!

Instead, Coupon marketing campaigns should be part of a broader mission to shape the brand, deepen the customer relationship, and drive long-term growth. With that in mind, plan each coupon campaign with the aim to:

  1. Increase product awareness to maximize customers' lifetime value.

  2. Use coupons to deliver a better customer experience at every stage of the customer journey.

  3. Make sure that the offers positively impact long-term goals.

How does Coupon Marketing work?

1. Setup campaign objectives

Align your campaign objectives with your overall marketing strategy and decide on what kind of impact you would like to make on your targeted segment's lifetime value. Think of your current position in the market and what your competitors are doing. Your objectives must be defined first, then build your campaign around them.

As an example, if your objective is to reach new customers during Christmas time and reward your high lifetime value customers. Your competition is already running discounts, to stand out, take advantage of promoting paid gift cards as gifts, and reward the buyer with a gift voucher or added points to the loyalty program. To boost sales, even more, personalize the paid gift cards by adding the recipient's name or a personalized quote.

2. Segment your customers

Mass marketing is outdated and isn't valid anymore. According to a recent study by Walker; customer experience will overtake price and product by 2020, generic; unrelated offers won't cut it. Segment your customers according to lifetime value, previous interactions, and customer journey.

3. Choose coupon management software to do the work for you

Whether you choose to build an internal coupon infrastructure or use an existing one, make sure it allows you:

  1. To manage multiple budgets and control all active coupons

  2. To monitor real-time KPIs to detect the ROI of the promotion quickly.

  3. To set up campaign restrictions and limitations to easily control campaign budget and validation.

  4. To detect any fraudulent redemption and blocks it in real-time. Have an API integration.

  5. To optimize voucher spending based on the customer lifecycle value (CLTV).

  6. To track and analyze data.

What are promo codes?

Promo codes or coupon codes are a series of randomly generated letters, numbers or mix of both, that customers enter at checkout to get a discount. Promo codes can be created in the form of QR codes or automatically applied when the validation limitations are met. There are two types of coupon codes; generic and unique.

coupon marketing strategy: what are coupon validation limitations

Generic coupon codes, just as it sounds, are a single code that can be redeemed several times by different customers, such a technique makes the offer vulnerable to abuse. If you choose to use it, we advise you to limit the campaign budget and the number of redemptions or restrict each generic code to a specific channel. Another way, have a "Claim the offer button", instead of posting a generic code. In such a case, generate and display the discount code and enable the Customer to provide you with her email.

Find out more about coupon fraud

Unique coupon codes are a special series of randomly generated codes that is exclusive for redemption validation once or assigned to only one customer. Such a technique is used for better redemption tracking, and campaign analytics and reduces any potential form of code abuse.

Customers are demanding a personalized experience and a Unique coupon code is a perfect way to deliver one as it gives the customer a feeling of being unique. It is proven to boost customer acquisition, improve retention and loyalty, and protect your business against coupon fraud.

How to generate coupon codes?

For the purpose of this article, we are going to show you how to generate coupon codes using Vouchery's user interface.

Vouchery is a coupon, discount & loyalty management, and automation platform. Where you can create, distribute, track and analyze personalized e-commerce promotions via our User Interface or API integration.

Using the Vouchery user interface, you can create timely, optimized promos in FOUR steps, segmenting your customers based on customer lifetime value (CLTV) and easily adding triggers and limitations to ensure campaign success.

Step One: Setup New Campaign

Each campaign must be well thought-through. Set up general campaign basics, like the name of the campaign, objective, your target audience and which team is responsible for this campaign, and campaign restrictions, like the maximum campaign budget and the number of

redeemable vouchers under this campaign.

Depending on your campaign objective and the target audience, you should choose the appropriate promotion type.

Step Two: Define Promotion

In Vouchery, each campaign can have several sub-campaigns running under it. In this step, you will be defining the first promotion running under the campaign created in the previous step. Defining the promotion includes 'Promotion name', 'Promotion description', 'Promotional goal', e.g. re-marketing, acquisition. Channel, eg. Email marketing, PPC.

Step Three: Reward Setting and Limitations

Vouchery allows you to set up different settings and restrictions to make sure you are sending the right promotion to the right customer at the right time. You can limit the promotion on specific product items or order values.

Define basic campaign restrictions. e.g. time when the campaign is valid and campaign categories - product types and situations when redemption is valid.

Step Four: Generation and Set up

You can generate promo codes manually or automatically triggered when a specific type of action is fulfilled, e.g. when a customer reaches a particular loyalty points amount.

Finally, personalize your codes by adding prefixes or changing its format


Your coupon codes are ready to be distributed or picked up via API integration.


Coupon Marketing is not only a method to attract bargain hunters and get rid of excess inventory. It's also becoming an integral part of each stage of the customers' journey and a way to attract high lifetime value customers through referral marketing, engaging customers in a loyalty program, and rewarding them for staying with you. Finally, it's a way to reconnect and bring back a lost customer or to say sorry!


Vouchery blog author

About the Author:

Ewelina is a Marketing Technology Entrepreneur with over 10 years of experience leveraging data to personalize customer journeys across multi-channel experiences. She has a passion for shaping consumer behavior through contextual, predictive, and personalized promotions and incentives that deliver value to both brands and customers.

Connect with Ewelina on LinkedIn.

bottom of page