Creating Coupon Campaigns That Work! Coupon Series, Part 2
In our first post in this series, we discussed how important it is for marketers to know their customers, in particular when designing campaigns and incentives to promote their business and bring in new subscribers. In today’s blog, we present ideas for the specific kinds of promotional campaigns merchants create to achieve different goals and how to use Recurly’s coupon functionality to create the right incentive.
Because subscription businesses are driven by recurring revenue, they benefit from a more predictable revenue stream after a new customer is acquired. But, they also have to continually strive to provide value, month after month, to retain customers and avoid churn. Promotions based on added value or a price discount are an effective way to both win customers and retain them throughout the subscription lifecycle. Choosing the right incentive at the right time, targeted to the right customers and prospects is critical for optimizing promotional efforts.
The subscription lifecycle starts with enticing a prospect to consider your product or service. For example, many subscription merchants offer a free trial period. Some effective promotions to get this group to convert are to:
- Send a coupon a few days before the trial period ends for a dollar-based or percentage discount on the subscription price. Add urgency by including a redeem-by date.
- Or, if they didn’t sign up by the end of the trial, send them a coupon to get them to reconsider.
Another group of prospects are visitors to a merchant’s website who add items to a shopping cart but don’t complete the transaction.
- Using Recurly, merchants create a coupon for these “cart abandoners” with a discount or a special promotion (“Sign up for a one-year subscription and receive one month free!”).
- If the visitor provided their email address, send the coupon that way. If not, display a pop-up coupon when a specific visitor returns to the site (if cookies are enabled).
Discounts and promotions can also be incredibly effective for upsells and cross-sells which augment existing revenue.
- Create a special promotion to introduce a new product or new plan to existing customers to spur increased adoption.
- Or, target specific customer groups with a special offer to upgrade to a higher-value plan or to add one-time products.
- Recurly merchants leverage subscription-level discounts to limit the offer to specific plans only.
- Recurly’s coupon functionality can also be used to create discounts on bundles of subscription plans and one-time product purchases.
For subscription businesses, churn is always a concern. Customers who are at risk of churning are a prime group to target with a special offer or discount.
- Customers who aren’t using your product—commonly indicated by log-ins or activity—may be disengaged. Create a promotion that will prompt these customers to re-engage and help them see the value in your product or service.
Customers who cancel their subscription aren’t necessarily lost forever if merchants are proactive.
- If a customer cancels, let them know you noticed by sending them a coupon with a special offer that encourages them to return.
At the other end of the spectrum are a merchant’s most loyal customers. Let them know you appreciate them!
- To help ensure their continued business, offer them a special discount to thank them for being long-time subscribers.
Recurly’s coupon function has powerful features that can be used to create extremely effective campaigns for every stage in the customer lifecycle—from prospect to loyal customer to those who you’d like to see re-engaged. Merchants can use their knowledge of their customers, backed by data and analysis, to create coupons and promotions that target specific customer groups with offers specifically designed for their stage in the customer journey.
Whether based on percentage or a dollar discount, plan-specific or product-specific, or a combination of factors, targeted promotions give your subscription business a boost that will add to your monthly recurring revenue numbers and your customer lifetime value, fostering ever more loyal subscribers to your business.