Do paper coupons work better for E-commerce?

I’m curious if anyone has simultaneously experimented with both forms of coupons i.e. sent a paper coupon to a random set of customers, and sent an e-coupon of the same value to another random set of customers. Which set had a higher conversion assuming all other customer attributes of the campaign were similar?

Behaviorally speaking, it’s difficult for most of us to throw out a piece of paper that has the words “Rs. 300 off” printed by a brand that we trust for shopping. It’s like throwing away cash, and we’re wired not to do so. In fact, people love the idea of maximizing “free”.

Google Adwords did a promotion where they gave Rs. 1500 worth of ad-credit. The coupon arrived at my home by postal mail, and I found it hard to throw it out even though it meant I had to open one more Adwords account to use it. I finally did use it on the last day of the offer.

I got similar e-coupons from Cleartrip.com and FirstCry.com, both I can definitely use, but they’ve got buried in my e-mail somewhere. When they arrived I was too busy to shop, and later they’re ‘out of sight’ hence ‘out of mind’.

With a paper coupon, I often bump into it around the house until I physically take the step of throwing it out.  That way, at least customers like me who intend to use the coupon are reminded automatically without the company having to spam everyone who did not use it.

“Going green” implies that companies should avoid paper and send e-coupons, but I’m curious if paper converts better for brands that send coupons only occasionally. One uses the unlimited storage of your inbox, whereas the other uses the limited space on your dining table or bookshelf.

This is just my hypothesis. Do share any data or behavioral anecdotes. I would love to get a conclusive answer.

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8 comments

  1. Neha

    I get e-coupons from Dominos every month. It doesn’t really tempt me to buy a pizza. But when I do place an order for pizza, I search my email and see what Dominos coupons I can use. I think this ensures I buy pizza from Dominos and not some other brand.

    Paper coupons probably work better for limited period discounts or discount on a specific date (Big Bazaar – Sabse Sasta Din) or products you buy once in a while. E-coupons work better for building brand loyalty or for products you buy regularly.

  2. KT

    Big problem with coupons and offers of all kinds is “Terms and Conditions Apply.” Trust breakers include dates before use, or minimum purchase requirements, etc. Whether they are on/offline does not matter. Consumers seem to have evolved to filter out all this noise, just the same way that people no longer pay attention to display ads websites. Its all just noise.

    Might be useful to think of coupon usage at the point of sale of goods, to help increase conversation rates. See this video ( http://www.youtube.com/watch?v=Vsgvo68inZ8 ) by http://www.trialpay.com

    • Anjali Gupta

      I agree. The terms must be customer-centric and not something that makes you feel cheated. And, the coupon must have a context. I did not use Cleartrip for a few months after being a regular user so they sent me a “You are missed” coupon to reactivate me. Trialpay sounds like a neat idea. Thanks for the link. Do you use them?

      • KT

        Haven’t used TrialPay. Speaking more as someone targeted by coupons, never pulled the coupon trigger myself.

  3. VC

    Does that mean that if Google and Yahoo! (and other mail providers) start organizing the coupons in your Inbox smartly, that would lead to higher conversions?

    For instance, a Coupons folder/tag wherein all coupons are automatically categorized (by expiry time or discount pct or categories of your interest), ready for use.

  4. It is very interesting aspect. I believe it’s location specific. At a place like India where most of the people don’t get coupons by mail it may work out very well. In places like US where people get tonnes of physically mailed coupons this may not work. What about the pamphlets which usually one find in newspaper? How affective do you think they are?

    • Anjali Gupta

      Hi Vijay, Thank you for sharing your thoughts. I agree that in the US there is an overload of coupons, and in India we often ignore the stuff that comes with newspapers since we already know that it’s not personalized and delivered to every home. I was referring to coupons that companies send out specifically to you just like newsletters, or those sent with your shipped packages to invite you to make another purchase. It is also important that the coupon is from a brand you already trust.

  5. BK

    I think it is predominantly a design problem. If tracking coupons would have been as simple as flipping channels on TV, then i guess the change from paper to e-coupons could have been so much more simpler. Here i agree with VC where he says that maybe a machine learnt system by google, yahoo tied to you reminder app could solve the problem.

    Although it would be interesting to find out if the “coupon on the dinner table” is the actual Call To Action & not just a nifty reminder.

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