If you’re worried about running coupons due to price sensitivity or brand perception, here are some facts we think you should know…
🎫 Coupons are a powerful tool that:
- Boosts sales velocity
- Increases your best seller rank (BSR)
- Has long-lasting effects when combined with targeted advertising
What some brands don’t realize is that the actual cost of running a coupon on Amazon isn’t the same as a sale price since customers have to actively apply the coupon.
Typically, the Pilothouse Amazon team sees 40%-60% of people actually apply the coupon.
What does this mean?
When setting your coupon value, you can set it higher than your target discount. You get to show buyers an enticing offer but still end up in the black with the percentage of shoppers that take advantage of it! For example, if your brand is running a $10 coupon, but only 50% of purchasers clip the coupon, the true cost was only $5/sale. 🤯
Additionally, you will still usually see a boost in your conversion rate (CVR). The majority of the Pilothouse Amazon coupon experiments have resulted in an increase of units sold which translates to a boost in net profit.
For example, on a recent two-week makeup product coupon promotion of 20% off, the team saw:
- 52% of purchasers apply the coupon
- 2.19% increase in conversion rate (6.92% up to 9.11%)
- 34% increase in revenue
- 23% increase in profit
- Best seller rank (BSR) increase: 10,281 (16,044 to 5,763)
Sure, coupons are handy to boost sales velocity and profit, but the true benefit is a lasting effect on increased rank and relevance. 👍
By being deliberate when you run a coupon and supporting it with targeted advertising for the keywords you are trying to rank for, you can increase sales volume through your target keywords.
If done correctly you will see a ranking increase and increased efficiency in your advertising, which in turn will make it easier to maintain your new rank moving forward.
Typically, the team runs their coupons for two-week sprints in order to maximize the benefit, give enough time to impact sales velocity, and not fatigue your customers.
For discounts, 20% has been a sweet spot for us to increase sales velocity, but even a dollar or two can have a measurable impact. As always, test it out for your brand and follow the data, happy testing!
Not sure how to maximize your returns and impact on Amazon? No worries, the Pilothouse Amazon Team has ya covered. Reach out!