Mobile Coupons | 6 Steps to Improve Redemption Rates

By Dan Slavin

Digital coupons delivered via email and accessed through a mobile device typically have a redemption rate of 2 percent or less. By delivering digital coupons via text marketing promotion, marketers can increase redemption rates to 10 percent or more.

Retailers and marketers alike are moving toward mobile coupons for some very good reasons. Digital couponing is much less expensive than traditional print coupons. Mobile coupons can be better targeted to audiences based on demographics, consumer preferences and location.

There is also the fact that traditional printed coupons have long had a dismal return rate and ROI. Perhaps most important is that mobile coupons are reaching the tipping point in consumer preference. Recent research shows consumers are split 50/50 on their preference for mobile coupons as opposed to printed coupons. That ratio is expected to continue to improve in favor of mobile.

Digital coupons delivered via email and accessed through a mobile device are typically redeemed within a range of 0.5 to 2 percent. But by delivering mobile coupons via promotional text messages, marketers see redemption increases of ten percent or more. In fact, according to research, 85 percent of consumers redeem mobile coupons delivered via promotional text message within one week.

With the move to mobile coupons a foregone conclusion, what are other ways retailers can improve their redemption rates? Below are six proven methods that not only bump up your rates but also generate actionable data in the process.

1. Employ higher-value coupons that can only be used once.

Consumers overwhelmingly prefer a higher-value coupon that they can use only once over a lower-value coupon that can be used more than once (by a 77 percent to 23 percent margin, according to CodeBroker). To deliver single-use coupons, retailers must have the ability to generate a “smart,” single-use mobile coupon with a security model that ensures …

  • The customer always receives the same mobile coupon regardless of the number of times the coupon is requested and the number of channels chosen to receive the coupon.
  • Once the mobile coupon is used, it expires and is marked as redeemed across all distribution channels to prevent reuse.
  • It is difficult for a consumer to obtain a second copy of the coupon unless specifically allowed by the retailer.

2. Leverage on-demand mobile coupons.

While redemption rates for mobile coupons are high compared with those for print coupons, redemption rates for on-demand coupons (which consumers specifically request in response to ads) are even higher.

Research firm Aberdeen Essentials found that redemption rates for coupons where customers perform an action to request a coupon can approach 50 percent. CodeBroker coupon research indicates that 60 percent of consumers would plan to redeem such a coupon within one week, which is slightly above observed redemption rates of 30 to 50 percent.

3. Conduct brief promotions.

Create promotions with a short redemption period, preferably 10 days or less. Creating a short window of opportunity inspires urgency among consumers to use their coupon offers quickly, which will drive higher redemption rates.

4. Don’t forget the reminder message.

For longer promotions (two to three weeks), send reminder messages to people who have not yet redeemed a coupon. Inform the consumer they have only a few days left to take advantage of the offer.

The best time to deliver the reminder message is two or three days before the promotion expires. Reminders are proven to increase redemption rates by as much as 70 percent.

5. Make content exclusive.

When subscribers receive exclusive, “members-only” offers, it makes them feel special, making them more inclined to redeem them. Text is an ideal vehicle to spur urgency and a sense of exclusivity; for example, you could send a heads-up note informing customers of upcoming sales or events and delivering content that is only available to those on the subscriber list. Produce content and offers that consumers can only access by becoming a member of your program.

6. Keep content timely.

Another way to improve mobile coupon redemption rates is by making your messages timely and newsworthy. Grand openings, new product or service offerings, even seasonal specials can be an effective means for capturing the interest of recipients. Another way is holding occasional text-only sales. Using text messaging as a vehicle can keep customers checking back frequently and has proven to be a great way to drive urgency, getting consumers to respond quickly.

Learn more

Of course, as in all of your mobile marketing efforts, you’ll want to test ways you can specifically improve your results to fine-tune them. To learn more about increasing your redemption rates with mobile coupons, download the whitepaper “Best Practices for Increasing Text Message Opt-Ins and Mobile Coupon Redemption.”