Best Coupon Codes – RetentionX

Coupon codes are a common tool for acquiring new customers. But do you know which of your coupon codes actually work best—not just to trigger a discounted first purchase, but to drive long-term customer value?

To answer that question, it’s essential to look beyond redemptions and analyze how customers behave after using a coupon. The Coupon Codes report in RetentionX helps you do exactly that.

If you are using unique coupon codes, make sure to group them under a single promotion so their combined performance can be evaluated accurately.

Definitions

Before diving into the analysis, it’s helpful to clarify the metrics used in the report. You can evaluate the performance of your coupons based on the following metrics:

Redemptions	Indicates the number of orders in which the coupon code was used.
New Customer	Shows the percentage of customers who redeemed the coupon on their very first purchase.
AOV	Represents the Average Order Value of all orders in which the coupon code was redeemed.
LTV	Reflects the average current Lifetime Value of customers who redeemed the coupon code. It is calculated as the sum of net revenue minus COGS.
Follow-up Orders	Indicates the average number of purchases made by customers after redeeming the coupon.
Discount %	Shows the average discount percentage across all orders where the coupon was redeemed. This includes additional discounts beyond the coupon itself.
Items	Represent the total number of items included in all orders where the coupon code was redeemed, before product returns.
Gross Revenue	Is the total gross revenue generated by orders where the coupon code was redeemed.
Net Revenue	Represents the net revenue generated by those orders.
Product Return Rate	Shows the percentage of returned products from orders in which the coupon code was redeemed.
Gross Margin	Reflects the gross margin of all orders where the coupon code was redeemed and is calculated as: (Net Revenue − COGS) / Net Revenue × 100.
CM1	Represents the Contribution Margin 1 of all orders where the coupon code was redeemed and is calculated as Net Revenue - COGS.

By default, revenue is excluding taxes, shipping revenues, and discounts. Although we highly recommend using our default definition, but you can modify the revenue calculation under Company Settings > Report Settings. Please note that this will trigger a complete re-import and recalculation of all your data.

Use Cases

Once you've analyzed your coupon performance, you can refine your incentive strategy based on metrics such as LTV and Follow-up Orders.

This analysis helps you understand whether a coupon is not attractive enough—or whether it is so aggressive that it primarily attracts bargain hunters who do not generate long-term value.

Use this report to:

Adjust incentives in acquisition campaigns based on customer quality, not just conversion rate
Compare free shipping, percentage-based discounts, and absolute-value coupons
Identify which coupons acquire customers with high long-term value at a reasonable cost
Avoid over-discounting that fills your customer base with low-retention buyers

Instead of guessing, use data to understand which coupon codes attract the best customers, not just the most customers.

Not using RetentionX yet?

Definitions

Use Cases

Not using RetentionX yet?

Related articles