Do you use coupon codes to acquire new customers? If so, do you know which ones work particularly well? The goal should not only be to trigger the discounted purchase, but also to incentivize long-term customer loyalty.
So let's take a look at the performance of your different Coupon Codes!
Definitions
Before you dive into data analysis, let's ensure that we are on the same page with some definitions. You can evaluate the performance of your coupons based on the following metrics:
| Coupon Code |
Name of the Coupon Code |
|
Redemption Count |
Number of orders for which the coupon code was redeemed |
|
New Customer Share |
Percentage of customers who redeemed the coupon code on the first purchase |
|
AOV |
Average Order Value of all orders for which the coupon code was redeemed |
| LTV |
Average current Lifetime Value of all customers who redeemed the coupon code calculated by Sum of Net Revenue - COGS |
|
Repeat Purchase Rate |
The average number of purchases made by a customer who redeemed the coupon code |
| Discount Percentage |
Average discount of orders for which the coupon code was redeemed. This includes other discounts besides the rate of the coupon. |
|
Gross Items Sold |
Number of gross items included in all orders where the coupon code was redeemed |
|
Gross Revenue |
Gross Revenue from all orders where the coupon code was redeemed |
| Net Revenue |
Net Revenue from all orders where the coupon code was redeemed |
|
Product Return Rate |
Percentage of returned products that were included in orders for which the coupon code was redeemed; exclusively available for custom integrations, |
|
Gross Margin |
Gross Margin of all orders where the coupon code was redeemed, calculated by (Net Revenue - COGS) / Net Revenue * 100 |
| CM1 |
Contribution Margin 1 of all orders for which the coupon code was redeemed, calculated by Sum of Net Revenue - Sum of COGS |
Use Cases
After analyzing your coupon codes, you can change the incentives in your marketing campaigns according to LTV and Repeat Purchase Rate. Why is that?
It can be the case that a coupon is not that attractive to your customer, or the other way around, it might be so attractive that is filling your customer base with bargain hunters.
So stop flying blind and start to analyze which coupon is acquiring the best customers at a low expense: no longer wonder whether free shipping, percentage coupons, or absolute coupons work better.
What You Need
- Order ID
- Order Date
- Stock Keeping Unit (SKU)
- Items Sold
- Item Price
- Value Added Tax (VAT)
- Shipping Revenue
- Product Returns
- Return Date
- Cost of Goods Sold
- Customer ID
- Coupon Codes
- Discounts
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