Coupon Codes Conversion Rates: Tips for Businesses (2025)

Coupon codes have always been a top priority for shoppers and brands as they can influence consumer behavior and marketing strategies. Coca-Cola first introduced discount codes in 1887 and since then discount codes have become an integral part of shopping. Today, more than 57% of American shoppers prefer using digital coupons, while 43% of consumers opt for paper coupons.

About 51.55% of the United States population has redeemed coupon codes in the previous year. This shows discount codes are still relevant and brands can note this statistical data to improve their sales number and conversion rate. In this blog, we will learn how coupon codes help brands increase their conversion rates. We will also cover the drawbacks of using coupon codes as a strategy.

Why do brands include coupon codes in their strategies to increase conversions?

Here are some of the key reasons why various organizations and brands include discount codes in their strategies to boost their conversion rates:

Giving More to New Customers

Coupon codes are also useful for brands targeting potential customers or buyers. These discount codes may make their buyers opt for their products or services. Personally, as a regular online buyer, I always look for brands that offer 1st purchase discounts or prefer brands that run regular sales.

To make things simpler for you, I have come up with an example of Lenovo. The brand comes with a newsletter subscription page to allow its customers to stay updated with the upcoming sales. So, when I visited its official website and tried to subscribe to its newsletter, it provided information about additional discounts for new users as well.

Like Lenovo, other brands also adopt this option to attract new customers to make their first purchase on their website. Let’s say, I want to purchase a $1000 Lenovo laptop and get an additional $100 off on my first purchase, I will go for it. Everybody loves discounts, right?

If you are a brand owner, you can implement this strategy as it will in the long run help you in getting a higher number of customers who will be able to buy a product from the particular brand for the first time.

Reducing Cart Abandonment

According to reports, a majority of online buyers in the US abandon their carts before making any purchases due to a lack of offers and discounts. Brands can offer exclusive coupon codes, especially during checkout, which can attract their customers to finalize the transaction by reducing the total price.

Enhancing Customer Perception

Coupons are effective in giving customers the perception of value since customers feel that are being given a discount. This experience and saving money at the same time can result in better conversion for the brands because buyers are more likely to respond to time-bound offers.

Encouraging Repeat Purchases

Loyalty coupons are one of the opportunities for brands to increase customer loyalty. Brands can provide coupons for the next purchase will make the existing customers come back and make them more loyal.

There are a ton of brands that have implemented this strategy to increase their conversion rate. As a coffee lover, I can give the example of the Starbucks Rewards program. With this loyalty coupon strategy, Starbucks targeted its regular customers by providing them with personalized coupons and discounts, like free drinks and bonus stars. This increased Starbucks' conversion rates by a big number.

How can brands boost their conversion rates with coupon codes?

Below I have compiled a variety of ways or strategies that brands can adapt to increase their conversion rates by including coupon codes in their strategies. If you are an owner of an organization or a brand, you should take note of these strategies or techniques to convert your casual customers into loyal buyers.

Making Deals More Personalized

Brands can offer promotional codes by studying the shopping behavior or decisions of their customers. They can follow the shopping behavior of their shoppers and develop vouchers which can ultimately enhance shoppers' interests and conversion. Some brands attract customers by adding pop-ups while the buyer visits their website or exiting it.

To make it better understandable for you, I have gone through various reports. According to these reports, some of the pop-ups used by brands can result in up to 50.2% higher conversion rates. So, implementing the right discount pop-up will help you increase your sales numbers.

Offering Time-Sensitive Discounts

Brands can also use techniques such as time-sensitive promotions that can help influence a customer's behavior. If their customers are aware that the code will be expiring soon they will be inclined to rush into buying something that they would have otherwise not bought.

I can explain this by taking the example of MMAWarehouse.com. They have implemented this strategy and succeeded in increasing their conversion rates. You can check the below screenshot from MMAWarehouse and see how they have applied time-sensitive discounts through pop-ups.

Providing Exclusive Coupons for Email Subscribers

Offering exclusive discount codes to email subscribers or loyal customers can create a sense of community and appreciation. By making the offer feel special, brands can encourage repeat visits and generate more sales from their existing customers.

Pushing Social Media Promotions

Brands can share their coupon codes on social media platforms to reach a wider audience. This will encourage their followers to share the code or tag friends for an additional discount can boost the brand's visibility and attract new customers.

Applying Auto-Redeemable Coupons

Another approach that brands can implement auto-redeemable coupons at the checkout page. Last week, I was checking out some Levi's jeans on its website, and guess what! They have implemented the auto-applicable coupon strategy on their website.

Wondering how this works! Then once you have selected a product from the website, added it to the cart, and proceeded with the checkout, the coupon will be automatically applied to your order on the payment page. This way Levi's is doing the hard work for its customers allowing them to enjoy shopping. Simple yet effective, right? So, you can also implement this strategy in your website, to increase your sales.

Drawbacks of Using Coupon Codes as a Strategy

Below I have listed some of the drawbacks of using discount codes as a strategy:

Drop in Profit Margins

Brands that use different coupon codes frequently are likely can experience a drop in their profit margin. Continuous use of the discount makes customers reluctant to pay the full price which will result in the reduction of the profit.

Decreased Brand Value

After doing extensive research, I found out that big brands often avoid offering coupon codes frequently as over-reliance on these discount codes can cheapen their image, making it appear as though they rely on discounts to attract customers. This can reduce perceived brand value, especially for premium or luxury brands.

Increased Cart Abandonment

Customers abandon their carts if they fail to find an active coupon code. This can influence conversion rates where some consumers will take a lot of time looking for a discount than actually completing the purchase.

Short-Term Gains, Long-Term Challenges

Coupled codes can help brands increase conversion rates in the short run; however, they do not foster loyalty. Shoppers who are mainly attracted by the exceptional offers may shift to other competitors with similar deals becoming less loyal in the long run.

Conclusion

Coupon codes can increase conversion rates for brands by attracting new customers, encouraging repeat business, and reducing cart abandonment. However, brands should balance their use of discounts with maintaining brand value and profitability. To achieve long-term success, they must implement coupon code strategies that offer customer loyalty and align with their brand identity.