🎓 Coupons earned with a friend drive more sales

Earning a coupon by doing an activity with friends makes people up to 21% more likely to buy from you using the coupon.                                                                                                                                                                                                                                                                                                                                                                                                                 February 28, 2023 | [Read Online]( Coupons earned with a friend drive more sales Earning a coupon by doing an activity with friends makes people up to 21% more likely to buy from you using the coupon. [Thomas McKinlay]( [fb]( [tw]( [in]( [email](mailto:?subject=Post%20from%20Ariyh&body=Coupons%20earned%20with%20a%20friend%20drive%20more%20sales%3A%20Earning%20a%20coupon%20by%20doing%20an%20activity%20with%20friends%20makes%20people%20up%20to%2021%25%20more%20likely%20to%20buy%20from%20you%20using%20the%20coupon.%0A%0Ahttps%3A%2F%2Fariyh.beehiiv.com%2Fp%2Fcoupons-earned-friend-drive-sales) New to [Ariyh](? Join 16,168 evidence-based marketers for 3min practical insights 💡 from the latest scientific research 🎓 to get better marketing results 📈 [Subscribe here]( Today’s insight is brought to you by… [Storyblok]( [Storyblok AI & Automation webinar]( The Online Marketing Rockstars Festival in Hamburg is coming up soon. Start getting the latest insights from industry leaders and experts before it even starts. You will also get the chance to win a free ticket to the OMR Festival, where all the digital movers and shakers will be meeting in May. [Sign up here]( Want to sponsor Ariyh? [Here’s all you need to know](. 📝 Intro Coupons are very effective at driving sales. But they’re only useful if people actually redeem them, by buying. So here’s a new technique that makes people more likely to use them. Turn them into an activity to be experienced with a friend. P.S.: Email coupons have a surprisingly strong indirect effect. Research found that [90% of the sales increase they caused was from people buying products not in promotion](. In other words, they work great as effective general ads for your brand. Previous insight: [Make an ounce worth more than an ounce]( (more insights [here]() Turn earning a coupon into an experience to share with a friend Channels: Coupons | Promotions | Discounts | Referrals | Word-of-mouth For: B2C Research date: September 2022 📈 Recommendation To unlock a coupon, ask people to share an experience (e.g. watch a video together) or do an activity (e.g. answer an online quiz) with a friend. Doing this with a friend makes both people much more likely to redeem the coupon and buy your products. [Coupons earned with a friend drive more sales] 🎓 Findings - This research studied three main ways that people could receive a coupon and then measured how likely they were to share the coupon and redeem it: - Coupon sent by a friend (e.g. forwarded email). This was the least effective. - Coupon given directly by a company (e.g. via email, in a store). - Coupon obtained by doing an activity with the friend that sent it. This was the most effective - As part of a series of 4 experiments, people were: - 26% more likely to share a coupon given on Facebook when it was earned after doing an activity with a friend (vs just receiving it from a friend) - 20.6% more likely to redeem a coupon from a drinks company on WeChat when it involved playing an online game with a friend (vs directly receiving it from the company). They were 20.8% less likely to redeem it when a friend simply sent it to them (vs receiving it from the company) - The effect weakens or disappears if the activity is with a stranger, not a friend. 🧠Why it works - We tend to look at our relationships [through two main lenses](: - Exchange relationships (i.e. paying someone to do your taxes), based on a tangible cost and benefit - Communal relationships (i.e. helping a friend move), based on building and strengthening social links - A friend referring us a coupon blurs the lines between the two relationships - mixing our social relationship with our friend with an exchange relationship for monetary benefits. This blurring of norms [makes us uncomfortable](, making us less likely to redeem the coupon. - When we share an experience with the person referring a coupon to us, we look at the coupon’s role as a social activity, not the economic incentive it provides. So we feel more comfortable accepting and redeeming the coupon. [Guide to presentation design]( Want to present your ideas in a way that ultimately wins people over? Learn from [Readymag’s Guide to designing presentations](. It will walk you through: - Concise messaging strategies - Slide design - Best tools to use Sounds good? [Click here to get it for free](. This announcement was sponsored. Want your brand here? [Click here](. ✋ Limitations - Cultural values could reduce or strengthen the effect. For example, in more individualistic cultures, or cultures where there is less of a taboo around discussing money matters, the discomfort caused by a coupon’s economic benefits may not be as strong as in a tightly-knit communal culture where money and friendships are kept separate. - The experiments were done in 2020-2021, during the height of the COVID pandemic and lockdowns, which affected normal behaviors. For example, people may have felt lonelier and more in need of social interaction, and jumped at the virtual experiences more than during normal times. It’s unclear if post-COVID the effect might have weakened, or strengthened. - In this research, the social aspect of sharing the coupon was strengthened by having the giver and receiver of the coupon engage in a joint activity - it’s likely there are other ways to strengthen the social aspect of the coupon. For example, having someone share a coupon with a friend to celebrate how long they’ve been friends may position the coupon as a social tool enough to overcome discomfort about its economic incentive. 🏢 Companies using this - Coupons centered around a shared experience between the giver and receiver of the coupon are a relatively new phenomenon, but some companies have begun experimenting with them. - E-commerce giant Alibaba ran a competition having customers and their friends form teams, cheer for one another and build a virtual skyscraper, complete with shops, in exchange for coupons. - Italian chocolate brand Raffaello ran a holiday promotion inviting customers to develop postcards with their friends and loved ones to redeem coupons. - Ecommerce site [Pinduoduo]( has established its business model around “team buying” with regular prices for normal purchases and discount prices for team buys, where a group of people together shop and buy products for themselves. Cryptocurrency exchange Binance offers users tokens (that can be used for discounts and perks) additional tokens if they invite a friend and play together [Example] ⚡ Steps to implement - Encourage your customers to refer your product to their friends - when [someone we consider a friend]( suggests a product, we’re more likely to consider it. - To make the referral effective, turn unlocking the coupon into a shared activity between the customer and friend. For example: - If you’re online, create an online quiz or game for a customer and friend to do before giving them the coupons - If you’re a physical business (e.g. gym, ice cream shop), you can offer coupons that unlock only if the customer brings a friend to workout or enjoy an ice cream together - If you can’t create an activity, try to frame your coupon as a way to strengthen social links - it may achieve the same goals. For example, you can try to frame it as altruistic (e.g. give $20 off to a friend), which other research found [boosted referrals by 86%](. 🔍 Study type Online experiments and field experiment (with 912,365 coupons for an F&B brand given away on Chinese social network WeChat). 📖 Research [“We Earned the Coupon Together”: The Missing Link of Experience Cocreation in Shared Coupons](. Journal of Marketing (September 2022) [Research from the American Marketing Association]( 🏫 Researchers - [Eric Fang](. Lehigh University. - [Beibei Dong](. Lehigh University. - [Mengzhou Zhuang](. University of Hong Kong. - [Fengyan Cai](. Shanghai Jiao Tong University. Remember: This is a new scientific discovery. In the future it will probably be better understood and could even be proven wrong (that’s [how science works](). It may also not be generalizable to your situation. If it’s a risky change, always test it on a small scale before rolling it out widely. 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