“Based on our information and research, b-to-b stands to benefit directly from the use of coupons in e-mail,” said Tamara Gruzbarg, digital analytics manager on the decision sciences team at Experian Marketing. “Especially since b-to-b customers are typically placing orders for higher dollar amounts, coupons can be an excellent engagement tool.”
One of the company's customers, Schneider Electric, has seen strong results with its use of couponing. With an e-mail list of 700,000 active subscribers—representing both customers and prospects—Schneider Electric is sending out e-mail campaigns several times each week, although each unique address receives only a single message per week. Although the bulk of its sales go through the reseller channel, Schneider sells refurbished products and close-outs in an online outlet, and relies on coupons to spur those sales, said Evan J. Kent, the company's global director of customer retention.
Since starting to coupon at the end of 2007, Schneider Electric has seen a “high single-digit lift” in outlet sales without hurting its primary channel. The reason: The company is very careful with its e-mail marketing program, performing testing and putting specific best practices in place to avoid problems.
“Our resellers are the heart of our sales, so in no way do we want to be competitive with them,” Kent said. “We're very careful about the way we price products, making sure we're not undercutting the reseller.”
The company boosts its open rates by using strong segmentation testing. About 20% of each campaign undergoes testing for subject line or other variables, Kent said. To date, the testing has paid off. Schneider, for example, has discovered that postcardlike messages which include a single image, a masthead and text work far better than cataloglike pages that feature a single SKU and discount.
“Hands down, the clear percentage-off offer will always outperform the SKU-based offers,” Ken said. “You can't really know what a customer is interested in, but if you give them a discount and let them buy whatever they need, it's going to meet more customers' needs.”
Kent has also learned that free-with-purchase offers aren't as appealing as straight percentage off-promotions. “Things like freebies—when you order $100 worth of stuff you get a free gas card—don't work as well,” he said. “It really comes down to what you're trying to accomplish.
The final lesson: Make sure that the discounts offered don't reduce revenue, something that's possible unless you run the numbers ahead of time, said Experian's Gruzbarg. Unfortunately, this is a common problem, she said. “We have a table that compares revenue gain for discounts of 10% and 20%,” she said. “It's pretty clear that when people send out discounts that are too high, they are losing out. You might get fewer people who use a 10% off coupon, but the company sees more revenue from the smaller group than they would from a larger group taking 20% off. Be smart [about] who you send to and how much you're offering.”