Enhancing Engagement by Implementing Vouchers in Web Platforms

Hey, it’s the products that your potential customer abandoned in their cart. Again. 

For business owners, especially those who offer products and services online via eCommerce shops and subscription-based websites, this scenario may be a common pain point. 

Surely offering products or services at a discounted rate means that your business is losing out on profit? 
Quite the contrary. Offering vouchers can be the push a business needs to convert potential online customers from window shoppers to loyal and returning regulars. 

In this article, we will dive into why vouchers are so good at growing businesses by looking at their key types, aspects, benefits, and development. 

WHAT ARE VOUCHERS?

Vouchers (sometimes referred to as coupons) are a very effective way of increasing sales on your eCommerce shop, subscription-based website, or SaaS (Software as a Service) platform. For merchants, it’s an effective way to promote your brand and sell more products or services which ultimately results in increased revenue, while for shoppers, it’s an easy way to purchase products or services at a discounted rate. 

Vouchers are not a new concept and most people are familiar with how they work. In fact, vouchers have been used for decades, way before the Internet was even conceived.

Though the concept of vouchers tends to be simple, there are a few complexities in how they are generated combined with how and when they can be redeemed. 

THE CONCEPT OF VOUCHERS SIMPLIFIED

While the underlying mechanics, intricacies, and functionality of how the entire voucher system works both from a generation and consumption perspective, can get quite complex, the actual concept of vouchers is quite simple. 

The basic principle is that a merchant (company selling a product or service online) has the ability to generate vouchers. There are many different types of vouchers that we will explore further down in this article. The generation is typically done in a secure web portal that is only accessible by the webmaster, sometimes referred to as an admin portal or a “back end”. 

Each voucher has a unique voucher code and some sort of discount applied to it. Now that the vouchers have been generated, the merchant distributes them to their prospective customers in whichever way they see most suitable, examples include in their newsletter or on a social media post. Many new businesses can offer a voucher for an eCommerce shop to first-time shoppers. 

Prospective customers get these vouchers and feel obliged to use this voucher, sometimes the deals are too good to miss out on! So, they head on down to the merchant’s website, where they are able to either shop for various products like services or subscribe to some sort of online solution by adding them to their shopping cart.

At the checkout stage on the website or web application, prior to being asked to make payment, they will have a step in the purchasing process or a section as part of the checkout process, whereby they are able to enter a voucher code. 

Once entered, the system will cross-check if that voucher code exists, if it does, further checks are done to ensure that the voucher is valid and can be used in this transaction. If the voucher code passes that second test, then the discount associated with that voucher is applied. What this means is that the total amount of the cart or subscription is reduced by the voucher amount. The shopper can then proceed to make payment and the journey is then complete. 

HOW ARE THE VOUCHERS CREATED?

Each voucher is essentially a representation of a discounted value, which can be either an actual monetary amount or a percentage (%) discount amount. Each voucher typically has a voucher code that identifies the voucher. 

 You may be wondering how these vouchers are created. There are two distinct ways that these are generated: bulk uploaded or system generated. 

BULK UPLOADED 

Bulk uploading of vouchers is achieved by allowing a user to upload an Excel or CSV file that has predefined formatting to state what each column contains.  

What this means is that the vouchers are generated outside of the web platform and are imported into the system via this bulk upload facility. 

This typically happens when there are a high number of vouchers that need to be added to the website.

SYSTEM GENERATED

An alternative method to creating vouchers is to have them generated by the system. What this means is that the user (typically an administrator) that generates the vouchers defines certain parameters and then leaves the rest up to the system. By system, we mean the web application. This web-based platform is programmed so that it can dynamically generate vouchers and then serve these to the user. This is where the secret sauce lies as there are various coding tricks to generating these vouchers, such as using randomisation algorithms. 

Once the system has generated the vouchers, they are available to the user to be distributed in whichever way possible. 

WHAT ARE THE DIFFERENT TYPES OF VOUCHERS?

You’d be surprised to find out that there are actually quite a few different types of vouchers, each with its own distinguished rules of how they are generated and how they are redeemed.

1. AMOUNT-BASED 

How it's generated

Quite simply, the voucher has a discount amount that is associated with it. For example, each voucher allows a consumer to get R50 off their purchase. 

How it's consumed

When a consumer is checking out and has inserted the voucher number, the discount amount is subtracted from the total purchase amount. 

2. PERCENTAGE-BASED 

How it's generated

This is similar to the amount-based voucher with the main difference being that the discount amount is a percentage figure and not an actual amount. For example, each voucher allows a consumer to get 10% off their purchase.

How it's consumed 

During the purchase and checkout process (depending on the type of website), the voucher number is entered and the percentage discount is applied to the total purchase amount.

ADDITIONAL FEATURES MERCHANTS CAN INCORPORATE INTO THEIR VOUCHERS

1. TIME LIMITATIONS 

What it does

When generating vouchers, it’s always important to create some sort of urgency for users to use the voucher, as this entices the user to make use of the voucher or lose out entirely on the potential savings. 

Time limitations allow for the specification of when the voucher can be used, in most cases this is when the voucher expires, however, it’s also possible to define when the voucher is valid. 

For example, a voucher may be available from 1 October to 31 October.  

During the purchase process and once a voucher has been inserted, the system checks that the voucher is valid and can be used at the time of purchase.

2. PRICE LIMITATIONS 

Minimum purchase amount

Vouchers, interestingly enough, can have even more options and limitations when it comes to what consumers can do with them. A minimum purchase amount can be set for a voucher, meaning that if the total purchase amount doesn’t exceed the minimum purchase amount requirement, then the voucher cannot be used. 

For example, if a voucher has a 10% discount and a minimum of R2000 purchase amount, if a consumer were to purchase products or subscriptions worth R1500 and attempt to use the voucher, this would be invalid and the consumer would not receive the discount nor process the voucher. 

MAXIMUM DISCOUNT AMOUNT 

This option typically is used in conjunction with percentage-based discount vouchers. How this works is that the vouchers specify a maximum discount amount that the consumer may receive for their voucher. This is done to limit the total discount monetary amount that that consumer can receive and is especially relevant when there are high ticket items being purchased. 

By means of an example, let’s say a voucher has a 20% discount associated with it, together with a maximum discount amount of R2000. Therefore if a user had to purchase products or subscriptions for R12000, the discount amount would in theory be R2400, however, due to the maximum discount amount being set at R2000, the consumer would only be eligible for the R2000 discount.  

SINGLE VS MULTIPLE USE

Another option that can be set for vouchers is whether the voucher can be used once or be used multiple times. A single-use voucher can only be used once, therefore once it has been successfully redeemed, it can no longer be used. 

Multiple-use vouchers allow a voucher to be used over and over again, by the same consumer or other consumers. 

USER-SPECIFIC

These types of vouchers are slightly more complicated and work with web platforms that allow consumers to have an account and log in to their profile. 

In this instance, when a voucher is created, there is an option to specify which consumer or consumers the voucher is allocated to. 

Therefore, when it comes to the redemption of the voucher, the user needs to be logged into their account, so that the system can validate who they are and if the voucher has been allocated to their profile. 

LOYALTY-BASED

Loyalty systems or programs offer different types of vouchers or rewards based on the loyalty level or ranking of the consumer. If the consumer shops frequently and spends a lot at a shop or eCommerce shop, they could have a high ranking in a loyalty program. 

Loyalty programs may work in different tiers: bronze, silver, and gold. The merchant may specify how much or how frequently a consumer must shop from them to be eligible for the different tiers in the program. 

When vouchers are generated by administrators, they are able to specify which loyalty level the vouchers are allocated to. This allows for different types of vouchers to be created for each loyalty level. 

Similar to the user-specific vouchers, consumers would need to be logged into their profile and their loyalty level needs to be checked at the time of the voucher being redeemed, to validate that they are at the correct loyalty level and that they are in fact eligible to redeem the voucher. 

BRAND-SPECIFIC

This scenario applies mostly to online shops, where there are typically many brands being sold.

Vouchers can be created and allocated to a specific brand. For example a R500 voucher for the Nike brand. 

This works by generating a unique voucher code that can only be redeemed for the selected brand’s products. This is a clever tool that the brand can use to drive sales and make its brand stand out in comparison to other similar products available on the platform. 

If a shopper is looking for athleisure on a platform that offers the products of many brands, they may be spoiled for choice. Offering a voucher on products bought from a specific brand like Nike would perhaps persuade them to purchase the new Nike running shoes that have a voucher code for 20% off the listed price than to purchase an Adidas pair of shoes at full price. 

BENEFITS OF VOUCHERS

Vouchers can dramatically increase engagement and sales by creating a sense of hype and urgency. When shoppers can redeem a voucher to purchase a product at a discounted rate, they may feel more compelled to buy it than to weigh out options. 

Vouchers help in completing purchases for customers who still might be on the fence about buying a product since a voucher can have a limited time in which it can be redeemed.

Vouchers can be used in conjunction with loyalty programs to offer rewards to frequent, valuable customers. This can motivate customers to spend even more to get to the next level of their loyalty program. 

Vouchers can be an excellent marketing tool tool. If a brand has limited visibility compared to other brands, especially on a shopping platform that sells various products from different brands, offering a voucher on products from a specific brand may be some consumer’s first purchase of that brand. They could turn into returning customers regardless of whether a voucher is offered in their next purchase if they are satisfied with their products. 

TO END OFF 

Vouchers are simple but powerful mechanisms that brands can use in their marketing, customer engagement and sales strategy. 

Vouchers are quite customisable by the merchant and popular among consumers already due to their benefits. Any business can offer any type of voucher on their products or services. With so many types of websites, web apps, and subscription platforms available, there are multiple easily developed voucher options businesses can offer. Who knows! The next voucher you offer may lead long-term and returning customers to your business!

Elemental has nearly two decades of experience in building state-of-the-art eCommerce shops, web platforms, and subscription-based services. We are excited about helping any business achieve their web development needs and potentially excel in their sales by incorporating features like voucher options into their bespoke web platform. You can reach out to us to find out more about our services and strategies that could help your business succeed.