Uncovering the Hidden Agendas behind the coupon paradox!
The problem
There are two types of people in the world: People who try to find the best discount coupons for any purchase, and others who don't give a darn. This post is for the former people, my people 😎.
Imagine this scenario: You're doomscrolling like your life depends on it 📱💀, and suddenly you come across an ad for a store that has interesting products. You quickly visit the website, add your favorite products to the cart 🛒🛍️, and click on the Checkout button only to encounter the dreaded, blank, and uninviting 'Apply Coupon' field. The frustration 😫 that creeps in as you frantically search the internet 🌐 for elusive discounts 💸 is all too familiar. It's a hassle that leaves many scratching their heads, including me, wondering why technology hasn't made this process smoother.
Another scenario 🌙: It's late at night, you're doomscrolling again, and you feel hungry (Of course 😄). You open your favorite food delivery app, browse multiple options, add your choice to the cart 🛒, and land on the payment page only to encounter the 'Apply Coupon' field again. You have to click on the field to go to a dedicated coupons page. Most of the time, there's a highest discount coupon shown at the top of the coupons page and other lower discount coupons below it. You sarcastically think to yourself 'Wow, what a great user experience. Thanks for making me do these extra steps of opening the coupons page and letting me manually select the lowest discount coupon code available.'
As a user, when you keep coming across these scenarios, it raises an intriguing question❓: "Why are companies not auto-applying the best discount coupon for me?" While users may yearn for a more hassle-free shopping experience, companies often prioritize their bottom line. As a PM, it's an interesting problem for me to think about. Let's delve into the nuanced perspective behind this.
Understanding the problem
First off, let's look at the potential reasons why companies may not be doing it 🕵️♀️:
🤖 Technological Challenges: Auto-applying coupons requires data on users' shopping preferences (Privacy anyone 🔓) and sophisticated algorithms. It's not a simple task, and many apps may lack the technical infrastructure to execute it seamlessly.
💰 Profit Maximization: Except for non-profits, all companies exist to generate money. Companies stand to gain more revenue without auto-applying as not all users possess coupons, and not all coupons are equally lucrative 💎. Leaving the responsibility to users can result in higher earnings from those who pay the full price.
💽 Data Harvesting: Data is the lifeblood 💉 of modern companies. When users diligently search for and input coupon codes, they unwittingly provide valuable insights into their preferences and behaviors 🕵️♂️. Companies leverage this data to refine marketing strategies and product offerings 📈, all the while users believe they are saving money 💸.
🎟️ Coupon Partnerships: Many companies have strategic partnerships with coupon websites and affiliates 💼. Auto-applying coupons can potentially disrupt these relationships.
😵💫 Advertising: Yes, all the banks and other financial organisations are there on the coupons page to have your eyeballs on them and nudge you to get their card by showing discounts through their products.
😈 User Experience: While users want savings, they also value a smooth, intuitive shopping experience. Auto-applying coupons can sometimes backfire by making the checkout process overly complicated for users who are used to applying coupons manually.
Solving the problem
As product managers, we have a vital role to play in bridging the gap between user expectations and business interests. Here are some ideas to work towards a user-friendly solution which I have seen some companies already testing:
🤝 Partnerships with Banks, NBFCs & Fintechs: If companies themselves can't bear the discounting costs and can't offer any discounts, they can partner with financial entities to offer co-branded cards and share/offload the discount expenses to these partners.
✅ Opt-in to Auto-Apply the Best Coupon: Give users the choice to opt-in to auto-applying the best coupon available and make it easy for them to change the coupon if needed.
ℹ️ Showing Necessary Information Upfront: Show the best/recommended coupon near the coupon field with an Apply button and show all other options inside the coupons page. If there are no coupons available, show it upfront. Don't make the user go to the coupons page only to find out that there is nothing to apply.
Closing thoughts
These are just a few starting points, and this can be a narrow view of solving this. There are definitely more ways to tackle this problem going upstream (🛒 Run a sale where products are discounted upfront without any coupons, etc…) or downstream the funnel (🎁 Loyalty programs, 💎 Offer some form of rewards with every purchase that can be redeemed later, etc…).
All these considerations aside, I refuse to believe that there have been smart PMs who A/B tested the hell out of the 'Apply Coupon' field and couldn't get a p-value of <0.05 for something better than what we currently have 🤷🏻♀️.
I would love to hear the thoughts of PMs who have worked on this and share their perspectives.
This was a fun one for me to think about and write 😄.
Thanks for reading 🙏🏻!