Skip to content
Building high-performing consumer promotions in 30 minutes. Register
Blog > Blog Post

Do Digital Coupons Work? (2021)

Learn how digital coupons work effectively to drive sales and foot traffic, gather qualified first-party data, and build customer loyalty.

Now more than ever, digital coupons are a highly effective tool to drive sales, gather qualified first-party data, and build customer loyalty.  Cost-effective and convenient, they also can lower barriers to entry for new and existing customers and provide key data to drive future marketing strategies. More importantly, in a noisy digital era, personalised digital coupons can provide a sense of empathy and connection between consumer and brand, an essential component to building long-term customer relationships and brand awareness.

In this blog, we will highlight how digital coupons work and why they should form a part of your marketing strategy in 2021 and beyond. 



 Digital coupons are discounts, offers, and promotions offered by a business to customers.  Digital coupons work the same as paper coupons to attract and entice customers to make a purchase; however, by existing only online they cut down on waste and allow businesses to tailor coupons to customers’ preferences. 

The ability to tailor coupons to consumer preference is crucial in 2021 as the digital space becomes more cluttered and consumers experience increased “banner blindness.”  As many marketers know, banner blindness, or when consumers actively avoid online advertising, has become a hallmark of the online customer experience. 

Faced with those issues, how do you entice customers to “see” you?  Digital coupons are an excellent tool to cut through the noise and provide your community with targeted and relevant content that they want to seek out, engage with, and then share with their network.



As mentioned, digital coupons work similarly to physical coupons in that the business is offering a discount (e.g., buy-one, get-one-free; 25% off your purchase; $10 credit) to incentivise a customer to shop with them.

Unlike paper coupons, however, digital coupons are delivered via email or SMS directly to the customer. This allows the business to track the success of the coupon and obtain valuable first-party data to inform future marketing strategies. 

Komo’s digital coupons are unique in that they work in conjunction with our gamification platform to provide targeted and relevant coupons based on the customer’s preferences.  

What do we mean by that?

Say, for example, you are in the business of selling beverages and offer an array of flavours.  Using Komo’s technology, you can create easy gamified content to engage your community and increase brand loyalty. In these games, you can also throw in a question about what flavour beverage they prefer. Based on the customer’s response, you can direct a specific coupon so they receive an offer that is relevant and timely for them. In one simple interaction, you have provided fun and valuable content that cuts through the banner blindness and makes the customer feel more seen. 



Even before Covid-19, consumers were spending a majority of their life on mobile devices. Yet, many businesses had been slow to keep pace with the digital shift.  The pandemic forced a reckoning for business globally as, seemingly overnight, the digital space became the sole storefront and avenue for brand awareness campaigns. A recent study from McKinsey estimated that “the share of digital or digitally enabled products in [company] portfolios has accelerated by a shocking seven years” due to Covid-19. 

The pandemic also forced a long period of saving for many people as the normal calendar of parties, events, and experiences was cut short. This period of abstinence is rebounding with the advent of  “revenge shopping” -- or, when consumers (especially Millennials and Gen Z) splurge on shopping after a long period of saving. Customers are eager to make up for the time and memories lost while staying indoors and living frugally and are keen to indulge in shopping sprees, holidays, parties at the pub.  

This is not just an anecdotal statement.  Early reporting in 2021 from the Luxury category, a segment highly favoured by millennials and Gen Zs, showed a 45% increase in revenue at LVMH; a 44% increase at Hermes; and Kering (the holding company for brands such as Balenciaga and Gucci) reported a 25.8% increase in sales. 

Now, as Australia comes out of extended lockdowns and an extensive vaccination rollout, retailers and economists are anticipating a surge in "revenge spending" across all industries.  This is buoyed by the fact that Australian "households are reported to have squirrelled away more than $140 billion during the COVID pandemic." 

With this massive swing from saving to spending, savvy businesses are in a prime position to incorporate digital coupons into their marketing strategy and capitalise on the consumers’ readiness to shop in-store – or be left in the dust when the trend comes to pass.   



In addition to leveraging revenge spending, digital coupons have long-standing and proven benefits that help businesses in achieving their goals.   

    • Digital Coupons are Cost-Effective for Business and Convenient for Customers and Businesses. 

Digital coupons far outweigh physical coupons in the cost-effectiveness of production and distribution.  By their nature, there is minimal physical waste or costs incurred in producing and distributing digital coupons. There are no crop and bleed marks to spend time trimming away, or fiddly bits of paper that may or may not survive being scrunched in your pocket and accidentally thrown through the wash.  

Digital coupons are sent through mobile, email, or SMS text allowing businesses to bypass costs that come with sending physical coupons. There may be small costs associated with SMS coupons, but that is far less than the costs of physically posting a coupon or including it in a large print distribution. That cost can be alleviated by sending via email.

Digital coupons are immensely more convenient to use for both businesses and customers. For business, a digital coupon can be easily created in a Komo Engagement Hub and it can be tailored to the customers’ preferences. For customers, the coupon then exists on their mobile device, ready to easily redeem (and not sacrifice to the washing machine!).  This is also a significant benefit mostly overlooked by businesses: the ease of use and storage decreases the barrier for adoption for products.

    • Digital Coupons are Trackable and Provide Immediate Data.

The trackability of digital coupons provides marketers with an invaluable source of data to supplement their marketing strategy. Marketing teams can see in real-time when digital coupons are distributed and redeemed, and the data collected can be fed into CRM tools and used to generate leads.  

Luckily for marketers, the data derived from digital coupons are generally straightforward and easy to understand: products that have high redemption rates are generally more attractive to customers!

    • Digital Coupons Build Customer Loyalty.  

Building and maintaining customer loyalty is a long-term game. Customer loyalty requires continuous customer satisfaction and commonly materialises in the form of repeat purchases. Digital coupons build customer loyalty by lowering the barriers to entry associated with trying your product. This provides an opportune time to entice and captivate your customers with products; satisfying them on the grounds of product quality or price.  

In our digital era of “banner blindness” and “revenge shopping”, the importance of building customer loyalty cannot be overstated. A new study released by KPMG highlights that the Covid-19 pandemic altered consumer expectations, with  “personalisation and empathy now the essential building blocks of a sustainable customer relationship.” Digital coupons provide an empathetic link to the customer to help ease them into your business journey.  Using Komo’s digital coupons, you can take the next step into personalised digital coupons that are targeted to your customers’ needs and preferences. 

Ultimately, digital coupons are a highly effective tool in any marketing team’s arsenal to drive sales, gather qualified first-party data, and build customer loyalty.  They are cost-effective to produce, convenient for customers to use, and provide key data to drive future marketing strategies. As we ease out of the Covid-19 pandemic, they can also provide additional personal and empathetic touches to any brand awareness campaign. 


Learn More About Komo’s All-in-One Digital Coupons Here.