Define the term Digital Vouchers
Vouchers that are available online, they can also sometimes be downloaded and available to use in store. Digital vouchers are available on company websites, various social media platforms, text and if you’ve subscribed, through mailing lists. Websites such as ‘Wowcher’ and ‘Groupon’ are specialised in selling digital vouchers/codes promoting discounted deals for restaurants, retailers, and other independent and non-independent companies.
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Explain the potential uses for Digital Vouchers
Shoppers use Digital Vouchers to save money. Following the recent economic downturn figures have shown digital vouchers to be a success with more than 76% of woman and 63% of men having used or gifted digital vouchers.
Businesses can use digital vouchers to sell and promote products or services as well as offering discounted prices to the customer - a win, win strategy!
Digital vouchers can provide businesses with the ability to track customer shopping patterns and preferences as well as developing a wider distribution network. Brands can also use them to collect data-the information collected can be used to create further marketing campaigns based on consumer needs and wants, their demographic, geographic location and whether or not they reddened the voucher. This strategy allows companies to serve customers better based on what offers they are responding to or interested in.
Promoting digital vouchers through social media or email campaigns drive traffic to your website and can result in an increased customer base/following resulting in a growth of new or existing customers heading to your website, enhancing your brand and creating sales.
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Disadvantages of Digital Vouchers
Digital vouchers do unfortunately have some disadvantages.
Customers may become dependable on ASOS's deals and may only part with their money when the price is discounted, this can be quite detrimental for a retailer as it can reduce sales and decrease their rate of return.
When ASOS have discount deals or have offered digital vouchers they must be prepared for an increase in website traffic, if this is not monitored customers could overload their server causing it to crash, this could lose sales and potentially new and existing customers.
Depending on the luxury of your brand digital vouchers could damage the value of the company, this may have a negative impact on your brand image. Customers may believe you have reduced the quality of your products to make up for the drop-in price or to get rid of old stock.
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Explain how to overcome the barriers of using Digital Vouchers for acquisition and retention of customers
Customer Acquisition - gaining new customers
“Acquiring new customers involves persuading customers to purchase a company’s products or services”
When starting to use digital vouchers ASOS must know which areas to target for them to be effective. Companies can overcome customer acquisition by using various strategies including customer loyalty programs and utilising social media effectively, making sure they engage with their customer to create an effective and beneficial digital voucher catering to their need/wants.
Customer Retention - keeping existing customers
“An assessment of the product or service provided by a business that measures how loyal its customers are. Retained customers tend to spend more, cost less and are a valuable reference to new potential customers” when people see existing customers that are happy, they are more likely to shop and become interested in the brand.
ASOS can overcome the barriers of customer retention by creating personalised vouchers for individual customers, this could be done by adding their name or tailoring discount to an upcoming birthday. Personalisation makes the customer feel valued and special resulting in the retention strategy being met.
For example Starbucks, Boots and other franchises or independents have loyalty/points cards so after a certain amount of purchases the customer will get a reward, this gives the consumer an incentive to buy and may pursued them to buy from your instead of going to a competitor.
Below is an example of our Digital Voucher Campaign, the voucher will be available on various multi channels including computers and
smartphones.
Explain methods of managing a Digital Voucher system
ASOS have a few challenges they need to consider when using digital vouchers. Counterfeit, fraud and social media scams all need to be considered when managing digital vouchers.
‘Fraudsters’ are becoming better in their ability to replicate vouchers therefore making digitalised coupons with this in mind is important. ASOS also need to avoid redemption fraud by introducing single-use voucher codes, so that they cannot be used over and over again.
Social media can also play a part in digital media scams as users can create fake accounts in order to redeem online vouchers.
The Digital Coupon Management Standard (GSI) provides standards for digital voucher management that allows ASOS to automatically manage data, allowing ASOS to track whether vouchers have been redeemed and monitor financial transactions across their supply chain.
GCN (Global Coupon Number) enables companies including ASOS to identify and retrieve information associated with their coupons- whether it has been redeemed, the expiry date and even the terms and conditions of the offered voucher.
All these methods are ways of managing ASOS’s digital voucher and should be used when offering discounts to customers.
Explain how to measure the effectiveness of a digital voucher campaign
When creating a campaign ASOS must have an overall objective- do they want to attract new customers, drive sales or are they promoting a new or existing product/service. Having an objective helps a brand measure the success of a campaign comparing predicted results to actual results.
ASOS can measure the success of their digital vouchers through sales, their ROI (return on investment), website hits, customer satisfaction and coupon statistics.
Sales - has there been an increase in your sales since releasing the coupon? How many people used the voucher to buy your product compared to the amount sold without the offer.
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Rate of Return - has ASOS seen any profit from the digital voucher?
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Website hits - has there been a spike in website engagement? Has the digital voucher directed potential customers to your website?
Google Analytics is a tool brands can use to measure the traffic to their website, vouchers can also contain tracking codes that link with google analytics, gathering information that can help ASOS determine whether the voucher has been successful.
Customer satisfaction - most customers now take to social media to review, showoff or complain about a product or service. Instagram, Twitter and Facebook are huge social platforms where consumers can review and post about a product or service they recently experienced. Twitter in particular is great for providing ‘real time’ customer service. ASOS can measure the positive or negative response and effectiveness of a campaign by visiting their social media pages to analyse how many people are engaged or talking about their campaign.
Coupon Statistics - How many people have redeemed the voucher? Has the digital voucher encouraged sales?
Explain the current national and international legal and organisational guidelines relating to the use of social media networking site adverts
“Social Media is the term commonly given to internet and mobile-based channels and tools that allow users to interact with each other and share opinions and content. As the name implies, social media involves the building of communities or networks and encouraging participation and engagement” - Chartered Institute of Public Relation
Social media has become the most popular form of advertising for new and existing brands, however, their are legal guidelines organisations need to follow in order to use these platforms. The Advertising Standards Authority (ASA) is the UK’s independent advertising regulator, making sure ads stick to advertising rules. These include:
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‣ Marketing to minors - the ASA will ban advertising that could result in a young persons physical, mental or moral harm. All marketed content must be relevant and age appropriate.
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‣ Discrimination - advertising should not discriminate or incite negativity towards ethnic origin/religion, gender, nationality, age or disability.
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‣ Alcohol - all adverts promoting alcohol must not be directed at those under the age of 18 or have content that appeals to the underaged market be it linking alcohol with irresponsible behaviour, social success or sexual attractiveness.
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‣ Religion - there are no rules against referencing religion within adverts however companies should avoid using religious imagery especially if its to promote a product/service that runs contrary to the belief or practice of the religion. E.g Smirnoff would not target religions that forbid alcohol.
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Explain the importance of following current national and international legal and organisational guidelines for a social networking advertising/ promotional campaign
Following advertising regulations is a legal requirement, therefore all advertisers need to abide by the ASA rules. The ASA is recognised by the government, other regulations and the court. ASOS must abide by the same rules to create campaigns which are not misleading, ethically or morally incorrect. If ASOS fail to comply they could face legal action.
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‣ Reputation - ASOS could damage their reputation which could result in loss of customers and a decline in sales.
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‣ Trading bans - ASOS might have to cease trading
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‣ Fined
‣ Imprisonment - depending on the severity, anyone involved within the campaign could be prosecuted and face court action.
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Putting a policy or at least guidelines in place for those using business social network accounts can be important in protecting a business, its staff and its customers. The layout for guidelines will depend on the choices of each individual business, but having rules in place to control online activity is essential.