The Ultimate Guide to Boosting Customer Retention Metrics with Coupons

Kirstin White | Wed May 17 2023 | Industry insights


Is maximizing customer acquisition really the best way to drive OTT growth? Think again. Sustainable SVOD growth is impossible without excellent subscriber churn management. 

Unoptimized customer retention capabilities imply growing acquisition costs and a shrinking bottom line. 

As a broadcaster, you need to understand that if you fail at retaining your existing customers, you'll need to put a lot more effort and resources into acquiring new customers. This is needed to maintain your current revenue level. Reducing customer churn is key to success if you want to grow.

Read more: The real cost of a lost SVOD subscriber 

Coupon marketing is an effective route to explore to enhance your retention game. Offering discounts and limited-period coupon-based promotions are known to spark a sense of urgency and excitement among audiences. Leveraging it can help you drive customer engagement and sales during lean periods and incentivize users to try out new offerings. 


In this article, we will discuss the benefits of using coupons for streaming businesses and cover different ways you can enhance customer retention using a coupon marketing strategy. 


What are the benefits of coupon marketing?

Coupons are an effective customer retention strategy in the video-on-demand business realm. When users get coupon discounts, they feel they're getting more value for less. 

Psychologically speaking, this triggers positive feelings of excitement, urgency, and gratification and positively impacts an individual's sentiment toward the business. 

This unfolds several benefits for the business, including:

Increased customer loyalty

When customers receive discounts and promotions often, they tend to return to the business in search of another "good deal." 


This reaction triggers a chain of repeat purchases, enhances customer loyalty, and increases the lifetime value of each customer. In other words, with a simple step, your existing acquisition efforts pay back multifold with repeat customers over time.

Increased sales and revenue

Coupons are an excellent way to incentivize those sitting on the fence to hit the purchase button and drive sales and revenue for your business. The bargain counts all the more, especially during slow periods or when introducing new products or services. 

Improved customer satisfaction 

When you hand out coupons to your loyal customers, you strengthen their loyalty further. This gesture goes a long way in creating a sense of value and appreciation. 

Moreover, it directly factors into improving customer experience - something vital amidst the increased competition and rising subscription fatigue patterns. 

So, how exactly to use coupons in the SVOD landscape for churn reduction?

Three ways to retain OTT subscribers using coupons.

Coupon marketing strategies work best when they’re appropriately leveraged. Here are three practical ways to up your customer retention metrics using coupons:

A Quick Explainer on Using Coupons Like a Pro

1. Win over free trial users

If you're offering free trials for your streaming platform, you have perhaps already known and experienced the frustrations of low conversion rates. Most broadcasters feel that getting consumers to sign up for free content is easy. However, getting them to sign up for the paid subscription at the full price is a different ballgame. 


You can combat this problem by offering coupon discounts in the first month, towards the end of their free trial. Then, customers can use a coupon at the checkout and begin their subscription if interested! Once their first month is up, the increase from the discounted to the full price will seem more encouraging.


For example, you can reach out with a message like:


"Thanks for using our free trial! We'd like to offer you a 10% discount to welcome you for the first month of your subscription!"


2. Reward customer loyalty


Once you've got a subscriber on board, your retention efforts must begin to prevent churn. You can start building your relationship by appreciating them and rewarding them using coupons.


For example, you can reach out with a message like:


"Happy Anniversary! To celebrate your third month with us, here's a 10% discount on your next month!"


Doing so can strengthen customer relationships by making them feel valued and less likely to stray and seek alternatives. Win-win for both!


3. Re-engage inactive subscribers


Inactive subscribers are usually the highest risk group for cancellations. This cohort includes all customers registered, paying, but not actively using the service. It’s easy to guess that they’re unlikely to see value in continuing the subscription when it's time to hit the renewal button. 

For retention, before churning, you need to grab their attention and remind them why they signed up in the first place. You can also pique their interest by recommending new or unexplored content. Grabbing their attention, however, is a bit trickier! This is where the coupon comes in. 

For example, you can reach out with a message like:

"We miss you! Here's a 10% discount on your next month so you can come to check out what's new with us!"

Something like this is sure to grab your subscriber's attention. Once you've got it, you can direct them to personalized content to help them re-engage with their subscription, reducing churn risk.

Now that you know how to leverage coupons, let's take a step further and understand the different coupon types and what will likely work for you, depending on your business.

How to choose the right type of coupon for your business?

n the world of coupon marketing, you can play with many coupon marketing strategies. Some of the most popular coupon types include: 

  • Percentage-off
  • Buy One Get One Free (BOGO)
  • Free shipping
  • Referral coupons. 

Effective coupon marketing requires choosing the right type of coupon to offer customers. The right answer to that depends on several factors. Some considerations when selecting the correct kind of coupon for your business include the following: 


Your marketing goals

A one-size fits all approach rarely works if you're looking to build a robust customer loyalty program. Different coupons are suited to different marketing goals, and you need to choose the coupons per your purpose. 

For example, referral coupons are excellent for growing your streaming customer base. On the other hand, percentage discounts can work great to re-excite inactive subscribers and maintain your revenues in the upcoming renewal cycle. 

Upgrade subscription

Questions to consider include: 

  • What do you want to achieve with your coupon campaign? 
  • Do you want to increase sales of a particular product or service, attract new customers, upsell other products or encourage repeat business? 

Your target audience

To make coupons work, you also need to align your coupon marketing efforts with your target audience. 

Target segment Cleeng

For this, firstly, you need to get into the details of your customer segments and understand how the different groups respond to coupons. 

For example, you may find that your younger consumers are more responsive to discounts than older consumers. So, you need to design your coupons accordingly.

Questions to consider include: 

  • Who are your target customers? 
  • What are their preferences? 
  • What are their typical buying behaviors? 
  • What triggers faster responses for them?

The type of product or service you offer

Your coupons also need to be aligned with your products and services. For example, as an SVOD subscriber, getting a free shipping coupon is irrelevant. 

But on the other hand, getting an exciting discount when you're inactive can be compelling and influence you to renew a subscription. 

Similarly, a coupon deal offering two months' price off on an annual subscription may sound more exciting and seem better than a 5% discount for an already low-priced monthly fee.

Questions to consider include: 

  • What is the product or service you're promoting with your coupon?
  • What could be the main barrier to conversion or renewal?
  • How can you make your offering more exciting

Your budget

Your choice of coupons also needs to align with your budget. When you offer coupons and discounts, you're essentially reducing the price of your product or service, and this can reduce your revenue per customer acquired. This also depends on the type of coupon. For example, percentage-off coupons can be more expensive than others. 

Questions to consider include: 

  • What proportion of your marketing budget can you allocate toward discount expenses?
  • How long do you expect it to take for a customer to pay back the discount you gave them?
  • What is the incremental revenue or payback surplus you're looking to earn from the discount using coupons?

Your brand and image 

Finally, every marketing effort ultimately builds your brand identity. So, even the type of coupons you offer must reinforce your brand values and identity.

For example, suppose your brand's mantra is providing the best service. However, you observe a specific segment getting upset due to service issues. In that case, you can reinforce your brand's commitment to service by providing upset customers with an extra month of subscription as a gesture to boost loyalty. 

Questions to consider include: 

  • What type of brand image do you want to convey to your customers? 
  • How do you measure your brand’s performance in living up to that image?

How to create coupons that align with your brand and resonate with your target audience?

Coupon campaign

Customer success with coupons is realistic when creating coupons that resonate with your audience. Your coupons must reflect your brand values and appeal to target customers. To achieve this, here are the steps you need to follow:

  • Define your brand values - As with any marketing strategy, you need to start with a clear understanding of your brand’s ethos and what image you’ll like to convey. This needs to form the starting point of your coupon strategy.

  • Choose the right coupon type - Personalization matters significantly in today's world. Therefore, you need to select the correct type of coupons for the particular audience segment you're looking to target.

  • Set the right discount level - This is a super important consideration and forms the baseline of your success. Your discount level needs to be compelling enough for the customer to act. At the same time, it needs to consider what you can afford to spend and recover ROI from.

  • Design a visually appealing coupon - Humans are visual beings and respond to what they see. This makes your coupon design a critical factor in your coupon campaign's success. Make sure it grabs attention and shares the discount and the time frame clearly.

  • Write compelling copy - It's not always what you say but how you say it. Crafting copy with a clear value proposition(the discount, time frame) and the right trigger words to spark urgency is vital to successful coupon marketing.

  • Promote your coupon - Even with the most well-thought-out coupon strategy and plans, you can only succeed if your coupons reach your target audience at the right time. Thus, your coupon distribution strategies are of great importance. 

Here are the key coupon distribution strategies you must know

You can follow several different methods to deliver coupons to customers effectively. These include:


Email is one of the most common and effective ways to deliver coupons. Whenever a user signs up on your platform, you collect email addresses. You can use these and reach out to them as per their stage in the customer journey with targeted campaigns. 

It helps to get specific and avoid a one-size-fits-all strategy when offering coupon discounts and deals. For example, you need to send a different coupon to convert free-trial users to paying users from the one that rewards existing customers for being loyal. 

Social Media

Social media is another effective channel for delivering coupons to existing and potential customers. You can post coupon codes on your social media channels, such as Facebook, Twitter, and Instagram, and encourage your followers to use them. Social media contests or giveaways requiring customers to use a coupon code to participate also make a powerful audience engagement tool.

Paid Advertising

If you're looking to ramp up the reach of your coupons, paid advertising using means like Facebook Ads, Instagram ads, and so on can be a great option when delivering your coupons. 

You can create targeted ads offering discounts or special deals and direct customers to your video e-commerce store. However, it's critical here to track the performance of your ads and adjust your targeting and messaging as needed for the best results.

Affiliate Marketing

Affiliate marketing is a technique that involves partnering with other businesses or influencers to promote your products and services. If you offer coupons to your affiliates, you can incentivize them to promote your video e-commerce store and drive your traffic and sales upwards.


Finally: Don’t forget to measure Coupon ROI

No campaign is optimized without measuring performance and re-adjusting depending on the results. If you can win back customers with a 20% discount, why would you offer 50% right? 

Therefore, in coupon campaigns, too, it's essential to track ROI. 

Some metrics to measure before and after include:

  • Net subscriber growth rate
  • Trial conversion rate
  • Churn rate
  • Average customer lifetime
  • Winback rate

Additionally, post running the campaign, you also need to calculate:

  • Payback period or the duration it takes customers to pay back the discount you gave them. 
  • Payback completion or the proportion of customers that pay back the discount
  • Payback surplus or the excess revenue customers contribute on top of the discount provided 

You can either start with some basic rules here (ex., 80 percent customer payback rate) or run some campaigns first and set your benchmarks from there. The vital thing to ensure is that coupons are making the requisite contribution to your bottom line.

Another step to remember when setting these rules is to use A/B tests to optimize these revenue metrics. That’s the most objective way to approach measuring and iterating performance.

This need not be tedious. With Core, the mechanism to run robust, automated coupon campaigns is super simple. Explore Steps: Creating a Coupon Campaign 

Wrap Up

In the competitive world of streaming, coupons make a powerful tool for retaining customers and driving business growth. They help to improve customer loyalty, increase repeat sales, and attract new customers. 

As a broadcaster, when creating and distributing coupons, it's essential to consider your target audience when building your strategy. With that, you also need to choose the proper distribution channels and track and analyze coupon performance to tune them for the best results. 

Looking to harness the magic of coupons to drive streaming success?

Check out Core

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