Increase retention and build repeat customers with dynamic coupons

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Acquiring a new customer can cost FIVE times more than retaining an existing customer, so it’s important that you give users a good reason to keep coming back. Promotions are a key marketing tactic to tip the scales in your favor. In this recipe, we’ll learn how to give a repeating coupon to a targeted set of customers, helping them to realize the motivation they need to turn from occasional users to recurring spenders.

When assessing your user onboarding, explaining the value of your product can be a key way to improve your 30-day retention rate. Facebook famously used their ‘Seven friends in 10 days’ philosophy — getting people to connect on their platform explained their value proposition in a way that was sticky in terms of retention. 

Coming up with your own North Star metrics will be an individual decision, but we are going to use the example of a theoretical rapid delivery service. The aim of the campaign in this instance is to outline to the user the value of having groceries delivered — quickly and cheaply — with a minimum of effort. Let’s imagine that our analytics show that a user who makes four orders has a 15% higher retention rate than the median user.

There are a number of reasons why this might be true, but our interviews have shown that as few as four orders can be enough for users to become more familiar with your app and form a shopping habit. 

In order to incentivize repeat purchases, we’re going to offer 100% cash back on the first order over $10 — which can be redeemed over the next three purchases. So if a customer spends $18 on their first order, they’ll receive a coupon that gives them $6 off their next three orders. 

To do this, we’ll need to use Segment to check that the user is a new user, Talon.One to put some limits on how much cash back users will receive and when, and a customer engagement platform to send them their coupon. 

Step 1: Configure Talon.One as a destination in Segment

This step will allow us to use Segment audiences as a reward hook in Talon.One.

1. Search for Talon.One in the Catalog, select it, and choose which of your sources to connect the destination to.
   

2. Enter the “API Key” into your Segment Settings UI. To find the API key, you’ll need to use your Talon.One Dashboard. Select your Application > Settings > Developer Settings > Create A New API Key
   

3. Back in the Segment Settings UI, add your Talon.One Application Domain Name (e.g. https://demo.talon.one).

Once you’ve finished setting up in Segment, there are a few settings necessary in the Talon.One UI. You’ll also need to add at least one Talon.One custom attribute — a data placeholder for some piece of information coming from your system.  Examples of custom attributes might be a fashion retailer who has ‘brand’ as an attribute. This allows Talon.One to know that SKUs are assigned to that brand, so they can be included or excluded from promotions. You can see the full set-up instructions in the Segment integration docs.

There are three things you can sync with Talon.One from Segment:

1. Custom traits

2. Audiences (Customer Segments)

3. Computed traits

For our example, we’ll be using audiences — namely an audience of new users. Once your integration is complete, you can send audiences generated using Segment Personas to your Talon.One destination as a user property.

Step 2: Create the audience in Segment

Audiences are Segment’s way of allowing you to define cohorts of users or accounts based on their event behavior and traits. Audiences can be built from your core tracking events, traits, or computed traits. These audiences can then be synced to hundreds of destinations — including Talon.One.

For this scenario, we want to create an audience of users who have just made their account (for instance, in the past 7 days) and have yet to make a purchase. 

Step 3: Creating the promotion logic 

Talon.One can use any ‘if this, then that’ logic to build promotions. In our case, we want to check if the customer is a new user (defined by the audience we created in Segment) and therefore eligible for the promotion. We also need a rule to check if the value of their cart this session is over $10, and that the customer has entered the correct generic coupon for the campaign. 

In the effects part of the set-up, we will automatically generate an account-linked coupon. This coupon can be configured with specific characteristics. You might want to limit the maximum value of the coupon to $20 to prevent overspend, or allow the coupon to be redeemed in four transactions instead of three transactions. 

Finally, this rule passes a notification to the user through the customer experience platform. The text of the coupon can be defined in Talon.One and then passed to your CX platform. If you defined your variables in the message text, it will auto-populate with the relevant info. Talon.One has partnerships with Braze and Iterable, however the beauty of an API-first approach is that — with configuration — any CX platform should work. 

Step 4: Measure performance

Once the campaign is running, Talon.One automatically keeps track of performance in the Insights tab. 

If you’ve benchmarked your average order value (AOV) from regular users, you can easily compare with the basket value in your new campaign to quickly check the effectiveness of your promotion. In interviews, we’ve seen that similar campaigns can increase AOV by 25% and users are 7.2% more likely to become habitual users of your app. 

Wrapping up

What we’ve accomplished in this recipe:

• Set up Talon.One as a destination in Segment

• Created an audience for new users

• Created a promotion logic to reward new users with cash back if they make further purchases

• Tracked the success of this promotion