Coupon Customer Retention Marketing Strategy: How to Use Coupons to Reduce Customer Churn and Increase Customer Lifetime Value

1. The Power of Coupons in Customer Retention

Coupons are one of the most effective and popular marketing tools that can help businesses retain their customers and increase their loyalty. Coupons can offer various benefits to both customers and businesses, such as saving money, increasing satisfaction, creating urgency, encouraging repeat purchases, attracting new customers, and more. However, not all coupons are created equal, and some coupon strategies may be more successful than others in achieving customer retention goals. In this section, we will explore how to use coupons to reduce customer churn and increase customer lifetime value, from different perspectives such as psychology, economics, and technology. We will also provide some examples of successful coupon campaigns that have boosted customer retention rates and revenues for various businesses.

Some of the insights that we will cover in this section are:

1. The psychological effects of coupons on customer behavior and emotions. coupons can influence customer behavior and emotions in various ways, such as creating a sense of scarcity, urgency, reciprocity, gratitude, and happiness. These psychological effects can motivate customers to buy more, buy sooner, buy again, and buy from the same brand. For example, a study by Anderson and Simester (2008) found that customers who received a $5 coupon for a $25 purchase were more likely to return to the store within three months than those who did not receive a coupon. Another study by Raghubir and Srivastava (2008) found that customers who received a free gift coupon were more likely to feel grateful and loyal to the brand than those who received a discount coupon.

2. The economic benefits of coupons for customer retention and profitability. Coupons can offer economic benefits to both customers and businesses, such as increasing customer surplus, reducing price sensitivity, enhancing perceived value, and optimizing pricing strategies. These economic benefits can help businesses retain their customers and increase their profitability. For example, a study by Lewis (2006) found that customers who received targeted coupons based on their purchase history were more likely to increase their spending and frequency of purchases than those who received generic coupons. Another study by Sahni (2015) found that businesses that offered personalized coupons based on customer preferences and behavior were able to increase their revenues by 3.6% and their profits by 11.4%.

3. The technological advancements and innovations in coupon marketing. Technology has enabled businesses to create and deliver coupons in more efficient and effective ways, such as using digital platforms, mobile devices, social media, email, and artificial intelligence. These technological advancements and innovations can help businesses reach more customers, segment and target them more accurately, track and measure their coupon performance, and optimize their coupon design and delivery. For example, a study by Zhang et al. (2010) found that customers who received mobile coupons were more likely to redeem them than those who received paper coupons. Another study by Chen et al. (2012) found that customers who received coupons via social media were more likely to share them with their friends and family, creating a viral effect and increasing customer acquisition and retention.

2. Identifying the Problem

One of the biggest challenges for any business is to retain its customers and prevent them from switching to competitors. This phenomenon of losing customers over time is known as customer churn, and it can have a significant impact on the revenue and growth of a business. In this section, we will explore what customer churn is, why it happens, how to measure it, and what are the common factors that influence it. We will also look at some examples of how different businesses deal with customer churn and what strategies they use to reduce it.

To understand customer churn, we need to first define what a customer is and what a churn event is. A customer is anyone who has purchased a product or service from a business at least once. A churn event is when a customer stops purchasing or using the product or service for a certain period of time, usually defined by the business. For example, a churn event for a subscription-based service like Netflix or Spotify could be when a customer cancels their subscription or does not renew it after a trial period. A churn event for a retail store like Walmart or Target could be when a customer does not make a purchase for a year or more.

There are different ways to measure customer churn, depending on the type and frequency of the transactions. One of the most common metrics is the churn rate, which is the percentage of customers who churned in a given time period. For example, if a business had 1000 customers at the beginning of the month and 900 customers at the end of the month, the churn rate for that month would be 10%. Another common metric is the customer retention rate, which is the opposite of the churn rate. It is the percentage of customers who stayed with the business in a given time period. For example, if a business had 1000 customers at the beginning of the month and 900 customers at the end of the month, the customer retention rate for that month would be 90%.

Customer churn can have various causes and effects, depending on the nature and context of the business. Some of the common factors that influence customer churn are:

1. Customer satisfaction: This is the degree to which a customer is happy with the product or service they received from the business. Customer satisfaction can be influenced by many factors, such as the quality, price, value, convenience, reliability, and support of the product or service. Customer satisfaction can also be affected by the expectations and perceptions of the customer, which may differ from the reality of the product or service. Customer satisfaction is one of the most important drivers of customer loyalty and retention. If a customer is satisfied with their purchase, they are more likely to repeat it and recommend it to others. If a customer is dissatisfied with their purchase, they are more likely to switch to a competitor or stop buying altogether.

2. Customer loyalty: This is the degree to which a customer is committed to the business and prefers it over other alternatives. Customer loyalty can be influenced by many factors, such as the emotional attachment, trust, and relationship that the customer has with the business. Customer loyalty can also be affected by the incentives and rewards that the business offers to the customer, such as discounts, coupons, loyalty programs, referrals, and reviews. Customer loyalty is one of the most important outcomes of customer retention. If a customer is loyal to a business, they are more likely to buy more frequently, spend more, and provide positive feedback. If a customer is not loyal to a business, they are more likely to be influenced by external factors, such as competitors, promotions, or word-of-mouth.

3. Customer lifetime value: This is the total amount of revenue that a customer generates for the business over their entire relationship with the business. Customer lifetime value can be influenced by many factors, such as the acquisition cost, retention cost, and profit margin of the customer. Customer lifetime value can also be affected by the duration, frequency, and recency of the customer's purchases, as well as the cross-selling and up-selling opportunities that the business can offer to the customer. Customer lifetime value is one of the most important indicators of the profitability and growth potential of a business. If a customer has a high lifetime value, they are more valuable to the business and contribute more to its bottom line. If a customer has a low lifetime value, they are less valuable to the business and may even cost more than they generate.

Some examples of how different businesses deal with customer churn and what strategies they use to reduce it are:

- Netflix: Netflix is a streaming service that offers a wide range of movies, shows, documentaries, and original content for a monthly fee. Netflix faces customer churn from customers who cancel their subscription or switch to other streaming platforms, such as Amazon Prime Video, Hulu, or Disney+. To reduce customer churn, Netflix uses various strategies, such as:

- personalizing the content and recommendations for each customer based on their viewing history, preferences, and ratings.

- Creating and promoting original and exclusive content that attracts and retains customers, such as Stranger Things, The Crown, or The Witcher.

- Offering different plans and pricing options that suit different customer needs and budgets, such as basic, standard, and premium plans.

- Providing a free trial period and a flexible cancellation policy that allows customers to try the service before committing to it and to cancel it anytime without any penalty.

- Engaging and communicating with customers through email, social media, and notifications, to inform them about new releases, updates, and offers.

- Starbucks: Starbucks is a coffee chain that offers a variety of beverages, food, and merchandise for a premium price. Starbucks faces customer churn from customers who stop visiting their stores or switch to other coffee shops, such as Dunkin' Donuts, McDonald's, or Tim Hortons. To reduce customer churn, Starbucks uses various strategies, such as:

- Providing a consistent and high-quality customer experience across all their stores, products, and services, such as the taste, temperature, and presentation of their drinks, the cleanliness and ambiance of their stores, and the friendliness and professionalism of their staff.

- Developing and expanding their product portfolio and menu to cater to different customer tastes, preferences, and occasions, such as seasonal drinks, vegan options, and breakfast items.

- Implementing and enhancing their loyalty program, Starbucks Rewards, that rewards customers for their purchases and visits, and offers them benefits, such as free drinks, discounts, and personalized offers.

- leveraging their mobile app and website to enable customers to order, pay, and collect their drinks online, and to access their loyalty account, rewards, and offers.

- building and maintaining a strong brand image and reputation that resonates with customers and reflects their values, such as social responsibility, environmental sustainability, and community involvement.

3. Types and Benefits

One of the most effective ways to use coupons as a customer retention marketing strategy is to leverage them as incentives. incentives are rewards that motivate customers to take a desired action, such as making a purchase, signing up for a newsletter, referring a friend, or leaving a review. Coupons can be used as incentives in various ways, depending on the type and the benefit of the coupon. In this section, we will explore the different types and benefits of coupons as incentives, and how they can help you reduce customer churn and increase customer lifetime value.

Some of the common types of coupons as incentives are:

1. Discount coupons: These are coupons that offer a percentage or a fixed amount off the regular price of a product or service. Discount coupons can be used as incentives to encourage customers to buy more, buy sooner, or buy again. For example, you can offer a 10% off coupon to customers who spend more than $50, a $5 off coupon to customers who complete a survey, or a 20% off coupon to customers who haven't made a purchase in the last six months.

2. free shipping coupons: These are coupons that waive the shipping fee for a certain order or a certain period of time. Free shipping coupons can be used as incentives to reduce cart abandonment, increase order value, or reward loyal customers. For example, you can offer a free shipping coupon to customers who add more than $100 to their cart, a free shipping coupon to customers who subscribe to your email list, or a free shipping coupon to customers who have made more than 10 purchases in the last year.

3. free gift coupons: These are coupons that entitle the customer to receive a free product or service with their purchase. Free gift coupons can be used as incentives to create a sense of urgency, add value, or surprise and delight customers. For example, you can offer a free gift coupon to the first 100 customers who buy a new product, a free gift coupon to customers who buy a bundle or a set, or a free gift coupon to customers who celebrate their birthday or anniversary with you.

4. BOGO coupons: These are coupons that offer a buy one, get one free or buy one, get one half off deal. BOGO coupons can be used as incentives to increase sales volume, clear inventory, or cross-sell and upsell products. For example, you can offer a BOGO coupon to customers who buy a certain product, a BOGO coupon to customers who buy from a certain category, or a BOGO coupon to customers who buy a complementary product.

The benefits of using coupons as incentives are manifold. Some of the benefits are:

- They increase customer satisfaction and loyalty: Customers appreciate getting a good deal, saving money, or receiving a freebie. Coupons as incentives can make customers feel valued, rewarded, and special. This can increase their satisfaction and loyalty, and make them more likely to repeat purchases, recommend your brand, and leave positive feedback.

- They increase customer retention and lifetime value: Customers who receive coupons as incentives are more likely to stay with your brand, rather than switch to a competitor. Coupons as incentives can also increase the frequency and the amount of purchases, as well as the duration of the customer relationship. This can increase your customer retention rate and customer lifetime value, which are key metrics for your business growth and profitability.

- They increase customer acquisition and referrals: Customers who receive coupons as incentives are more likely to share them with their friends, family, and social networks. Coupons as incentives can also attract new customers who are looking for a good deal, a free trial, or a sample. This can increase your customer acquisition rate and referrals, which are important sources of new leads and customers.

As you can see, coupons as incentives are a powerful customer retention marketing strategy that can help you reduce customer churn and increase customer lifetime value. By choosing the right type and benefit of coupon for your target audience, you can motivate them to take the actions that you want, and create a loyal and profitable customer base.

4. Strategies and Best Practices

coupons are a powerful tool for customer retention marketing, as they can incentivize repeat purchases, increase customer loyalty, and reduce customer churn. However, not all coupon campaigns are created equal. To craft effective coupon campaigns, you need to consider your goals, your audience, your budget, and your timing. In this section, we will explore some strategies and best practices for designing and implementing coupon campaigns that can boost your customer retention and lifetime value. Here are some tips to follow:

1. Define your objectives and metrics. Before you launch a coupon campaign, you need to have a clear idea of what you want to achieve and how you will measure it. For example, do you want to increase your average order value, your conversion rate, your repeat purchase rate, or your customer satisfaction? How will you track the performance of your coupon campaign and compare it with your baseline or control group? Having specific and measurable goals and metrics will help you evaluate the effectiveness and roi of your coupon campaign.

2. segment your customers and personalize your offers. Not all customers are the same, and neither are their preferences and behaviors. To increase the relevance and appeal of your coupon campaign, you need to segment your customers based on criteria such as their purchase history, their demographics, their location, their loyalty status, or their engagement level. Then, you can tailor your coupon offers to each segment, based on their needs, interests, and motivations. For example, you can offer a higher discount to your loyal customers, a free shipping coupon to your first-time buyers, or a referral coupon to your advocates. Personalizing your coupon offers can increase your click-through rate, your redemption rate, and your customer satisfaction.

3. test and optimize your coupon design and delivery. The way you design and deliver your coupon can have a significant impact on its performance. You need to test different elements of your coupon, such as the headline, the copy, the image, the color, the size, the shape, the code, the expiration date, and the call to action. You also need to test different channels and platforms for delivering your coupon, such as email, SMS, push notifications, social media, or your website. You can use tools such as A/B testing, multivariate testing, or heat maps to compare the results of different variations and find the optimal combination for your coupon campaign.

4. Align your coupon campaign with your customer journey and lifecycle. Another important factor to consider for your coupon campaign is the timing. You need to align your coupon campaign with your customer journey and lifecycle, and offer the right coupon at the right time to the right customer. For example, you can offer a welcome coupon to your new subscribers, a birthday coupon to your existing customers, a reactivation coupon to your inactive customers, or a loyalty coupon to your frequent customers. You can also use triggers and events, such as holidays, seasons, product launches, or customer feedback, to send timely and relevant coupons to your customers. Aligning your coupon campaign with your customer journey and lifecycle can increase your customer retention and loyalty.

5. Targeting the Right Customers

Personalization and segmentation play a crucial role in targeting the right customers and maximizing the effectiveness of coupon customer retention marketing strategies. By tailoring marketing efforts to individual customers, businesses can enhance customer satisfaction, reduce churn, and increase customer lifetime value.

1. understanding Customer preferences: To effectively personalize marketing campaigns, businesses need to gain a deep understanding of their customers' preferences. This can be achieved through data analysis, customer surveys, and feedback. By identifying customer preferences, businesses can create targeted offers and coupons that align with their customers' needs and interests.

2. Segmentation Strategies: Segmenting customers based on various criteria allows businesses to tailor their marketing efforts to specific groups. Common segmentation criteria include demographics, psychographics, purchase behavior, and customer lifecycle stage. By segmenting customers, businesses can create personalized coupons and offers that resonate with each group, increasing the likelihood of conversion and customer retention.

3. personalized recommendations: Leveraging customer data and advanced algorithms, businesses can provide personalized product recommendations to customers. By analyzing past purchase behavior, browsing history, and preferences, businesses can suggest relevant products or services to customers, increasing the chances of conversion and repeat purchases.

4. Dynamic Pricing: Personalization extends to pricing strategies as well. Dynamic pricing involves adjusting prices based on individual customer characteristics, such as purchase history, loyalty, and responsiveness to discounts. By offering personalized pricing, businesses can incentivize customers to make purchases and increase customer loyalty.

5. Loyalty Programs: implementing loyalty programs can further enhance personalization and segmentation efforts. By rewarding customers for their loyalty, businesses can encourage repeat purchases and foster long-term relationships. Personalized loyalty rewards, such as exclusive discounts or personalized offers, can make customers feel valued and increase their engagement with the brand.

6. Behavioral Triggers: By leveraging customer behavior data, businesses can identify specific triggers that prompt customers to make a purchase. These triggers can include abandoned cart reminders, personalized offers based on browsing history, or time-limited discounts. By strategically using behavioral triggers, businesses can nudge customers towards conversion and increase customer retention.

7. social Proof and User-generated content: Incorporating social proof and user-generated content into marketing campaigns can enhance personalization efforts. By showcasing positive reviews, testimonials, and user-generated content, businesses can build trust and credibility with customers. This personalized approach can influence purchasing decisions and increase customer loyalty.

In summary, personalization and segmentation are essential components of an effective coupon customer retention marketing strategy. By understanding customer preferences, segmenting customers, providing personalized recommendations, implementing dynamic pricing, offering loyalty programs, leveraging behavioral triggers, and incorporating social proof, businesses can target the right customers and maximize customer lifetime value.

6. Metrics for Success

One of the most important aspects of any coupon marketing strategy is to track and analyze the performance of your coupons. You need to measure how effective your coupons are in achieving your goals, such as increasing customer retention, reducing churn, and enhancing customer lifetime value. You also need to identify the best practices and optimize your coupon campaigns accordingly. In this section, we will discuss some of the key metrics that you should monitor and analyze to evaluate your coupon performance. We will also provide some tips and examples on how to use these metrics to improve your coupon marketing strategy.

Some of the metrics that you should track and analyze for your coupon performance are:

1. Redemption rate: This is the percentage of customers who use your coupons out of the total number of customers who receive them. This metric indicates how attractive and relevant your coupons are to your target audience. A high redemption rate means that your coupons are well-designed, well-timed, and well-promoted. A low redemption rate means that your coupons are not appealing enough, not personalized enough, or not visible enough to your customers. You can improve your redemption rate by segmenting your customers based on their preferences, behavior, and purchase history, and offering them coupons that match their needs and interests. You can also use different channels and methods to distribute and promote your coupons, such as email, SMS, social media, push notifications, etc. For example, if you run an online clothing store, you can send personalized coupons to your customers based on their browsing and purchase history, such as 20% off on their favorite brand, or free shipping on their next order.

2. Revenue per coupon: This is the average amount of revenue that you generate from each coupon that is redeemed. This metric indicates how profitable your coupons are for your business. A high revenue per coupon means that your coupons are driving more sales and increasing your average order value. A low revenue per coupon means that your coupons are not generating enough revenue, or that they are cannibalizing your regular sales. You can improve your revenue per coupon by setting minimum purchase requirements, expiration dates, and other conditions for your coupons, to encourage your customers to spend more and act faster. You can also upsell and cross-sell your products and services by offering complementary or higher-value coupons to your customers. For example, if you run a travel agency, you can offer a coupon for 10% off on a hotel booking, and then upsell a coupon for 15% off on a car rental, or cross-sell a coupon for a free city tour.

3. Retention rate: This is the percentage of customers who make a repeat purchase after using your coupons, within a given time period. This metric indicates how loyal your customers are to your brand, and how effective your coupons are in reducing customer churn and increasing customer lifetime value. A high retention rate means that your coupons are creating a positive customer experience, and that your customers are satisfied with your products and services. A low retention rate means that your coupons are not creating enough value, or that your customers are switching to your competitors. You can improve your retention rate by offering coupons that reward your loyal customers, such as loyalty points, free gifts, or exclusive discounts. You can also offer coupons that incentivize your customers to refer their friends and family to your business, such as referral bonuses, or coupons that can be shared or gifted. For example, if you run a beauty salon, you can offer a coupon for a free haircut to your customers who have visited your salon at least five times, and then offer them another coupon for 50% off on their next haircut if they refer a friend to your salon.

7. Nurturing Loyalty with Coupons

building long-term relationships is a crucial aspect of customer retention and loyalty. By utilizing coupons, businesses can effectively nurture loyalty and reduce customer churn, ultimately increasing customer lifetime value. In this section, we will explore various insights and strategies from different perspectives to highlight the importance of coupon-based customer retention marketing.

1. Understanding Customer Needs: Coupons can be tailored to meet specific customer needs and preferences. By analyzing customer data and purchase history, businesses can identify patterns and preferences, allowing them to create personalized coupon offers. For example, a clothing retailer can offer exclusive discounts on items that align with a customer's previous purchases or browsing history.

2. Rewarding Loyalty: Coupons can serve as a reward for loyal customers. Implementing a tiered loyalty program where customers earn points or rewards based on their purchase frequency or total spend encourages repeat business. For instance, a coffee shop can offer a free drink or a discounted price for every tenth purchase made by a loyal customer.

3. Exclusive Offers: Providing exclusive coupon offers to loyal customers makes them feel valued and appreciated. These exclusive offers can be communicated through email newsletters, mobile apps, or personalized messages. For instance, a beauty brand can offer early access to new product launches or limited-time discounts to their loyal customers.

4. Referral Programs: Coupons can be used to incentivize customers to refer their friends and family. By offering discounts or rewards for successful referrals, businesses can expand their customer base while rewarding existing customers. For example, an online marketplace can provide a referral code that offers a discount to both the referrer and the referred customer.

5. upselling and Cross-selling: Coupons can be strategically used to encourage customers to explore additional products or services. By offering discounts on complementary items or upgrades, businesses can increase the average order value and enhance the customer experience. For instance, a hotel can offer a discounted spa treatment or a room upgrade to customers who book a longer stay.

6. seasonal and Event-based Offers: Coupons can be aligned with seasonal or event-based promotions to create a sense of urgency and excitement. Businesses can offer limited-time discounts or bundle deals during holidays, festivals, or special occasions. For example, a restaurant can offer a Valentine's Day special coupon for a romantic dinner package.

Remember, these are just a few insights and strategies to consider when using coupons to build long-term relationships and nurture loyalty. Each business should analyze its target audience, industry, and goals to create a customized coupon customer retention marketing strategy that aligns with its brand values and objectives.

8. Maximizing Customer Lifetime Value

upselling and cross-selling opportunities play a crucial role in maximizing customer lifetime value. By effectively implementing these strategies, businesses can not only reduce customer churn but also increase revenue by encouraging customers to make additional purchases.

From the customer's perspective, upselling provides them with the opportunity to upgrade their purchase to a higher-priced product or service that offers enhanced features or benefits. This can be done by highlighting the added value and advantages of the higher-priced option, showcasing how it aligns with the customer's needs and preferences. For example, a customer purchasing a basic smartphone may be upsold to a premium model with better camera quality and advanced features.

Cross-selling, on the other hand, involves offering complementary products or services that are related to the customer's initial purchase. This strategy aims to enhance the customer's overall experience and provide them with a more comprehensive solution. For instance, a customer buying a laptop may be cross-sold accessories such as a laptop bag, wireless mouse, or antivirus software.

To further illustrate the concept, here are some in-depth insights on upselling and cross-selling opportunities:

1. Personalized Recommendations: By leveraging customer data and preferences, businesses can provide personalized recommendations for upselling and cross-selling. For example, an online retailer can suggest additional products based on the customer's browsing history, purchase behavior, and similar customer profiles.

2. Bundling Offers: Creating bundled offers that combine multiple products or services at a discounted price can be an effective way to encourage cross-selling. This approach not only increases the perceived value for the customer but also incentivizes them to make multiple purchases.

3. Loyalty Programs: Implementing loyalty programs can incentivize customers to make repeat purchases and explore upselling and cross-selling opportunities. By offering exclusive discounts, rewards, or early access to new products, businesses can foster customer loyalty and encourage them to engage with additional offerings.

4. targeted Email campaigns: Sending targeted email campaigns to existing customers can be an effective way to promote upselling and cross-selling opportunities. By tailoring the content and offers based on the customer's previous purchases or browsing behavior, businesses can increase the chances of conversion.

5. Customer Education: Providing educational content or tutorials that highlight the benefits and value of upselling and cross-selling options can help customers make informed decisions. This can be in the form of blog posts, videos, or product guides that showcase the additional features and advantages of the recommended products or services.

Remember, these are just a few examples of how businesses can leverage upselling and cross-selling opportunities to maximize customer lifetime value. By implementing these strategies effectively, businesses can not only increase revenue but also enhance the overall customer experience.

9. Successful Coupon Customer Retention Campaigns

One of the most effective ways to demonstrate the value of coupons for customer retention is to look at some real-world examples of successful coupon campaigns. In this section, we will explore how different businesses have used coupons to reduce customer churn, increase customer loyalty, and boost customer lifetime value. We will analyze the strategies, tactics, and results of these campaigns, and draw some key lessons for your own coupon marketing efforts. Here are some of the case studies we will cover:

1. How a subscription box service used coupons to reduce churn by 18%. subscription box services are a popular business model that offer customers a curated selection of products delivered to their door every month. However, they also face a high churn rate, as customers may lose interest, find better alternatives, or feel overwhelmed by the number of boxes they receive. One way to combat this problem is to use coupons to incentivize customers to stay subscribed and increase their satisfaction. A case in point is FabFitFun, a subscription box service that offers beauty, wellness, fitness, and fashion products. FabFitFun used coupons to offer its customers a choice of free products or discounts on add-ons for their next box. This way, customers could customize their boxes and get more value for their money. The result was a 18% reduction in churn rate and a 12% increase in average order value.

2. How a clothing retailer used coupons to increase loyalty and referrals. Clothing retailers face a competitive and dynamic market, where customers have many options and preferences change frequently. To retain customers and encourage repeat purchases, it is important to build a strong relationship with them and reward them for their loyalty. A case in point is Bonobos, a clothing retailer that specializes in men's pants. Bonobos used coupons to create a loyalty program that offered customers discounts, free shipping, and early access to new products based on their spending levels. The program also included a referral system that gave customers and their friends $25 off their first purchase. The result was a 20% increase in customer retention and a 65% increase in referral revenue.

3. How a food delivery service used coupons to increase customer lifetime value. food delivery services are a convenient and popular option for busy customers who want to enjoy a variety of cuisines at home. However, they also face a low customer lifetime value, as customers may switch to competitors, order less frequently, or cook their own meals. One way to increase customer lifetime value is to use coupons to stimulate more orders and increase customer satisfaction. A case in point is DoorDash, a food delivery service that operates in the US and Canada. DoorDash used coupons to offer its customers free delivery, discounts, and cashback on their orders. The coupons were personalized based on the customer's location, preferences, and order history. The result was a 10% increase in customer lifetime value and a 15% increase in customer retention.