Alternative Sales Strategies for Digital Stores -- Coupons

For this series of posts, we're going to continue our conversation from last time about the types of sales that the Game Industry has access to. 

One of the great things about the digital market is that it’s opening up both developers and storefronts to new strategies to convince consumers to buy their titles and we're going to start this post with a concept that's been around forever: Coupons.

Coupons:

Thanks to the increase in digital items and ownership, coupons have become a popular sales strategy. Introduced on Steam last year, coupons allow you to reward users with a limited duration discount on a specific game/s.

There are two ways that a user can get a coupon on Steam: They can either be rewards for completing Steam trading card badges, or any developer can hand them out to fans for meeting a certain requirement. Getting coupons created for your game is done by contacting Valve and they will set you up with the coupons for you to distribute. Because this is handled from a developer to Valve communication, we don't have any direct insight into this process.

While coupons may sound simple, they can be attractive to a wide audience of consumers.

Advantages:

Because coupons have a limited duration and access, they avoid the problems of having too many sales in a specific period. When we talked about the timing window of sales, we discussed several sales periods that you could use to discount your game to get increased sales. But that meant you had to adhere to those periods in order to best discount your game.

Steam coupons have become both a marketing tool and commodity on the platform.

With coupons, you can set up a campaign at anytime to reward your customers. The other advantage of coupons is that since they can be traded, they are a part of the digital economy on Steam. This allows a win--win for fans and the developer-- The fans get a coupon that they can either use themselves or trade with someone else who wants the cheaper price and the developer gets the sale.

In this way, an item that cost the developer nothing to produce becomes quantifiable and can be a way to get additional sales. But despite the simplicity of the model, it does have a few problems.

Disadvantages:

If there are any problems with using coupons as a sales tactic, the main one would be that your more savvy customers won't be interested in them. The reason is that they know about the sales periods and most often a coupon won't offer a big enough discount to convince them to buy the game now as opposed to just waiting for the bigger sale. This means for a coupon to make a difference for the hardcore group, it needs to be 50 percent or more off the title.

And this is why despite the fact that you can ignore sales periods when using coupons, it's still not a good idea to send out coupons too close to when a major sale is coming up.

Green Man Gaming's use of coupons and timed promotions helped elevate them to a premier digital store among consumers.

The only exception would be coupons used for pre-orders which the store Green Man Gaming has used to full effect. They constantly promote 20-25 percent off coupons that can work not just for anything currently out, but for pre-orders as well. In many cases, you can buy an upcoming game from Green Man Gaming cheaper than other digital stores including Steam.

This was definitely a smart marketing move by Green Man Gaming and is what gave them the visibility to help propel them into becoming a major player in the digital store market.

Coupon Cost Cutting:

The beauty of coupons are that they don't require much work by either you or Valve and can be a quick way of getting additional sales. And thanks to Steam, it is an option that is not reserved for stores only, but any developer on the platform can make use of it.

For our next part, we're going to talk about an option that is more for developers as opposed to store fronts and that is the concept of the cross game promotion.

(Reprinted from the Xsolla.com Blog)