Analyze the performance of your marketing campaign by calculating coupon or voucher redemption metrics.
Understanding Redemption Rate
Redemption rate is a critical Key Performance Indicator (KPI) in marketing that measures the effectiveness of a promotional campaign. It represents the percentage of distributed offers—such as coupons, vouchers, or discount codes—that are actually used by customers.
The Formula
The calculation for redemption rate is straightforward:
Redemption Rate = (Number of Items Redeemed / Number of Items Issued) × 100
Why This Metric Matters
ROI Tracking: It helps determine if the cost of printing and distribution was worth the sales generated.
Customer Engagement: A high rate suggests your offer was relevant and enticing to your target audience.
Inventory Planning: Understanding how many people will claim an offer allows businesses to manage stock levels effectively.
Channel Comparison: By comparing rates across email, SMS, and direct mail, you can identify which channel yields the best response.
Typical Benchmarks
While "good" rates vary by industry, common benchmarks include:
Direct Mail: 0.5% to 2%
Email Coupons: 2% to 10%
Grocery Store Coupons: 1% to 3%
SMS Marketing: 10% to 30%
Example Calculation
Suppose you distribute 5,000 digital vouchers via an email newsletter. Over the next month, 250 customers use that voucher at checkout. Your calculation would be:
(250 / 5,000) × 100 = 5% Redemption Rate
If the campaign cost $500, your Cost per Redemption would be $2.00 ($500 / 250).
function calculateRedemptionRate() {
var issued = parseFloat(document.getElementById('rr_issued').value);
var redeemed = parseFloat(document.getElementById('rr_redeemed').value);
var cost = parseFloat(document.getElementById('rr_cost').value);
var value = parseFloat(document.getElementById('rr_value').value);
var resultDisplay = document.getElementById('rr_result_display');
// Reset and validate
resultDisplay.innerHTML = "";
resultDisplay.style.display = "none";
if (isNaN(issued) || isNaN(redeemed) || issued issued) {
resultDisplay.innerHTML = "Error: Redeemed items cannot exceed issued items.";
resultDisplay.style.display = "block";
return;
}
var rate = (redeemed / issued) * 100;
var unredeemed = issued – redeemed;
var breakageRate = (unredeemed / issued) * 100;
var html = "