The more competitive your market, the more advantages you need to convert customers. This is especially true in a poor economy like ours, 
where you’re losing market share simply because customers are saving their money. One way to handle these issues is by offering discounts or coupons for your ecommerce site. Customers are enticed to stay in the market and shop with you specifically, thanks to your reduced prices. Plus, coupons and discounts give you a chance to influence when they make those purchases.
First, you have a couple of options for reducing your prices online. Obviously, one choice is to simply cut them, just as a traditional shop does during a sale. This is by far the easiest method. That being said, there are some disadvantages when compared to other methods.
eCoupons are another tactic you can use. As the name suggests, they’re just the digital version of the traditional kind. Typically, however, they’re given some kind of online presence. So, you might email eCoupons to some of your best customers with an image that resembles the paper kind. Obviously, they’ll just use a code you provide or their normal account information.
You can also use promo codes. These tend to come with less flash and are nothing more than a series of characters customers will be prompted to enter into the website typically when they’re checking out.
The advantage of these last two methods is that they’re better for analytics. If you just throw a sale, you can’t be sure how your customers heard about it, so there’s no way to replicate this marketing in the future. It may have been that your marketing streams worked. However, it could have been that one person with an army of Twitter followers mentioned the great prices. Maybe your success was completely random.
When you use eCoupons and promo codes, you have a much better idea. You know whom you sent the eCoupons to, for example. Promo codes can be advertised or sent straight to individuals; either way, you have a pretty good idea of what marketing methods worked.
As opposed to simply lowering prices, though, the last two methods will entail some eCommerce software to pull off. However, if it means more customers and a better appreciation for which marketing methods work best, it’s probably worth it.
If business is slow or you simply want to know for sure how customers are finding you, consider the above advice about discounts and coupons for fast results.
Sources:
http://docs.getshopped.org/documentation/managing-coupons/
http://www.magnetcommerce.com/ecommerce-software-guide/4-e-CommerceSolution-DiscountCoupons.shtml
http://ux.stackexchange.com/questions/11363/do-promo-codes-or-coupon-codes-do-more-harm-than-good