AVERY'S WEBSITE FOR PRODUCT MANAGEMENT
Design a Seller Coupon Feature
* This is part of my interview process for a Product Manager role at Palmstreet. I completed a take-home assignment to design a new feature.
Within a tight timeline, I conducted competitor research, defined the user experience flow, and proposed key metrics and implementation plans.
1.Problem Framing & Goals
1.1 Why Seller Coupons?
Enabling live sellers to create coupon-based promotions directly supports Palmstreet’s core strategy: driving GMV through real-time, interactive shopping experiences.
Coupons are a lightweight yet powerful tool that enhances buyer conversion and seller success during live sessions.
1.1.1Palmstreet’s Strategy
1.1.2 For Sellers
• Launch time-sensitive discounts that create urgency
• Reward loyal viewers or followers with exclusive deals
• Compete on pricing during peak traffic moments (e.g. flash sales, festivals)
1.1.3 For Buyers
• Incentivize immediate action with exclusive, limited-time offers
• Build excitement and FOMO through visual cues like countdowns or coupon drops
• Lower the barrier to purchase, especially for new users or high-AOV items
1.2 Main Goal
Increase Gross Merchandise Value (GMV) by enabling sellers to run targeted, limited-time coupon promotions that:
• Boost live stream Conversion Rates: offer instant, in-stream discounts
• Raise AOV: spend-and-save” coupon
• Increase Sales Frequency: Encourage repeat purchases via time-limited/ repeatable coupons
• Drive urgency and FOMO (Fear of Missing Out).
2. Feature Overview
2.1 Coupon Feature High-fidelity Prototype: Sellers
2.2 Coupon Feature High-fidelity Prototype: Buyers
3. Key Use Cases & User Flows
3.1 Use Cases
3.2 User Flow
Seller GMV Increase (North Star Metic)
• Why important:
This is the primary business objective behind the Seller Coupon feature. If sellers see a measurable increase in GMV during sessions where coupons are used, it validates the feature’s direct contribution to Palmstreet’s growth goals.
• How to measure it:
-Compare average GMV per live session for sellers with and without coupons (A/B testing or historical benchmarks).
-Segment by:
o Coupon type (e.g., % off vs. flat)
o Time of drop (early, mid, or late in live)
o Seller tier
4. Success Metrics
Coupon Redemption Rate
• Why important
Redemption rate reflects the effectiveness of the offer — it shows whether viewers are not only claiming coupons but also converting to buyers. A high redemption rate signals strong engagement and good offer timing.
• How to measure it:
Formula:
Redemption Rate = (# of coupons redeemed) / (# of coupons claimed)
-Tracked per live session and aggregated across campaigns.
-Filter by user type (new vs. returning) and product category.
Conversion Rate
(Claim to Checkout)
• Why important:
This measures how well the coupon moves users through the funnel — from interest (claiming) to actual purchase. It isolates the coupon’s influence on decision-making.
• How to measure it:
1. Use clickstream data to track:
-Coupon claim → product added to cart → checkout completed
2. Monitor drop-off points and optimize friction in the cart or payment step.
Repeat Purchase Rate (Post-Coupon)
• Why important:
Coupons shouldn’t only drive one-time sales — ideally, they create habits. Tracking repeat buyers helps understand long-term customer value driven by promotions.
How to measure it:
• Cohort analysis:
o Identify buyers who used a coupon
o Measure how many made another purchase within 30 days
• Compare against a baseline group of buyers who didn’t use coupons.
Coupon Redemption Rate
• Why important
Redemption rate reflects the effectiveness of the offer — it shows whether viewers are not only claiming coupons but also converting to buyers. A high redemption rate signals strong engagement and good offer timing.
• How to measure it:
Formula:
Redemption Rate = (# of coupons redeemed) / (# of coupons claimed)
-Tracked per live session and aggregated across campaigns.
-Filter by user type (new vs. returning) and product category.
Conversion Rate
(Claim to Checkout)
• Why important:
This measures how well the coupon moves users through the funnel — from interest (claiming) to actual purchase. It isolates the coupon’s influence on decision-making.
• How to measure it:
1. Use clickstream data to track:
-Coupon claim → product added to cart → checkout completed
2. Monitor drop-off points and optimize friction in the cart or payment step.
Repeat Purchase Rate (Post-Coupon)
• Why important:
Coupons shouldn’t only drive one-time sales — ideally, they create habits. Tracking repeat buyers helps understand long-term customer value driven by promotions.
How to measure it:
• Cohort analysis:
o Identify buyers who used a coupon
o Measure how many made another purchase within 30 days
• Compare against a baseline group of buyers who didn’t use coupons.
5. Risks & Mitigations
Cannibalizing Full-Price Sales
• Risk: Buyers may avoid full-price purchases in anticipation of upcoming coupons.
• Mitigations:
o Set limits on coupon usage frequency.
o Use minimum spend thresholds (e.g., “Spend $500, Get $50 Off”).
o Target coupons to specific groups (e.g., followers, new users).
• Risk: Sellers may find the setup process confusing or time-consuming.
• Mitigations:
o Provide ready-to-use coupon templates.
o Use a guided setup flow with tooltips and best practice prompts.
o Offer onboarding materials and support for new sellers.
Complexity for Sellers
• Risk: Users could exploit the system with fake accounts or multiple redemptions.
• Mitigations:
o Limit coupons to one per user.
o Require account verification for high-value coupons.
o Monitor suspicious behavior and enable abuse reporting tools.
Coupon Misuse or Abuse
• Risk: Frequent coupon usage may devalue seller products and platform credibility.
• Mitigations:
o Enforce cooldown periods between coupon campaigns.
o Educate sellers on effective discount strategies.
o Encourage a balance of value-added and non-discount promotions.
Over-Reliance on Discounts
6. Next Steps
MVP Scope
Basic coupon creation
-
Coupon types: % off and $off
-
Basic eligibility settings: All users, Followers only
-
Product scope selection: All products or selected SKUs
Live stream integration
-
Manual coupons drop during live sessions
-
Redemption limits: Total redemptions + per-user limit
Metrics dashboard for sellers
-
Seller dashboard: Claims, redemptions, and GMV uplift
Future Enhancements (Post-MVP)
Diverse coupon
• Tiered coupons (e.g., 10% for all, 20% for followers)
• Bundled Coupons**: "Buy X, Get Y Discount" promotions
• AI-Powered Coupons**: Auto-suggest optimal discounts based on demand
Interactive coupon claim
• Gamified claim mechanics (e.g., spin wheel)
Advanced seller dashboard
• A/B Testing Tools for Sellers- Let sellers test multiple coupon strategies and view performance comparisons within their dashboard.
Promotion Scope
• Cross-seller promotions (e.g., festival-wide deals)