Promotional codes are a major marketing tactic online, but it’s a tactic that is more valuable than most people realize. Merchants with active discount codes have a major advantage: they’re 8 times more likely to make sales.
And in the last year, 17% of all sales used a discount code.
It’s a tactic that every business needs to use in their marketing, and there are strategic times when using a promo code can really drive revenue and sales.
How are businesses using codes?
1. Attract First-Time Customers
If you have a product or service, you will have potential customers that will shop around. Customers get into the habit of choosing the same providers or products that they have used in the past.
There’s a level of comfort that comes along with familiarity.
So, companies are offering promo codes to first-time shoppers and users. Cable companies are notorious for this practice, and they’ll lock the customer into a contract and raise their price afterward.
Uber, known for holding a large portion of the rideshare market share, seemed like a company that was impossible to compete against. So, Lyft, a competing company offered Lyft promo codes that provided up to $20 off on the rider’s first ride.
It has helped the company increase its market share, and it’s a concept that can work for any business.
2. Entice Shoppers That Abandon Shopping Carts
Abandoned shopping cart marketing is becoming huge, and it’s because retailers know that the shopper is on the cusp of ordering. The person already went through all of the hard work of adding the items to their cart.
And the only thing that is left is to take the plunge.
Studies show that two-thirds of consumers abandon their carts, and being able to sway even a small percentage of these customers can be massive.
Businesses are sending out reminders for abandoned carts, offering cart or item discounts. They’re also offering promos for free shipping. It’s better to offer a discount or something free than to lose a potential customer.
3. Promos Can Help With Tracking Referrals
Referral networks are powerful marketing tools, and promo codes can be used for tracking referrals. I won’t go into the logistics behind a massive referral network, but let’s say that a company rented a booth at a recent industry event.
The company could supply all attendees with a promo code specifically for the event.
And then the company could use these codes to gather data, such as:
- What percentage of codes were used?
- Was the event a viable option?
- How much was spent by event attendees?
- What products are most popular for attendees?
All of this information is a great source of data for future events, even if they’re not the same event.
4. Promo Codes to Reward Loyal Followers and Fans
Social media has become such an integral part of people’s lives that it consumes nearly two hours of a person’s day. Over the course of a lifespan, given that this rate remains the same, a person will have to spend something like five years on social media.
That’s a staggering amount of time.
But this is time that companies are using to their advantage to make sales. Loyal followers and fans should be acknowledged, and this can be done through the use of promo codes. Facebook is a great place to offer promo codes, and promos can be done through a few different avenues:
- Offer a time-limited promo code to all followers and fans.
- Use apps to determine your top followers and fans, and offer these exclusive individuals discounts.
- Put a limit on the number of times a promo code can be used in
Rewarding your fans and followers keeps them engaged and will also help promote your brand further. Everyone loves promo codes or something for free, and you may as well offer discounts to those followers that are most loyal to your brand.
5. Promo Codes on Page Exit
If a potential lead is ready to leave a page, a promo code may be the last way to entice the customer to make a purchase. It makes sense for a company to try and “close the sale.” For example, let’s say that a potential customer added four items to their cart. But when the customer saw the total, they decided to abandon the cart and go to a competitor.
You’ve spent time marketing to this lead, and you’ve likely nurtured this lead to the near point of making a sale. The truth is that you’re already invested in this lead, so offering up a 10% discount may convert the lead before they leave the page for good.
Promo codes should not be viewed as a “waste of money” if they bring in customers. There’s always a cost of acquisition for each customer, and it’s possible that a promo code can lower these overall costs. Promotions are able to close sales and give businesses a chance to impress a potential customer that may have otherwise chosen a competitor.