Are Promotion Codes Really a Good Way to Get Repeat Business?

Image by: torbakhopper HE DEAD
By Alexa Hughes

Promotion codes are suggested by many to get customers coming back in an e commerce and internet environment. But do they really work? The problem with promotion codes (also called coupon codes, vouchers, discount codes, or offer codes) is that they can eat up a lot of profit. They can reduce the margin, train customers to expect discounts, and even encourage some customers to check out other sites for coupons for your site.

Other times customers without promo codes might abandon their carts on websites to go in search of promo codes when they don’t have one to use. Promo codes can though, be a really great way to draw in customers. Here are some techniques to know and things to keep in mind when using them.

#1) Use Private Promo Codes

When you use a private promo code it’s shared directly with the individuals of your choice, as opposed to social networks, affiliates, or shared to public coupon sites. This generally means that you send them out to a targeted mailing list, either of repeat customers, people who have visited your site, or people who have been shopping for similar products in the market.

These codes are efficient because they can’t be shared with other people and they won’t end up on coupon sites, so it will only cost you money if the targeted customer uses it.

#2) Use a Promo Box on Your Site to Build Your Mailing List 

A great way to build your mailing list is to put a link to click underneath the promo box that says something like “How can I get these?” or “How can I get promo codes too?” Another option is to say “sign up for our mailing list and these are types of rewards you can get instantly..” etc. This should encourage people to click on that and sign up for your mailing list in an effort to get the promo codes.  Easy!

#3) Use Fixed Discount Codes

If you create your coupons with percentage discounts you might end up losing a lot more money than if you use fixed price discount codes. (If your prices don’t vary too much this won’t be applicable, but for most businesses they do.) You can also set a minimum spending amount that is mandatory for the coupon to be applicable, to make sure that it’s worth your while as the business owner.

Adding an expiration date can also encourage customers to use promo codes because it adds a perceived time limit, even if there are more promo codes coming around the corner.

#4) Use Free Shipping Promo Codes

A lot of online shopping carts are abandoned because of shipping costs that seem to come out of nowhere at the end of the purchase. If you can offer a special free shipping promo code you might be able to encourage a fair amount of follow through on purchases. Plus, this fits into the fixed price versus percentage concept since shipping fees are generally within the same ballpark amount unless your products are quite large.

If that’s the case and your shipping costs are huge, try offering a “$5 off shipping” promo which should work just as effectively.

#5) Send “Thank You” Coupon Emails

To encourage customers to come back, try sending them a “thank you” coupon email after their purchase. This is a thoughtful gesture that will make them feel appreciated and if they liked their purchase they will be inclined to use their coupon soon, especially if it has an expiration date. If you send your products out in packages through the mail you can also include the promo code on a sheet of paper within the package, which can be a cute touch. The human element of thanking someone can be pretty effective for repeat customer action.

#6) Make Special Promo Codes for Your Social Media Followers

Rewarding your social media followers with their own special promo codes is not only a good way to get customers to buy stuff but also a good way to get more social media followers. Having followers on your social media is like free promotion for your company, since your regular updates will keep the people seeing you and what you’re up to.

Make the promo codes different for each different social media site to encourage people to follow you on multiple sites.

This can help you track which sites are popular with your clients or customers and which ones are not. Another way to track the popularity and social nature of your social media pages is to host a competition of some sort on your social media where the prize is a promo code. Your loyal customers will show themselves and it’s a quick way to get some traffic to the site. An example might be asking your Instagram followers to hash tag their best photo with your product.

Do you use promo codes for your online business or do you avoid them completely? Let us know your thoughts on the matter!


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