Discount Code

A discount code or promotional code is a combination of alphanumeric characters that e-commerce entities make publicly available to encourage purchases on their website. It's one of the oldest marketing techniques used to entice people to check out a new product or service by offering them at a lower price. 

Types of Discount Codes

Here are the basic types of discounts that discount codes offer:

  • Percentage-based discount

This refers to a flat percentage that the store subtracts from a consumer's order excluding taxes and shipping. Some stores require a minimum spend before applying this discount. 

  • Money off or fixed dollar discount

Like the percentage discount, this type may reduce the price for specific purchases when a minimum threshold is met. 

  • Free shipping

This can exempt the buyer from shipping charges although sellers usually limit this to orders within the same country only.

These codes can be offered within a specific time frame or as a one-time use code. 

Why Discount Codes Work

Discount codes benefit customers and businesses by:

  • Supporting sales and customer retention goals

A business can offer a discount code to attract fresh or repeat orders or sell unwanted product stock. This can be timed during the holidays or special seasons and events when buyers welcome or are open to volume or bundle (buy one, take one) purchases.

Companies can also issue them in exchange for reviewing one's product or responding to a survey. E-commerce stores can also use discount codes to reduce cart abandonment by offering this incentive to shoppers who are about to leave their website without completing the purchase. Others include this code in an email reminding customers about their forgotten products.

  • Enhancing a shopper's experience

Discounts can leave a positive psychological effect that reportedly feels better than receiving an actual gift. A scientific study even showed that coupons can make recipients feel more relaxed while increasing their level of oxytocin, known as one of the body’s “happy hormones.” 

Giving discount codes to first-time shoppers, frequent shoppers, client referrals, and re-engaging customers can produce such impact. Businesses can also make clients feel extra special by gifting them with a life milestone discount (their birthday or wedding anniversary) or for loyalty reward for so staying with the company for several months or years. 

  • Helping measure a marketing campaign's effectiveness

Using a different code for percentage and money off promos helps in tracking which discount type clicks the most with one's target audience. Also, by assigning specific codes to each platform used, a business can check which social channels generate the most leads.

  • Outwitting competitors

A discount marketing strategy is a great way to keep up with or surpass competitors, particularly if one’s business offers very similar products or services.

How to Launch Successful Discount Code Campaigns

Businesses can get the most out of discount codes by taking the following steps:

  • Conduct research.

A company should examine its industry’s current climate by visiting its competitors' websites and checking their current promotional activities.  

It also has to set the value for its discount code—it shouldn't be so large that the company will lose money. Also, the business should determine the best end date for the promo. Discount campaigns run for one to two weeks on average. But for single-day promos, it's advisable to time them during paydays, holidays, and last weekends of the month.

  • Make them single-use and personalized.

Deciding which segment of the consumer population will receive discount codes is the best way for a business to prevent its access to more people than intended. Companies can create a large number of unique codes or use coupon-building software to limit the release of these codes to eligible customers such as your e-mail subscribers.

  • Craft a clear message with an urgent call to action.

The discount ad should be short but accurately summarize the important details of the promotion. A separate page can offer a longer explanation about the product or service. Moreover, the announcement should inform shoppers that the code is only redeemable for a limited time to create a sense of urgency. Gamification strategies can also add excitement such as offering a discount of unknown quantity or telling customers that the code will be available only to the first x number of customers who will click a certain link. 

  • Get the word out.

Once the ad is ready, one’s marketing team can now send it through different channels, such as email, social media, and SMS.

  • Track your discount code's performance. 

Businesses can use apps or plug-ins to monitor data that will track promo codes to discover how each campaign performed or which type of discount was most effective.


About the Author
The Influencer Marketing Hub Team brings together a diverse group of experts with a passion for influencer marketing, digital trends, and social media strategies. Each piece of content crafted by this team is researched and written to provide valuable insights, tips, and updates for our readers. Our authors are dedicated to delivering high-quality, informative, and engaging articles that help businesses and influencers thrive in this rapidly changing digital world.