What are promo codes?
Promo codes, otherwise known as discount codes or coupons, are letter and number combinations that customers input to redeem a discount during purchase. Promo codes help to:
- Generate new leads
- Increase conversion rates
- Track marketing campaign success
In this blog post we’ll outline some best practices on how to use Promos and Offers to your advantage and win new customers, retain and reward loyal members of your community and maximize your growth.
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How you can use promo codes effectively
Goal: Win New Customers
Whether you’re starting a new business, opening a new location, launching a new programme or class, or simply looking to expand your existing community it’s important to always be looking for the best ways to attract new customers to your business. Promo codes provide the perfect tool for enticing customers to check out what your business offers, and begin turning them into loyal customers.
Promo Codes can be combined with many different marketing approaches for winning new business such as:
- Social Media Campaigns – sharing promo codes via Social Media, or partnering with Influencers who will share the codes with their large networks of followers can help spread the word rapidly and target the demographics you’re most interested in.
- Seasonal Campaigns – many Glofox customers run annual campaigns at key seasonal moments such as Black Friday, January, or Easter when customers are eagerly looking for deals. Often these seasonal events are linked to times when people are looking for the perfect gifts for their loved ones so it can be worthwhile targeting demographics who might not normally be your target audience.
- Email & SMS Offers – embedding promo codes in your marketing emails and newsletters or sending them out via SMS to prospective leads can be another effective way to help convert new customers. The Glofox Amplify New Leads & Clients workflow can be set up in minutes and allow you to easily convert and onboard new customers, and embedding appropriate Promo Codes in these flows at the appropriate interval can help give that extra push needed to get a customer over the line.
Goal: Retaining Existing Customers
Efforts to retain existing customers can often be much more lucrative than campaigns to win new business with research showing that even a 5% increase in retention can result in up to a 95% increase in profit. Investing in marketing campaigns focused on retention and win-back strategies has the potential to make a significant impact on your 2023 success.
Promo codes offer a great tool for engaging with existing customers and showing that they’re valued members of your communities. 61% of customers say that being rewarded just for being a loyal customer is the most important way a brand can interact with them.
By utilizing the Glofox Amplify Member Expiring and Member Expired workflows for example, and embedding a Promo Code within these communications you can achieve a valuable automated retention tool that incentivizes your members to remain loyal to your brand and community.
Create Urgency & Scarcity
Urgency can be a powerful tool in any successful promotional campaign, creating a time pressure for customers that compels them into converting their purchase immediately so as to not miss out on the deal.
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Slowing Your Fitness
When given the time and space to do so, many customers will be hesitant with any significant purchasing decision, taking time to weigh up pros and cons and often ending up putting off a final decision indefinitely. Making your promotional campaigns time limited – reminding your prospects that they need to act fast – you can tap into their fear of missing out and mitigate against hesitancy.
Similarly using scarcity as a tool in your marketing campaigns can have a similar effect of reducing hesitancy and driving up conversion. For example, setting a limit on the number of customers you’ll allow to use a particular promo code, and informing your prospects of this limited number, can push customers into racing to get the deal before someone else gets it ahead of them.
The rule of 100
Knowing which type of discount will be most appealing and effective for your customers is a vital piece of information. In some circumstances a typical consumer will be more inclined towards a percentage discount, perceiving it’s value to be higher, while at other times a fixed discount (e.g. $20 off) will be the more attractive.
Marketing Professor Dr. Jonah Berger’s The Rule of 100 offers a simple and effective way to gauge which discount type is most appropriate by looking at which will have the most perceived value to your customers. This rule states that for a price under 100, a percentage discount will appear to offer the most value to the consumer, while for prices above 100, a fixed amount will start to appear to be the more valuable – even when the actual economic value is equal.
For example a $20 purchase with a 25% discount will appear to the typical consumer as a better deal than $5 off. Conversely a $500 purchase with a 25% discount won’t look as appealing as getting $125 off the price – even though in both examples the economic values are the same.
Glofox supports Percentage Discounts today as standard and are working towards support for fixed amount discounts in the near future. Typical transaction values for most Glofox customers sit below the $100 threshold where percentage discounts are most appropriate.
Make the most of Promo Codes & Discounts
To ensure you get the most out of your promotions, offers and discounts it’s important to set clear goals for what you’re trying to achieve, understand what will work best for your brand and your customer base and have an experimental mindset to try new approaches.
If you have any feedback or questions about Promo Codes please contact [email protected]