Promo codes, also known as voucher codes and promotional codes are, as we mentioned in our previous post “The promotional code, the greatest sales partner a brand can have” a natural progression in the move to shopping online. What used to be known as “ cut out coupons”, printed in newspapers and magazines for consumers to cut out and use in the shop, are today simply alphanumeric codes inserted into the online shopping process.
Their use has become prolific, a recent report by Valassis shows that during 2019 nearly 90% of consumers used some type of discount coupon whilst shopping online, their widespread use has thrust Promo codes into a privileged position, a prominence which brands need to exploit.
Promo codes have shown themselves in recent years to be a formidable tool in helping sales grow in every type of business:
Nevertheless, many brands continue to see promo codes as having a negative overall effect claiming that they devalue a brand, cannibalize sales or that they drive profit margins downwards. So, to contrast these arguments, we have compiled some statistical data from a number of different studies carried out in the last year. These datapoints analyse how promo codes influence the customer’s journey. Using this data, brands can begin to understand how the market has become driven by the demands of the ever increasingly empowered consumers and have some insight into its future.
89% of users say that by using coupons they have saved a lot of money.
86% of consumers claim they are influenced by promo codes before deciding which brand to buy either in terms of products they have already tried or new products.
The use of promo codes is set to increase by 68,4% by 2022.
Worldwide, the mobile coupon industry will grow by 56.5% by 2025.
Source Orian Research.
32% of consumers prefer to receive their coupons on their mobile.
92% of users look for a good discount, even when they are not intending to buy.
Source: Hawk Incentives
83% of consumers say that coupons have changed their buying behaviour.
68% of consumers argue that promo codes promote brand image and brand loyalty
Source: Ready Cloud
50% of users that receive promo codes from a brand are more willing to visit the brand´s website.
Source: Ready Cloud
It is clear from the above data that the motivation for consumer’s purchase is influenced by promo codes, therefore, the question you need to be asking is not whether to use coupons or not, but how to use them strategically so they can help grow your business. However, it is equally important to understand exactly how they can work effectively with the different platforms you use in order to generate both value and volume. Achieving that goal that is not always as easy as it sounds, we would advise you to seek information from experts in the sector, those who can help you make the most out of promo codes.
It is the consumer´s nature to look for the cheapest price or the so-called “bargains”, One only has to think back to the times when everyone would wait for the sales season to begin or cut out the discount coupons in newspapers or from the back of cereal boxes and from advertising catalogs to understand that today’s Promotional Codes are nothing more than natural progression from those coupons and that the move from offline to online was not only a logical step forward but also a very necessary one because of the high demand from consumers.
What is the purpose of the Promotional Codes?
Loyalty. Over time statistics have shown that rather than mistakenly believing that Promotional Codes can cannibalize a product or brand they can actually create loyalty. A study by WhaleShark Media y Forrester Consulting shows that digital Promotional Codes generate an increase in the number of users as well as an increase in the average spend per consumer.
The report’s data points out that e-commerce is growing year after year at a staggering rate and one of the reasons for this growth lies with the Promotional Codes, since 80% of consumers who buy online are attracted by the codes on offer. In addition, consumers claim that they don´t just buy their usual brand or products with Promotional Codes but they also use them to buy new products or brands.
Other points to note from the study are that they reduce the probability shopping cart abandonment and that those who use the promotional codes spend 18% more on average than those who don´t use them.
Therefore, when it comes to Promotional Codes, we are talking about “win to win” campaigns that are able to foster existing consumer loyalty and attract new ones, which is undoubtedly excellent news for those online businesses that have already incorporated them into their e-commerce strategy plus for those who are more reluctant to use them it shows that they are a great new opportunity to maximize sales.
For a tool to be effective, we need to keep to date with the latest cutting edge developments and to keep in mind that in this area the tendency is for the Promotional Codes to find the consumer rather than the other way around.
How should we find our consumers?
By paying special attention to social networks, email marketing and above all to mobile devices and apps because at this moment in time it is here where the largest number of users can be found. The key to reaching a consumer directly and timing it perfectly is personalization, so with a little ingenuity and good segmentation we can make promotional codes our biggest ally to boost direct sales.
For example, we can be creative such as giving top influencers in the industry our Promotional Codes to share them with their followers, why? Because a basic and essential aspect of the code is the reliability of its source; trust the influencer, trust the code.
To sum up: Promotional Codes rather than cheapening or cannibalizing a brand can actually help strengthen it. Price is of the greatest importance for any consumer and this added to the excess of supply can give those brands that understand the power of discounts a greater competitive edge in today’s market.