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What are Promotional Codes and How Do They Work?

What are promotional codes?

Promotional Codes are a combination of alphabetic with numeric character groups that ecommerce sellers use to boost online shopping or buying. They are usually connected with a wide promotional marketing strategy. The price cut connected with a promotional code can be used on stand-alone products or total purchase.

How do they work?

Using a selected code can save you a certain dollar amount or a fraction of the purchase. There are some other ways the coupon codes work – they can be applied towards free shipping, free gift packaging, or free gifts with purchase. This is a great marketing platform to encourage customers to buy more products and spend more money.

As stated by Microsoft, a discount code, also known as promo code or coupon code is made of letters and numeric symbols. Often times it’s used for unique purposes and occasions, such as holiday marketing or yearly sales event.

Why do coupons work?

Every time an online retailer creates a discount code, it gives a great incentive for its shoppers to purchase more goods, and this exchange in turn enriches the consumer and the seller. Consumers receive a great deal on the stuff they need while the retailer sells and brings money in. One of the most attractive features of coupons is that they work equally great for new and for returning shoppers. According to various researches done over the years, these shopping coupons have a great boost to the overall shopping experience.

It’s been noted that getting a coupon is often more satisfying than getting a gift. One study showed that people who find promo codes have increased levels of oxytocin, which is directly connected with feeling happy.

Monitoring marketing results with promotional codes

One of marketing campaign goals always is tracking what strategies work and which marketing efforts generate the most customers that in turn translate into sales. Coupon clicks and usage is an easy way to monitor the marketing results. By attaching certain coupon codes to certain items, merchants can easily track what campaigns and advertisements work and what don’t. The same price cut can be triggered by various codes, so it is not necessary to create another discount for every ad. There is only a need for a different promotional code. As stated by Inc. magazine, a few slightly different codes can be created for any advertising platform to have original, targeted discount coupons.

Delegating specific letters and numbers to a selected advertising is very helpful if a shopper finds the promotion in an email or social media, but does not immediately take action and click on a code to get the deal. By entering the custom tailored promo code, consumer will allow you to capture and analyze his shopping habits because it is clear where he saw that particular code. The retailer will be able to understand the ROI of that advertising scheme and make the needed adjustments.

How to utilize promo codes

Using promo codes is a relatively easy business. When a customer applies his code during the final purchasing process, the store checks that all discount needs are met, and then allows the deal to go through. If the promo code states that the shopper will receive 15% off his entire shopping cart of $150 and more, the code won’t work if the total amount will be less than the selected amount. The store can also customize their coupons to exclude some brands or products.

Using more than one code

The ecommerce store has an option to allow their consumers use multiple discount codes or choose to limit them. The decision about the quantity of coupons rests entirely on the store owners, and they have to decide on that keeping their profits in mind.

Most common types of promo codes

There are three types of coupons the sellers can choose to use:
• Public codes – they are visible and easy to find by anybody. This type of codes is used for luring new customers in and for retaining time tested loyal shoppers.
• Private codes – these coupons are used for targeting a selected group of people. They are typically made available for returning customers and offer special shopping opportunities, such as special holiday or first-time shopping. These discount codes work for bringing new customers in.
• Restricted codes – These discounts are only applied for one customer and can only be used one time. Good examples of such codes would be an apology for a lost order, a thank you for being a faithful customer for 5 years, or once a year special sale invitation.

Most stores routinely use all three types of coupons on their sites. This ensures that the store is connected and providing a wide population of customers with great shopping opportunities.