Everybody loves a good deal and for a lot of consumers, finding these deals is part of their shopping experience. In this article, we’ll be going over what the best practices are for creating a solid promotion campaign that gets your customers engaged and boosts conversion.
Let’s start off by taking a look at coupon codes and discount codes. They aren’t necessarily the same but sometimes people use these terms interchangeably.
Coupons are shareable codes that companies can give out to reach a specific audience. When customers input this code during checkout, companies are then able to know where the customer received the code from and are better able to understand the path the customer took to complete their purchase.
Discounts are a promotion where certain products are offered at a lower rate. Although this could be aimed at a certain type of customer, the discounts are available to any of the company’s potential customers.
Pros and Cons of Promotions
Promotions work! That’s why we see so many businesses offering them. However, it’s important to keep in mind that promotions without strategic implementation can be risky. Here we’ll be looking at the pros and cons of this strategy.
Pro: Offering Promotions Can Earn You Conversions
Adding that additional value to the sale gives your potential customers a push in the right direction. Many consumers actually make an unanticipated purchase after being presented with a coupon or discount so use this to your advantage to help with your conversion rates.
It’s essential to note that larger discounts don’t necessarily mean more people are more likely to purchase. For example, a 20% discount could be enough to get some people to go through with the transaction but an 80% discount might do more harm than good. People just aren’t used to larger percentages being taken off the original price and usually equate this with negative scenarios. They may wonder things such as if there’s a defect with the item or if the item is being phased out. Always consider what your customers may be thinking at each part of the sales funnel.
Pro: Offering Promotions Can Help Find New Customers
By offering a promotion, new potential customers may be introduced to your brand. 80% of consumers report that they’re more inclined to make a first-time purchase if a brand offers them some sort of promotion. There’s a layer of trust being established almost immediately because you’re taking the initiative and allowing them to “risk less” by taking a chance on your product or service.
Pro: Offering Promotions Maintains Customer Relationships
Having discounts for your long-time customers is a great way to continually foster that relationship with them. It thanks them for supporting your business and also keeps them coming back. Discounts shouldn’t be handed out without a reason and rewarding loyalty is a great purpose. When you’re creating a new promotional campaign, keep your best customers in mind.
Con: Offering Promotions Means Less Profit
By lowering the cost of your products, you’re obviously reducing your profit margin and risking the chance of some people taking advantage of your promotion rather than becoming long-time customers. The best case scenario is that you’re offsetting this loss by increasing your conversions during the promotional period in hopes of customers also spending more on other products knowing that they’re already receiving a discount. These losses can also be mitigated if the promotional campaign helps to retain the customer in the future. As you generate your campaign, remember that these discounts are an investment into a customer’s lifetime value to your business.
Con: Offering Promotions Can Hurt Brand Image
Promotional campaigns aren’t bad. In fact, if done correctly, they really help to engage your customers. However, if you’re always running a promotional campaign, people may start to see your products as something that was never worth its original price. Customers shouldn’t learn to see your brand as “cheap” because then they’ll never be willing to pay full price for your product once your campaign is over.
Making an Effective Promotional Campaign
1. Who is your target audience?
Sometimes you may have your entire audience as your focus and other times you may want to narrow it down. You can choose if you want your promotion to be available to everyone or if you want to limit who is able to take part in it. For example, a storewide sale happening for the back-to-school season might let all customers take advantage of the deals whereas a discount that is only available for a certain group of people would be a student discount offered at checkout.
2. What’s the best time to run your promotion?
Think about when your customers might be the most willing to engage with your campaign. Sometimes companies intentionally run flash sales or week-long campaigns but more traditionally, big events and holidays are the most consumer-heavy times.
3. What are the conditions of the promotion?
Your customers should be able to fully understand your promotion from reading the conditions. Here, you’re able to specify who the offer is for and list out any exclusions you may have. By being specific, you have a better chance at bringing in the targeted audience that you had in mind.
As long as you’re being conscientious about what you want to accomplish and are aware of your profit margins, your promotional campaigns have the potential to be extremely effective in growing your brand.