What e-shopper doesn’t love a good voucher code? And that’s good news for business, of course, as its enticement of a discount, more often than not, translates into a sale. It seems like a no-brainer – you are happy because you’re naturally generating sales and building brand awareness and consumers are overjoyed at getting a good deal.
Voucher codes are also an effective tool in tracking conversions, which is paramount. Moreover, it’s widely accepted that they improve conversion rates by driving new trials, reducing shopping basket abandonment and sealing the deal for that undecided shopper. These promotionals can also improve your reputation and point to customer referrals.
But there are a few things to be mindful of in utilizing this popular marketing tool.
Ironically, offering voucher codes via email may result in a loss of sale because some customers may forget that it’s contained somewhere in the text or simply can’t figure out how to redeem it.
Additionally, if you attempt to persuade them to sign up for your weekly (or so) email alerts by voucher coercion or giving them a heads-up that they will occasionally receive a promo code, it’s quite possible they will sit on a purchase as they lie in wait for the discount offer to turn up.
Be aware that with voucher codes, your business will end up paying an acquisition cost, which may muscle in on your margins. Unprofitability then becomes a part of the picture. Further to that, if you have to pay to advertise a promo code, each time it’s redeemed your costs go up (and up and up).
You want to ensure that your brand doesn’t become diminished in any way as well. ‘Voucher code’ shouldn’t be a codename for lower quality in product or service.
Still, there are many benefits.
Voucher codes not only exist to ensnare new customers; they can be a great way to retain existing ones. One way to go may be to serve up a follow-up special discount after the first purchase, which could translate into a repeat customer.
A good strategy is to use data mining to determine the likelihood of when customers will use the promotional toward a purchase and when you should put the offer out to target those customers effectively. The more attractive the offer, the greater the customer retention.
And because they are so trackable, you can determine what kind of offer has the most uptake, such as whether 5 percent off is better than 10 percent.
Matt Clarke, e-commerce manager at Swell UK, offers his advice: “You need to think very carefully about the value of the codes you offer, the amount of times you offer them, the people you offer them to and the products you allow them to be redeemed against,” he says. “If you get it wrong you could easily create an unprofitable campaign, so keep a watchful eye on usage and monitor your data in Google Analytics and react accordingly.”
The main gist of it is, voucher codes are – if used in the optimal way – very valuable. But most of all, you can do the heavy lifting yourself, in measuring their effectiveness to ensure they are indeed working.
This article is brought to you by LeadsCon New York.
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