Sorry @Boden but I have a confession.
I don’t ever buy from you unless I can get 10% off (and hands up, usually I’m holding out for 20%). I expect I fit within your normal customer profile, so I’m assuming this is part of your strategy?
With this in mind, Browser Media set out to look at how our use and attitudes to discount and voucher codes have changed and it appears they are no longer a social taboo: 41% of people agree that they are much more socially acceptable than previously.
Supermarket shopping is the area in which most voucher codes are applied, with eating out and clothes/fashion in second and third place.
We’re most likely to source voucher codes from any number of voucher code sites but discount sites (such as Groupon) and cashback sites (such as Quidco) also feature highly.
The research also found that statiscally, if you target women with a voucher code who are aged 25 to 44, who live in Milton Keynes, Plymouth or Birmingham and have an income of between £28K to £41K, they’re quite likely to be receptive.
Why voucher codes work:
- They are easy to promote
- They are very shareable (so make sure you can fulfil orders if the offer goes seismic on social media)
- They help to increase basket value if associated with a specific order amount
- They are extremely trackable, so companies can easily determine their value (or not) to the business
However, as alluded to above, there are some potential downsides that companies need to consider. They eat in to profit margins – and it’s a double whammy if you have to pay for the discount code promotion itself. They may prevent people from purchasing if they wait for a discount (that’s me) and they increase checkout abandonment (as customers hunt for a discount if they see an associated text box) and they could potentially damage your brand if you don’t want to be associated with ‘cheap’.
Getting the right balance in using voucher codes for attracting new customers, retaining existing customers and as a customer services tool is tricky for any company, as is deciding on the specific offer. The biggest challenge however is in converting a one-off bargain hunter into a longer term, valuable customer. Five pounds off may work better in one sector than free postage and returns in another, and 10% off on orders over £50 might increase total sales more than 20% off on orders over £100 but in many cases it may take a variety of approaches, offers and tactics to secure a customer’s loyalty.
Ultimately, sales and marketing departments will only be able to measure the success of online voucher codes with some serious split testing. No company should even dip their toe into the discount voucher waters without measurement tools in place.
We hope you find the research results interesting reading. Please share your thoughts on whether you believe discount vouchers work, what types of offers work best and whether they are here to stay.