Here’s the advice you were given.
Spend money on Facebook and Google Ads.
When people land on your website use smart tech (we won’t call it a popup, we’ll call it an overlay) that offers your website visitor a 10% discount. Flashing lights. Hell, you can even use one of those wonderful virtual roulette wheels…
Then get their email address.
Send them a link with a code, something like SAVE10.
If they don’t buy. Badger them.
If they don’t buy still, at least you have their email address so they receive your newsletter.
The above is the advice that proliferates the internet. Is it good advice?
Is giving money away good advice?
Have we learned what impact a 10% discount code for all has upon our profitability?
Or, have we gone with the popular consensus that the discount code ramps up conversion rate?
I’m about to write something that may put a few peoples hackles up. Discount coding is a lazy approach to ecommerce marketing.
Why? I’m not a big believer in advocating pissing profit down the drain.
Why use discount codes?
There is the exception.
The business model synced with the marketing strategy where the 10% discount code drives profitability. Where it’s been proven, through testing, that the discount code has an impact upon business greater than the standard pricing model.
What I’m not comfortable with is the ‘inflate by 10% to deflate by 10%’ tactic. It’s ugly. I prefer honest pricing. It’s a good way to run your business.
Discount codes do have their place.
Especially unique codes that are granted to individual customers (Most ecommerce platforms allow you to do this) as a reward for leaving a review or as an apology for a delivery mishap. That way they feel a little more ‘earned’.
Discount coding, en masse, is a tactic employed when building your brand feels like too tough a practice.
“we can’t be bothered to create intrigue, build demand or instil urgency… instead, here’s 10% offer, dear customer, will that do?”
As a persuasive tactic? Discount codes are everywhere. Do they hold the appeal that they would have done in days of old? No.
As a hook to acquire email addresses? Sure. I get that. I understand why there’s a value to acquiring a ‘low funnel’ email subscriber. The problem, however, is that an email strategy that then personalises the communications with that subscriber is a rare thing indeed.
Here’s my point.
I don’t want you just jumping in with this misbelief that discount codes are a bulletproof route to ecommerce success. They’re not. I’m hired to sweep up the mess left by discounting tactics that don’t align with business profitability. It’s an ugly job.
All these wonderful pieces of technology available to you. They slot into your strategy, they don’t lead your strategy. Think about it. The case studies and benefits presented by exit-intent and pop-up platform providers… of course they advocate the use of coupon codes. The technology thrives on the back of their use.
My question to you is, are you confident that discount coding is a strategy that you have proven to work for your ecommerce business?
Is this our secret or shall we pass it on?
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