Promo Codes For Your E-Commerce Website

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Good morning, internet fans. Ryan Perry here with Simple Biz Support. Today is Thursday, July 9th, therefore, it is Internet Marketing Thursday. I have Virginie Dorn with Business Website Center on the other side. Good morning, Virginie.

Good morning, how are you?

RP: I’m doing fabulous, thank you. You’re doing even better because you’re leaving on a vacation, congratulations.

VD: Thank you, thank you. Those are rare moments in my life and I’m going to enjoy it.

RP: Yes, should be a lot of fun. I’m looking forward to hearing all the good news when you get back. We’re going to talk about, before you go on vacation, is how to incorporate not necessarily the mechanics of how to incorporate promo codes into an e-commerce website, but more behind the why, the marketing, and some different ways that you can incorporate promo codes because as you were saying before we actually started this live episode was that a lot of people think that a promo code is, oh, you put a promo code in and maybe you get 10% off or 20% off and that’s not really what everybody necessarily wants even though that’s what we think about. How can you use a promo code besides just the 10% off and what are the advantages of using it in different ways?

VD: Yes, promotional codes also known as coupon codes or discount codes, but the term promo code is the one has gained the most popularity. If you’re going to use it on your website just use promo code, it is the most commonly used term for what it is. It’s a great marketing tool plan and sometimes just as you mentioned, you don’t have to give away money, sometimes it could be giving items away. Perhaps just to get us started and warmed up for today, give a list of a type of promo codes and you could offer on your website. You could do a promo code that offers free shipping, or free sales tax where you pick up the sales tax for the people shipping within your own state. Another one could be a percentage off a specific product of the entire total inside the shopping cart when the client is on your website.

VD: Another one could be a dollar amount off, and by this would be a dollar off on this pair of shoes. And again something, it could be for a specific product or it could be for the total inside the shopping cart. Another one is BOGO. BOGO is known as Buy One Get One free or sometimes not. It was always buy one get one free, but recently now it’s buy one get one half off. It’s not as exciting as it used to be for the consumers, but what that’s called BOGO, B-O-G-O and they’re quite popular among people who buy online.

VD: Another way to use promo code is to offer free items. Either if you buy this we’ll give you a free t-shirt or if you buy $100 on our website we’ll give you a free bag. Those are also another way to use promo codes. I think that’s about it, that’s all the types of promo codes you can use so depending on your business structure, the kind of marketing budget you have, again you don’t have to give money away, sometimes you give low-cost item to you to your consumers. It’s all about the valued perception the consumer has.

RP: Right. Let’s talk about the valued perception there for a minute because there’s plenty of jokes going around. A guy will spend $2 on a $1 product when he needs it, where a woman will spend $1 on a $2 product just because it’s on sale. I think the best national big brand example of that is JC Penny’s where a couple years ago they said, “You know what, we’re going to get away with sales, prices, we’re going to get away with all the gimmicks, and we’re just going to give you a fair rate out-the-gate, no haggle, you don’t have to worry about looking at clearance racks and all that type of stuff.” Their business tanked, I mean it tanked really bad.

VD: Yes, it’s all about perception. Especially if your target audience is women with disposable income, maybe between the age of 30 and 40, those are high-consumer target audience. They love something for free, they love to get a special deal. Even though the deal sounds ridiculous, like $1 off. That feeling a lot of consumers get about, “Oh, I got a great deal just because I used a promo code,” and then they buy more from you because of it. They feel they get something special each and every time.

VD: It also goes back to your target audience which we have talked so many times, but you really have to define who your best client is, who gives you the most pleasure and the most profit at the exact same time. That’s your target audience, those are the people you want to go after. Those are the people you want to develop specific promo codes for. Then guys like Ryan, maybe a percentage off is not that exciting and maybe a free pair of boots or something to add to the cart might be better. You have to think of all that.

RP: Right. While you’re thinking about that, I forget who I was talking to, but also if you understand your sales metrics very very clearly, if you’re one of those people that keeps track of their numbers like you should be, there’s also evaluating, “Okay, what is our average sale? Consistently we sell $45 of product on our website, what would your profit margins be if you could get people to get to the $50 mark?” If you understand that on average you’re selling $45 that’s kind of your sweet spot, but I’d really love to get to 50, is then go, “Okay, well that’s going to be your promo code, is going to be relevant to, I want to take a metric from here to here, and I’m going to entice people to do something.”

RP: You know, another great thing is even Taco Bell now has happy hour, where they have dollar drinks. I think it’s between like 2:00 and 3:00, or excuse me, 2:00 and 5:00. I don’t know if it’s weekdays or whatnot, but obviously what Taco Bell’s marketing is telling you is that, “Hey, between 2:00 and 5 o’clock, those are slow times.” We want to entice more people to come through, because every hour that goes by that they’re not making a sale, that’s lost profit. They can never make that money back.

RP: So even if they have to discount it to bring more people in, that’s better than losing that money all together. So you had talked about, before we started the conversation or before we started this episode, was that you could also put time metrics in place. That the promo code expires at a certain time, but I think as a business owner, don’t think of a promo code as, “Oh, I just have to give 10% off or I’ve got to do this because women want a good deal,” which is totally true, but look at your business and go, “Okay, how can I use this as a marketing tool to drive my profits north?”

VD: Yeah. You’re right, a marketing tool to make more money, not to lose money, and if you think a promo code is going to make you lose money by giving something for free, you’re in the wrong mentality. Maybe you’re thinking too much as a very small business owner, you really have to think outside the box and use that marketing tool to generate more revenue. So you give something away for free, but in exchange you’re going to make more money. It’s all about the data and tracking.

VD: You mentioned tracking, also, promo codes are a great way to figure out which marketing campaign offline is working best for you, or even online. I mean, if you do a TV advertising, you might want to use a special promo code just for the TV advertising, and then the back-end of your content management system you should be able to tell how many people have used the TV promo code, how many people have used the radio promo code, and so forth. That way you can see, “Wow, it seems like everybody has been using TV, maybe we should continue with advertising on television.”

RP: Right, and you know the key thing for that, for the business owners out there that are watching that haven’t thought about this before, is that you really want to make sure that that promo code can only be found in one location. If you start using it in multiple locations, then you really are not sure where that business comes from, and the other thing I like that you said, Virginie, is by splitting those promo codes up, it’s a great way to track exactly where people come from.

RP: You know, as a marketing consultant for clients, one of the things I always tell them is, look, whenever you get a new customer, you need to ask them, “How did you find us?” “Well, I found you on the internet.” “Okay, that’s a pretty broad statement these days. Did you find us through social media, was it a shared link,” did they do a Google search, did they find you through Yelp, so sometimes you gotta dig a little bit deeper and by having a promo code that only shows up in one place, if they’re using that promo code you know where the origin… You know, it may have been a referral. A friend may have emailed this information to them, but it was initially found here, like you said either a TV or a radio ad, so those promo codes need to be uniquely different, and however you want to segment your audience, different promo code, different promo code, different promo code.

VD: Yeah, and you touched up on social media and so forth. Now companies are using promo code as a reward for following them on Facebook, a reward for leaving a review. So it’s like, “Oh, do this and we’ll give you a promo code of 30% off on your next purchase.” So it’s almost like you have to work a little bit to get the promo code, but in the end the consumer’s even happier because, “Well, I did the work and look at that, now I get 30% off to use,” and they go back to the website and buy some more. So it’s good to use on social media platforms as well.

RP: Yeah, and I… You touch on another thing there and the fact that maybe you give 30%, which pretty much wipes out your margin, but what you’ve got on the back-end is going to last you a lifetime. If you can get a review, if you can get a share… Although, we have to be careful ’cause the FCC just came down, what a month ago? Maybe three weeks ago, and said, “Hey, if you’re doing any promotions like that where people are sharing your content as a business through a contest, it has to be clearly defined that this is a contest, this is why people are sharing it, ’cause they have an opportunity to win something.” So you do want to be careful about that and make sure you have your attorneys look at the FCC guidelines if you’re going to do some sort of online campaign.

VD: Yes, and those guidelines are always very grayscale to me.

RP: That’s exactly what your attorney wants to hear. “That’s more of a guideline than a law, come on!”

VD: Well, it’s so true. You read any of the internet law or anything that regulates the internet nowadays, it’s still very grey scale. People will look at it and interpret it differently because it’s not clear, it’s still new technology. 10 years ago we were not on the internet all the time. Nowadays, everybody has an iPad in every room of their house, smartphones, I mean it’s crazy. So we’ve come a long way, and the law and regulations has yet to caught up that thing.

RP: Yeah, alright. Well, tell you what, let’s go ahead and review. Why don’t you kinda review some of the top talking points, if you will, as far as how you… Excuse me. How you can use a promo code besides just the generic 10% off.

VD: Okay. So, again, understand your target audience and based on what you define, develop a promo code that works exactly for them. Iit could be a percentage off, dollar amount off, buy one get one free, which is BOGO, it could be a free item added to the shopping cart if they purchase a specific product or they purchase a certain amount of dollars, it could be free shipping. So there’s different ways to use your promo code, but again, remember, it’s not the kind of promo codes you want as the business owner of the owner of a website, it’s what your target audience wants to see.

VD: Also, you can create a timeline just as you mentioned earlier where you can say a promo code is good from August 1st to August 15th and then on August 15th at midnight your content management system should deactivate that promo code and it should not be usable. It’s also kind of give an incentive to clients to buy quickly. And again, they use the tracking, try to use different promo codes for different marketing campaigns so you have a better understanding of which one is more efficient for your specific business.

RP: Alright, perfect. So that’s all the information we can pack in in 15 minutes on promo codes. Virginie, I hope you have a great vacation. We’re going to have a substitute person, it’s going to be Annette with Inspired by Annette. She subbed for you the last time so I’m looking forward to talking to her, and really excited to hear about your vacation when you come back online in two weeks.

VD: I’ll get you a t-shirt.

RP: Alright. Sounds good. Okay, everybody, that’s the end of this episode. I hope you found some great information. If you know somebody who’s looking to build an e-commerce website or is just kind of generically using promo codes, feel free to share this episode with them ’cause I think there’s a lot valuable information that we shared. Virginie, as always, I appreciate your time and I hope you have a great rest of the day.

VD: Good-bye.


About the Author:

Ryan Perry is the founder and CEO of Simple Biz Support, Inc. Ryan started video blogging in 2009 as an alternative to written blogs to create visibility and credibility online. During the workweek, he enjoys helping small business owners harness the power of video to grow their companies. On the weekends, he enjoys hiking and searching out waterfalls throughout the state of California.

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