Definition: Discount codes are personalized or publicly-released codes offered to customers as a purchasing incentive that reduces the price of an order. Discount codes can be an effective means for ecommerce stores to attract shoppers and encourage repeat customers.

Three common methods for offering discount codes

  • Percent Discount- The percent discount offers a flat percentage off a shopper's complete order. This is applied to just the purchase and would not include the shipping or taxes.
  • Free Shipping- This discount code saves the consumer from having to pay the shipping charges on an order. It can be specified to only include orders shipped within the country.
  • Fixed Dollar Discount- This code will offer a set amount off a purchase. A minimum purchase threshold can be set, or it can apply to any order value. For example: $10 off any purchase of $50 or more, or simply $5 off any purchase. They can even be offered for specific purchases (e.g. buy ten candles and receive $10 off the purchase), or for only certain items purchased.

Offer discount codes for a limited period of time

  • Time Frame: Discount codes convey a sense of urgency, which means they can't last forever. An example would be to have them used by a certain date, within a certain time period such as two weeks or even by the end of the current month they are offered in. There can also be a set number of times the code will work on the merchant's site, such as unlimited times within the current month, or as a one-time use only.
  • Limited Availability: The number of codes offered is dependent on the type of promotion. If discounts apply to one product in particular, the quantity must be tied to inventory. For store-wide codes, the objective is often to promote the ecommerce brand. In that case, the more a discount code is used, the better.

How to Build an Effective Discount Program

A link can be placed at the point of checkout for the consumer to click and receive a discount code to apply to purchase, or a link to click which will send the consumer to a discounted section. There can also be a link for the consumer to print a coupon offering an additional savings. To achieve maximum results from your discount program, spread the word about it via your company's website and social media accounts. In addition, make sure to reference discount code availability in any SEM campaigns you run.

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