Mumbai: Promo codes—the backbone of partner marketing—are highly powerful marketing tools. When used correctly, they have the potential to attract new customers while also rewarding existing ones for their loyalty. Many brands understand this—according to Coupon WhiteLabel, a company that creates coupon pages for hundreds of companies around the world and drives traffic to them, the number of promo code online-purchases in India in the first half of 2022 increased by more than 40 per cent.

Even so, many brands still don’t know how to properly work with promo codes. Analysing their customer data, Coupon WhiteLabel came up with a list of the most common mistakes brands make when using promo codes—and how to avoid them.

Mistake #1: Treating promo codes as a last minute solution

Promo codes can provide a great last minute boost to sales for brands that want to clear excess stock. But to be truly effective, promo codes need to be integrated into a brand’s entire sales and communication strategy.

Promo codes are a vital part of a healthy sales strategy, mostly because they offer real incentives to the customer right at the end of the decision journey. But when used correctly as part of a comprehensive plan, they can variously deliver new customers, help launch new products, boost sales during a slump, or increase visibility during a peak sales season.

Mistake #2: Assuming that promo codes work fine on their own

It’s clear that promo codes can help increase sales, but they are not miracle workers. Unless your brand is offering truly massive discounts, promo codes are most effective when they can be contextualised within a customer’s life. By connecting your brand (and the promo code’s discount) to a holiday, seasonal event, or trend, you can improve your brand’s emotional connection with the customer.

Brands should be continuously analysing their customers’ reasons for purchase: why do people buy our product? What are there holidays, seasonal events, or trends that tie in well with my product? In a normal year, there are thousands of events that can amplify the power of a promo code. From New Year's resolutions to spring springing, graduation season, festival season, wedding season, back-to-school season, autumn (pumpkin spice latte anyone? ), and the holidays, brands should create a calendar of events that correspond to their product offering and consider how these times can fit into their overall message.

Mistake #3: Disregarding deal hunters

An estimated 35 per cent of customers use coupons that the brand did not give them directly, instead using promo codes they found by searching on the internet on third-party platforms and websites. This represents a certain loss of control for you—a third of your customers are at risk of finding a better deal elsewhere, being frustrated by expired promo codes, or something else that results in a bad experience.

How can you reconnect those customers with your brand? Coupon WhiteLabel’s data shows that additional coupon sites launched by the service in collaboration with brands help bring most of these customers back under the control of the brand. This allows the brand to better manage the customer experience and focus their attention back on the desired products.

Mistake #4: Prioritising a short-term sales boost over building long-term loyalty

Promo codes are a tried-and-true way to boost sales by taking a bit of a hit to your margins. But if you take the time to foster an emotional, long-term connection with the customer, you can reap the lasting benefits of customer loyalty.

Instead of just looking at promo codes as a way to trade a bit of your profit margins in exchange for a sales boost, you can instead consider promo codes as a way of building rapport with the customer. Offering special promo codes for different groups can help make your customers feel like they’re important to you. Take a look at your customer demographics and consider offering tailor-made promo codes to different groups within your customer base—this can be especially effective when targeting lower-income groups like college students, public servants, or senior citizens. That being said, high-income groups also love a good discount, so don’t leave them out—instead, consider linking the discount to a larger cart size.

In each of these cases, the promo code will be most effective when combined with a clear and well-planned communication campaign aimed at the group(s) you're targeting.

Why promo codes are right for your Indian business

When used correctly, promo codes are a great way to incentivise conversion. As ecommerce booms in the wake of the pandemic, brands in India and beyond should take a thoughtful look at their online strategy and ask themselves how they can get the most out of their promo codes.

The author of the article is Admitad India country manager Neha Kulwal.