By Natalie Pantaleo
If ever there was a marketing win-win, it’s the promo code.
Customers have been delighting in discounts since the very first one introduced by Coke-Cola in 1887. Asa Candler, Coke’s co-founder had the brilliant idea to mail tickets good for a free glass of coke (worth a whopping $.05 back then) to consumers across the country. By 1913, 8,500,000 Americans had enjoyed a free Coke!
The rest is literal history. Candler’s tickets evolved into coupons, which evolved into promo codes used extensively today across direct-to-consumer (D2C) marketing, especially on digital platforms and TV.
“One Campaign Commandment we share with clients is skillfully creating codes that provide customers with an incentive to buy while also facilitating upsell opportunities for marketers when done right,” says Rick Griswold, Vice President of Data Analytics at LifeBrands D2C (LBD2C). “Of course, promo codes also provide critical intel by allowing us to track the path to purchase for proper attribution,” he added.
Not only do consumers appreciate a good, deal, it makes them feel good. A 2012 study by the Center for Neuroeconomics Studies at Claremont Graduate University revealed that people who received promotional codes had heightened levels of oxytocin, a hormone directly related to love, happiness, kissing and cuddling. Aww. In fact, the study showed that oxytocin levels were increased by 38%!
Additional research suggests consumers have come to expect discounts with product ads, and retailers who don’t offer them risk losing to competitors. During the pandemic, online shopping and use of discount codes increased even more. As reported by BigCommerce.com, 92% of consumers in the U.S. used a discounts when making purchases last year.
“On the TV side, we work closely with clients to develop memorable promo codes and offers with the greatest perceived value,” Mark Jones, LBD2C President and CEO, says. “It’s not as simple as say, free shipping, to get a consumer to redeem a promo code, although that’s been quite successful. There’s a method behind promo codes, and with the right strategy, they are an essential D2C tool that can really help increase Conversion and AOV as well as ROAS.,” Jones added.