Voucher Codes: The Advantages And Disadvantages From A Retailers Perspective
The voucher code debate – are genuine voucher codes simply a cheap and effective marketing tool or do they harm your brand?
Having a ‘voucher redeem’ area on your site could be looked at as eating away at your profit margin and allowing all customers the opportunity to get a discount. The customer may have purchased from your site even without a code, so why do it?
Being listed on voucher code directories with as many as 5 million potential cusomers seeking voucher codes on a monthly basis will naturally generate sales and increase your brand awareness. As a retailer, factoring in a voucher code into your marketing plan will reduce your profit margin but in return could significantly increase sales volume – and getting a sale must be better than nothing.
Maybe seeing a ‘voucher code redeem’ area encourages potential customers away from your site to seek a promotional code from one of the many code sites which could be perceived to be a bad thing but if you were buying an identical or similar product and multiple sites sold it, would you purchase from the one that offered a 10% voucher code? Price is not always paramount as I’m personally a a great believer in product support and customer service but in today’s price conscious climate, customers enjoy feeling like they’ve got a great deal and a voucher code does just this as well as giving you the edge over your competitor. You may already have an extensive list of previous customers lying dormant who have opted in to receive marketing that could be emailed with a ’10% off code during December’ which would encourage previous customers back onto your site. In addition to being listed on voucher code directories it brings additional exposure to your brand and don’t forget there is an increased likelyhood that these customers will return and buy again.
A voucher code does not always have to be generic for example like ‘Save 10% off all products’, if your average basket order value was around £80 you could state spend £100 and save10% and this would be a nice a way of icentivising customers into spending a little more and increasing your profit. There are different types of strategic codes that can be used and our research shows that a high percentage of UK shoppers in search of a specific product take the reverse psychology route and opt to trawl the endless list of voucher code sites looking for a appropriate retailer and offer a voucher code before turning to Google to seek out their product through search.
The Down Side
Offering a voucher code opens up a new channel for sales as your code could be listed on freebie sites, voucher code sites, blogs, forums and many other sites but the viral spread of a code from site to site can be difficult to manage so this needs to be considered. You may notice voucher code sites offering exclusive codes and the reason for this is that they receive additional commission and an exclusive code from a retailer in return providing sites with increased exposure. Exclusive codes such as MVCBATHSHOP for example also help minimise the viral spread of codes as the code is created personally for My Voucher Codes in this case.
In all honesty we live in world of bargain hunters and savvy shoppers but you may not wish to be portrayed as a bargain/promotion retailer due to the fact that customers may perceive your products to be of lower quality and if this is the case you must ensure that voucher code directories fully understand and respect this as they may still list your site, with or without a voucher code.
Also, a retailer offering codes on a consistent basis makes it quite clear that you have enough margin to play around with and if you suddenly remove all active voucher codes then this can lead potential shoppers to seek alternative sites offering a voucher code. It’s also important to consider that there are shoppers who don’t even browse voucher voucher code directories and base their decision purely on price taken from Google search so it’s important not to increase your advertised price to cover your voucher code as you could be cutting out the shoppers who make their purchasing descions purely on displayed price. Admitedly it’s a fine balance between giving enough away to incentivise shoppers and remaining price competitive to non-voucher code users.
Before ruling out the use of offering codes it’s really worth taking some time to understand how they can be used as part of your marketing plan as there are a multitude of options available to incentivise people to your site using strategic codes.
Finally, please don’t just think that voucher codes are successful with purely high end well known merchants. Voucher code directories are prepared to add retailers large and small which helps to provide additional exposure regardless of business size, and should be considered by any retailer looking to increase online sales volume.