Taking Advantage of Coupon Codes

Taking Advantage of Coupon Codes

Coupons and discounts are an effective way to encourage your customers to buy your product. According to a 2023 study, online shops with digital coupons receive 125% more clicks per day than those without coupons.  There are a lot of benefits (and a few downsides) to consider when deciding on a coupon strategy for your business.

The Upsides of Coupons:

1. Attracting new customers. If people are unfamiliar with a brand, purchasing from the brand innately has risks. A discount encourages many to try out the brand to see what they think as it lowers the loss potential. And if you can prove your value with a great product, you get loyal customers. 

3. Remind former customers. If you sell a delicious, quality product customers will want to buy from you again. With so many businesses competing for attention sometimes people just…forget about yours. They already know they like what you sell and trust you. The hard work has already been done! Sending loyal customers a coupon code can remind them how awesome that thing you made was and re-engage their purchasing.  

4. Capture customer contact info for marketing. Enabling coupons for customers subscribing to your shop updates encourages those customers to opt in to receive your marketing messages. As previously noted, customers often need reminders that we are ready to fill a need (or craving!). 

5. Track your funnels. Customers come to you via a variety of sources. With coupon codes you can track some of those initial contacts. You can create categories of coupon codes: New customer, new subscriber, contact from an event, sale from digital marketing. This allows you to see what is working for your business because you can identify which ones were used most frequently.

The Downsides of Coupons:

1. Discounts cut into your profits. Coupon codes encourage customers to buy, but when they do you get less money. Before sending coupon codes to everyone, consider the costs to your business. If your profit margins are low, coupons will make them even lower. Many build the cost of coupons into the price of the product. For example, if the math says you should sell the cookie for $2.50 in order to make your profit goal and you are sending out 10% off coupons, good practice would be to increase the price of the cookie to $2.75 to offset the discount cost. 

2. Too many coupons and discounts reduces the value of your product. Coupon codes can also have an unwanted effect on the perception of your product's value. If someone expects to pay less than your set price because they are always getting a coupon code, you could fall into the trap of always discounting products to get the sale. This eats away at your profits and creates an expectation from your customers that discounting is normal. The trick to overcoming this challenge is to run coupon campaigns and provide discounts infrequently so that customers don't get used to it.

Best Uses of Coupon Codes

To use coupons, you must first create them. From your Castiron shop admin page, Settings>Coupons takes you to the page to create and edit coupon codes. 

For each coupon code you can set the following conditions to use the code: 

• Minimum number of items in cart 
• Minimum $ in cart
• Number of uses per customer
• Start and end date (end date optional)

1. New subscriber coupon: Create a coupon code for anyone who signs up for your text/SMS marketing. It encourages them to opt in for future marketing campaigns and to make a purchase. *A new subscriber coupon is automatically created when a Castiron shop goes live and can be made inactive or edited at any time. In the admin page of your Castiron shop, go to Marketing>Popups. On this screen you can ensure a pop-up will appear to customers visiting your online shop that encourages them to sign up for updates. This can be made active/inactive. We recommend keeping it active because it works. 

2. Thank You coupon. Sending a small discount coupon to a customer thanking them for a recent purchase is an effective way to get them to return to your shop and buy again. Castiron has an automation for Thank You emails that sends a coupon code a week after their order is fulfilled. You can inactivate or edit the coupon amount (the preset is 5%), but the numbers show they work to ensure repeat customers. A warm lead is hotter than a cool lead! To find this coupon in admin Marketing>Automations>Thank you offer, click on 3 dots to "Manage Automation".

3. Friends and Family Coupon: Do you have close friends and family that you want to give a discounted price to every time they order? Create a unique Friends & Family coupon code from your coupon page and share it with your inner circle. You can make it open ended so it never expires. Then you don't have to do the awkward dance of having the price conversation each time. They feel valued and you can stick to the boundary you set. 

4. VIP Coupon: Create a discount code for your VIP customers. Maybe it’s the people who spend the most money or who order most frequently (both can be tracked in Analytics on the admin page Castiron). Perhaps it’s the people who are members of your private Facebook group or who engage the most with your business on social media. Share the code with this select group of customers and they’re sure to feel appreciated. 

5. Event Coupons: Create a coupon code and add it to a flier, handout, or sign at events and markets. There may be a crowd of people who are interested in your product but with divided attention aren't buying it on the spot. Send them away with a coupon code to encourage them to visit your online shop later. 

6. Presale Coupons: Holidays, occasions, and product releases can be overwhelming for many food businesses. Setting up a Presale when you anticipate a lot of orders can help you know what to expect and plan your time effectively. Create a coupon code with an expiration date (order by XX date to get XX off with code XX) to encourage customers to order ahead so you can plan ahead. 

7. Marketing Messaging Coupons: Encourage customers to open and read your marketing messages by including an occasional coupon code that rewards those that take the time to read the messages you’ve sent them! In Castiron, you can add existing coupon codes directly to your SMS messages with one click. 

*A note about Coupon Codes in Castiron custom products: Currently, coupon codes can only be used for Standard Products. If you would like to accept coupons for your Custom products, we recommend including a "coupon code" line in your Order Forms and adjusting the price on the invoice to include the discount. The team is planning additional options to include coupon use for customs the near future.