Promo codes are often sought out by first-time buyers before purchasing new products, and brands must determine how and when to use promo codes in a manner that is most effective for their consumer marketing strategies.
While this may be a challenge for brands looking to protect their pricing strategy, many can use such promotions to their benefit.
Offering discounts and coupons for your products is a great way to enhance already existing advertising spend and increase visitors to your brand and marketplace listings. When paired with an external marketing campaign, promo codes can not only give an immediate boost to online sales but also help organically optimize the listings within Amazon and other marketplaces.
Here at Whitebox, we performed an analysis on the impact of promo codes on customer retention in the weeks following a promotion. Here are our findings:
For any given month during which the promotion was active, we saw total customers for the month rise to an average of 25 percent higher than any previous month.
Promo codes drove a much higher total first purchase for new customers, allowing the average total number of customers retained to be higher than 88 percent of the prior months that the campaign was benchmarked against.
- On average, during the week following a promo code discount, search frequency increased approximately 15-20 percent over the previous weeks – showing a clear lift in brand awareness.
- Additionally, though the subsequent month’s retention eventually returned to pre-promo code numbers, there was a clear increase in total purchasers
Recently Whitebox ran a promo code that listed on a client’s Facebook page that had 21,000 likes.
Orders increased twenty times over previous average sales the day the promo launched. 89% of the initial sales were driven from the promo code, increasing the client’s Amazon category rank from approximately 100,000 to nearly 8,000.
Most importantly, the promo code had longer-term effects weeks after the initial promo code surge: it increased organic search and advertising sales by 210 percent
Check out the chart to see just how much it changed sales.
What does this mean for brands contemplating promo codes?