Discount codes are powerful tools for businesses that want to drive sales, increase their customer loyalty, and boost brand awareness. You can use them to entice new customers to make a purchase or to reward existing loyal customers.
But did you know that discount codes have more use cases than many people imagine? Exploring these discount code use cases and determining how your business may benefit from them can be a truly game-changing decision for your company.
One great use of discount codes is to offer them as a reward for customer referrals. You offer a referral code to customers who refer their friends and family to the business, and you’ll encourage word-of-mouth marketing and increase brand awareness.
A referral code can come in various types, allowing you to design flexible and interactive referral programs. Here’s how a typical referral discount program works:
You can tweak this structure to better suit your audience’s preference and business model. For example, if the customer successfully convinces someone to sign up on your website, you can let the customer have the incentive even if the referred person doesn’t make a purchase.
A real-world example of a business that has successfully implemented a referral discount codes strategy is Uber.
Uber's referral program provided existing customers with a unique referral code that they could share with friends and family. When a new customer signed up for Uber using the referral code, they’d receive a discount on their first ride, and the person who referred them would also receive a discount on their next ride.
This referral program was successful in encouraging existing customers to promote Uber to their friends and family, and it helped the company acquire new customers at a lower cost than traditional marketing methods.
Another example is Dropbox, a cloud-based file hosting service, they offer free space to both the referrer and the referred user. This creates a win-win situation for both parties, and it helped Dropbox to grow its user base exponentially.
One popular use case for discount codes is tiered discounts. Customers receive different discounts depending on the value of their purchase. For example, a customer who spends $100 or more might receive a 10%, while another one who spends $200 or more might receive a 15%.
This is great for incentivizing customers to purchase more from you to avail of higher discounts, leading to larger average order values. This also helps stores clear out any inventory that is not selling well.
Moreover, you can use tiered discount codes to target specific customers or customer segments. These may include frequent shoppers or first-time buyers.
There are, however, some downsides to using tiered discounts:
Despite the potential disadvantages, tiered discounts can be an effective marketing strategy for businesses.
One real-world example of a business that has successfully implemented tiered discounts is Starbucks. The coffee chain offers a rewards program that gives customers a free drink or food item for every 12 stars (stars are earned for every purchase) they accumulate.
As customers accumulate more stars, they reach higher levels in the rewards program and receive additional perks, such as free in-store refills and personalized offers. This tiered rewards program has been successful in encouraging customers to return to Starbucks and make more purchases to earn rewards and reach higher levels.
Another example is the credit card industry, where credit card companies offer tiered rewards programs that give customers more rewards and benefits as they spend more on their credit cards.
For example, a cardholder may earn 1 point per dollar spent on everyday purchases, but 2 points per dollar spent on travel purchases. As they spend more, they reach higher levels and earn more rewards or benefits.
Another use case is the ability to limit the number of uses for a specific code or offer it for a limited time.
This creates a sense of urgency and exclusivity, encouraging customers to take advantage of the offer before it expires. This can be particularly useful for clearance or end-of-season sales, where you want to drive a higher volume of sales in a short time.
For example, you can offer a limited-use discount code for a 24-hour flash sale. The code can only be used a certain number of times and will expire after 24 hours, creating a sense of urgency for customers to make a purchase before the code expires. Businesses can also use QR codes in their marketing materials, allowing customers to quickly scan and access a discount code that is only valid for a short period.
One example of a company that uses this strategy is Zulily, an e-commerce company that specializes in limited-time sales events.
They offer flash sales for a specific period of time, usually a few days, during which customers can take advantage of discounted prices on a wide variety of products. By limiting the time period of the sale, Zulily creates a sense of urgency that encourages customers to make a purchase before the sale expires.
Groupon does something similar. They offer daily deals that are only available for a limited period of time, usually 24 hours.
You can use complex discount codes to create customized discounts for specific customers or a group of customers.
For instance, you can offer a customized discount code to customers who have a specific product in their shopping cart. This encourages them to make a purchase. On top of that, you can use customized discounts to offer special deals to specific customer groups, such as students, military personnel, or even senior citizens.
You can offer a special discount code to students who can present a valid student ID. This way, you can attract a younger demographic and increase sales. Many businesses also offer discount codes to military personnel and veterans as a way to show appreciation for their service and attract their loyalty.
If you have international transactions, you can customize discount codes for specific regions or countries. You can offer a special discount code to customers in Canada during a Canada-specific holiday to attract Canadian customers and increase sales in that area. You can do the same for customers in other countries.
One example of a company that uses the strategy of creating customized discounts is Nike. Nike offers customized discounts to specific customer groups such as students and members of their loyalty program. They also have a 10% military discount that can be used online and in-store.
Another example is Amazon, they offer customized discounts to specific customer groups such as prime members and customers with a specific product in their shopping cart. They also offer customized discounts to specific regions and countries, for example, during a specific holiday or event like Black Friday or Cyber Monday.
You can use complex discount codes to attribute commissions to your sales representatives. By assigning unique codes to each rep, you can better track which sales are being attributed to them and pay commissions accordingly.
For example, you can create a parent code such as "SALESREP" and then generate unique subcodes for each sales representative, such as "SALESREP-JOHN" and "SALESREP-MARY". When a customer uses the representative's unique code at checkout, the sale can be attributed to that representative and they will earn a commission on the sale.
Car dealerships and real estate agencies often use this strategy to incentivize their representatives and brokers to convince more customers to transact with them.
This can also work similarly to referral discounts — except the referrer is your sales representative. If the customer uses their referral code, the sale will be attributed to the representative, and they’ll earn a commission.
It is important to note that the business should have a clear system in place to track the use of these codes and attribute commissions accordingly. Additionally, clear communication should be provided to the sales representatives regarding the rules and guidelines of the commission system, and how the codes work.
One example is Avon, an American multinational company that sells beauty, household, and personal care products. Their Avon Rep Discount offers various discounts across a variety of products. Avon representatives also get varying levels of commissions depending on their annual sales.
DepositFix is a HubSpot payment integration software that also offers complex discount code features.
Creating discount codes on DepositFix is a breeze. If you’re using the DepositFix app, simply go to the main dashboard and click Discounts.
Go to the Create Discount page and fill out the required information, including:
Once you’ve filled out all the necessary information, click Save. Remember that you should check Accept Discount Codes when creating payment forms on DepositFix.
From there, all you have to do is copy the generated code to your landing page. Your customers can enter the code in the discount code field of your payment form.
DepositFix’s dynamic discount code features allow users to create discount codes automatically. This works amazingly well if you want to generate discount codes and share them with customers one at a time. You can generate and give away discount codes as part of a campaign or after a specific purchase.
Since everything is automated and DepositFix is integrated with HubSpot, tracking, monitoring, and recording payments is a lot easier.
DepositFix requires you to create a folder — called the master discount folder — which will contain the discount codes you generate. Toggling dynamic discounts on the DepositFix app lets you customize the discount code by setting up a unique name and prefix, which will be used automatically in all subsequent discount codes.