Why promotional codes are a two way street

No one running a business today can deny that it’s a distinctly tough environment to operate in. Increasing competition, rising overheads, and staff making wage demands. These all add up to put pressure on business owners in virtually every sector.

Even the internet, which has done so much for many businesses, can pose a threat making it even easier for customers or potential customers to shop around. This, alone has got business leaders looking for answers. But one technique that seems to offer a solution for both attracting new customers and retaining existing ones is the use of the promo code.

Promo codes explained

In their simplest form, promo codes are codes that can be entered at the checkout stage of making an online purchase. This then applies a discount or another offer to the purchase.

This can take several forms, from giving a set discount on the purchase price, typically about 10%, to offering free shipping. Even in face-to-face purchases, promo codes can be used. One example would be sending out a mailshot with the code on it, telling the recipient that they can redeem it when they visit the retail outlet or other supplier issuing it. 

How casinos cash in

One sector that has fully embraced the promo code is the world of online casinos. 

The main reason for this is the extreme levels of competition that most operators face and using exclusive codes something that helps them to stand out from the rest.

To see just how prevalent they are, one only has to visit a site like Casino.org which reviews casinos like Betrivers and also publicizes the offers that they have available via promo codes. However, unlike retail promo codes, which offer discounts and other savings, the online casino model dictates a different approach.

In this case, the use of the promo code generally leads to an enhanced joining bonus. This can include an offer to match a player’s initial stake deposit or an increased number of free spins on a slot game. Other types of offers include refunding all or a proportion of a player’s losses for a set period. Do these codes work? Well with so many online casinos relying on them so heavily, we can safely assume that they do.

The benefits for a business

So let’s take a deeper look at the sorts of benefits that promo codes have for business.

The first one is that they can attract new customers, especially ones who may be looking for a good deal.

In turn, this is going to increase revenue as well as build up a customer base, something that can be vital for a business going through a slow or difficult period. Because they are codes that need to be quoted to be claimed, this makes tracking and data collection easy. They also allow a business to compare which one of the different offers looks like the most effective.

We also shouldn’t overlook the role that they have in building brand loyalty. By strategic use of codes being offered to existing customers, will help to retain them. And, given the higher costs of getting new customers compared with holding on to existing ones, this is an obvious advantage.

Benefits for customers

From the customer's perspective, promo codes are also a very good idea. Firstly, they add value by offering savings on the things or services that they want to buy which they might otherwise think are too expensive. 

Then there’s the feeling of exclusivity and privilege that being offered a promo code can bring. And that’s also going to reflect very well on the business that’s making the offer.

Where there’s a new product or service being offered a promo code can be just the catalyst needed to encourage trial and, finally, there’s no doubt that they do indeed encourage brand loyalty.

A Caveat or two

However, like most offers, the promo code does have the potential to cause issues if not used cautiously. The first of these is that a business can find itself offering too generous a discount in order to get business. They can also become well known for their promo codes, locking them in forever to use them.

The proliferation of sites that gather together codes can also mean that all of a business’s attempts to carefully target customers go out of the window. They can also generate high levels of not-very profitable business. When it comes to brand loyalty there is the additional risk that even loyal customers may start to expect every purchase to come with a promo code, something that may well lead to them leaving when they suddenly have to pay full price.

That said, any business that is aware of these dangers and adapts its promo code strategy to avoid them should be able to look forward to success – and a very happy customer base.