Bring customers back with a plan for discount codes

6 min read
Paul Teitelman

Repeat business is good business, but how do you get your customers to come back? Providing a great product or service is step No. 1, but even that’s not always enough. There is one secret weapon in your eCommerce arsenal that is effective at tempting them to return: the discount code.

The secret to more sales: current customers

One of the big mistakes many eCommerce businesses make is that they devote too much of their marketing budgets to gaining customers while keeping the ones they already have is left on the back burner.

But past customers are more likely to purchase again and easier to convince.

They’re more profitable, and they’re more likely to make purchases during slow seasons. Discount codes are the incentive you need to bring them back.

Facebook Post Featuring Kiddy Drip Discount

The only caveat is that you need a plan. Some small businesses give too much away, and their finances can’t handle the strain. A poorly-designed discount can devalue your brand and hurt your bottom line, but a successful promotion will make more money for your business.

How to create a plan for discount codes

Intentional promotions give you a clear-cut path for success. You should know which products or services are worth discounting, which audiences you’re incentivizing, and how it will affect your finances.

#1 Decide what to discount

A clear policy establishes boundaries for you and your clients. If you want to sell more of a certain product or service, providing a promotional offer can help you make money during a slow season or sell more of a high-margin product.

There’s no need to discount everything.

Some products and services take more time and effort to produce, and you’re more inclined to charge full price. When you decide in advance that you won’t be discounting those products, it’s easier to stick to your plan if someone asks.

#2 Decide who you’re targeting

Are you after new customers or repeat business? The answer will change the way you deliver the codes.

  • Include the code in a follow-up email or newsletter to target past customers.
  • Put a public code on your website to grab new customers’ attention.

Remember, past customers are more likely to return, and an email with a discount code can be the trigger that brings them back today.

#3 Calculate how much you can reduce prices

Next move onto the numbers. How much can you afford to give away?

New businesses can get long-term returns from offering a service at break-even prices.

Consider this if you still need to develop a portfolio of work or good customer reviews that will pay off in the long run.

You also have to choose between a fixed dollar amount and a percentage. Keep your costs in mind and crunch the numbers so they’re covered at least. Always know how much you’re giving away.

#4 Determine how many discounts you can affordBarista Working on Laptop to Set Discount Code

A great offer can bring business through the door, but if you sell too much at a low price, you drain your business’s finances.

Determine the total amount you can give away in discounts throughout the year, and break that number down into each product. Some apps let you limit how many times a discount code gets used.

#5 Keep a budget

Finally, keep track of how much you’re giving away in discounts and make sure you stick to a budget. Mistakes happen, such as making the wrong code public or forgetting to set a limit on them.

Sometimes a promotion can also be unpredictably popular.

Keep track of how much you give away with a spreadsheet, especially if you know you’re selling something at a loss to get more business.

Related: Best budget apps for small business owners

What kind of promotion should you use?

When you first open your business, you need to start building, whether that means:

  • A portfolio of work
  • A client base
  • Repeat customers

A common way to bring in business when you’re setting out is to charge lower prices. This is how you book your first clients or sell your first products. Hopefully, they leave positive reviews, and you start to build your reputation.

It’s very important that you present low introductory prices as a discount.

It’s a fairly standard practice to launch your business with lower prices so that you can establish a good reputation, but once you’ve built a foundation, you need to charge more to become a profitable, sustainable business. When prices go up, you can lose repeat business, unless you billed the reduced rate as a transparent promotion.

Calculate your true pricing before you launch and present lower rates as a discount to incentivize new business.

Losing money or breaking even is only a bad thing if you didn’t do it on purpose.

Specialized discounts

You can offer specialized services aimed at attracting a certain kind of client or potential customers that may still be on the fence about what you have to offer.

For example, you might consider providing shorter sessions or quick, low-effort services that you know will sell out at a discounted rate. Book them back-to-back to optimize your schedule.

Value-added discounts

A value-added discount doesn’t reduce the rate. It adds a product or service on top of what the customer is already getting. You might:

  • Offer free shipping on purchases over a certain amount
  • Throw in a smaller, complementary product with a more valuable one
    Value-added discounts give customers more for their money.

See if your eCommerce app can make discount codes

Man Holding Card Ordering from Website
Discount codes bring current customers back and entice new ones to give you a try.

Many eCommerce apps used by small business owners have their own instructions for creating coupon codes. Check out the instructions on the app you use and see if it allows you to set limits on your discounts.

For example, when you create coupons with WooCommerce you can limit the number of people who can get the offer, such as the first 100 customers. You can also use them to create a variety of coupons for different products or audiences.

Editor’s note: Sold on using WooCommerce? Then you'll need a WordPress website. Just pick a WordPress theme you like and off you go!

Make more from the customers you already have

Discount codes don’t have to hurt your bottom line. A smart promotional strategy should generate more business. Use savings codes to:

  • Build a client base when you first open
  • Generate sales during slow seasons
  • Encourage repeat business

You need a smart plan to apply discount codes intentionally and build your business instead of cutting into your profits. Decide what products and services to discount, which audiences to target and how much to discount. Get business rolling with a smart plan for discount codes.