Saturday, January 26, 2013

The Promotional Code box of death

At one point or another we've all be there. We are staring at our shopping cart checkout page and staring back at us the promotional code box.

Years back I used to think, too bad I don't have a promo code. But now, I better go spend 5 minutes to see if I can find one.  
There are several intentions or KPI's when posting a promo code:

  • To close a deal on a user who needs a little push (conversion)
  • To increase revenue or market share at the expense of margin
  • Convert 1 time users into repeat customers
  • To help calculate elasticity of demand to increase bottom line
  • Bait and Switch tactics with promotional codes can also be used
  • Solve any number of other metric problems
What about the dark side:

  • Throwing away margin and revenue on a 1 time customer who was going to purchase anyway

Wouldn't it be nice to know which type of user is using my promo codes?

Every company that is  using promotional  codes is interested in analytics. Even if they aren't doing it on an advanced level, there is some tracking of the promotional event. Lets look at some of the ways companies have tried to manipulate promotional codes by selectively handing them out., skips the guesswork all together by requiring all buyers attempting to use promotional codes to be signed up to receive email advertisements.  But that only potentially solves 1 aspect, the conversion of 1 time buyers into loyal lifetime customers. You also must login first to enforce usage by only email recipients.


HP would create a pop-up asking you if you wanted to chat with a customer service rep who could hand out promotional codes if you stated you were concerned with the price. This is probably the most targeted use of promo codes.

We can definitely track promotional codes using analytics [5], from basic to advanced.  But how to we get more intelligent data to directly answer the more specific questions above?

Google analytics has a Custom variable specifically for analyzing promotional code usage to get us the data that we would require to do our analytics. Justin Cutroni states on his blog, "Some promotions can be tracked using campaign tracking. I’ve seen lots of people use the utm_content parameter to identify the promotion in a marketing campaign, like an email. But a custom variable works just as well." [1]  

We can track if it came from an email but can we track how long a person sat searching the internet for a promo code while his cart got stale? So far the only answer I can find is to  tracking the actual code itself. Wouldn't it be nice to be able to track the search term used by the user to find your promo code? Maybe someone will post below and tell me how I might do this.

[2]  Accessed on 1/26/2013
[3] Accessed on 1/26/2013.
[4] Accessed on 1/26/2013
[5]   Accessed on 1/26/2013

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