What Are Promo Codes and How Do They Work?
What Are Promo Codes?
In the world of online shopping, promo codes are like digital keys that unlock exclusive savings. Also known as coupon codes or discount codes, they're combinations of letters, numbers, or both, offered to shoppers.
How Do Promo Codes Work?
When supporters enter these codes during checkout, they trigger discounts, special deals, or other enticing perks. Promo codes are a win-win: shoppers score savings, and businesses attract more attention and boost sales.
Promo codes are great for tracking marketing efforts. They are tied to specific campaigns or channels, and provide measurable insights. By analyzing code usage, redemption rates, and associated purchases, businesses can gauge campaign success and customer behavior. They help determine the most effective offers, while also offering a clear Return on Investment (ROI) evaluation.
Promo codes work because they build a relationship between businesses and customers. Businesses showcase their generosity and appreciation, while customers are happy to be receiving a discount. It's a win-win scenario.
Categories of Promo Codes
There are three general categories of promo codes:
- Private Codes: Custom codes for specific groups of customers, shared privately. These can create an exclusive feel and reward loyalty. (Ex. A loyal customer receives a personalized code via email, giving them 25% off on their next purchase as a thank-you for their ongoing support.)
- Restricted Codes: Promo codes with conditions - like minimum purchases, or discounts on specific products. (Ex. A promo code offers $15 off, but only if the customer spends $50 or more in the "Summer Collection" category.)
- Public Codes: Widely available codes shared through public marketing channels, especially on social media. These codes attract new customers, create buzz, and encourage broad usage without specific qualifications. (Ex. A code is shared on social media, providing all customers with a 10% discount during a weekend flash sale on the entire online store. With some e-commerce platforms, like Fourthwall, you can either have supporters enter these codes manually, or have the discount automatically applied during the checkout process.)
How + When to Use Promo Codes
Creators can use promo codes to enhance their online presence and engagement. can find ways to use promo codes whenever they want to, but here are some of our top situations in which promo codes are most effective:
- Boosting Sales: Creators can offer limited-time promo codes to their audience to generate excitement about new products and drive initial adoption during a launch.
- Rewarding Supporters: Creators can use promo codes to reward long-standing supporters, reinforcing loyalty and showing appreciation for their ongoing engagement.
- Offering Subscriber Benefits: Creators can use codes as perks for subscribers, offering exclusive discounts or content to their paid members, enhancing the value of their memberships.
- Increasing Social Media Engagement: Running contests or giveaways with promo codes as prizes on social media platforms can boost engagement and attract new followers.
- Encouraging Event Participation: Promo codes can be used to encourage attendance at virtual events or webinars, offering discounts to those who register early.
- Launching New Products: When introducing new products or services, creators can use promo codes to entice customers to explore and purchase, creating buzz around the launch.
- During Seasonal Campaigns: During holidays or special occasions, like Black Friday, offering limited-time promo codes can tap into the festive spirit and drive increased sales.
- Acquiring New Members: Promo codes can attract new members to paid subscriptions or memberships, offering them an initial discount to encourage sign-ups.
- Re-Engaging: During periods of lower activity, like off-peak seasons, creators can use promo codes to re-engage customers and drive sales.
- Collaborating: When collaborating with other creators or brands, promo codes can be used as cross-promotional tools, introducing new audiences to their offerings.
- Requesting Feedback and Reviews: Offering codes to customers who provide feedback or leave reviews can help gather valuable insights and also boost sales.
3 Tips for Implementing a Promo Code Strategy
If you’re interested in introducing a promo code strategy to your online business, there are a few things to consider.
- Segmentation is Key: Tailor promo codes to different audience segments, such as new customers, loyal supporters, Instagram followers, US buyers, etc. This ensures relevance and increases the likelihood of purchases. You should try to customize your codes to suit each segment.
- Urgency and Scarcity: Creating a sense of urgency by setting expiration dates or offering limited quantities for promo codes is an exceptional way to increase revenue. When building out your strategy, consider how you can make your discounts limited-time and/or conditional.
- Track and Analyze: Be sure to track how well each promo code is doing. This data helps refine strategies, focusing on what works best for driving engagement and sales.
Fourthwall Promo Codes
It might sound counterintuitive, but giving your fans discounts on their favorite merch will help you profit in the long run. We know you work hard to build your store and your brand, but we also know how much people love to get something for less than its original price – which is why Fourthwall currently offers four flavors of promo codes:
- Percentage Off
- Amount Off
- Free Shipping
- Giveaway Links
But when it comes to promo codes, not every type of discount works the same way — and each promo code can trip up you, your sales and your fans if not used correctly.
When Should I Use Each Promo Code?
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Free Shipping
How to use: Everybody loves free shipping (no, really), and free shipping is a great promo code to offer if your fans are U.S. based where shipping is more affordable. With Fourthwall, you can offer free shipping codes or free shipping on specific products.
How NOT to use: Shipping overseas is expensive, so be sure to consider where your audience is. While shipping is free for your customers when this promo code is applied, it’s not actually free shipping — that is, someone has to pay for it on the backend, and that ends up being the creator. Which is a lot to be on the hook for if your fans are all in Australia, for example. This may not be the best promo code for you if you’d be paying for international shipping.
Percentage Off
How to use: When activated over a certain amount (like, say 15 percent off $100 or more), the Percentage Off promo code is a great tool to boost cart sizes, because customers will add additional products to their carts to reach the minimum needed to get the discount.
How NOT to use: If you offer a blanket percentage discount no matter the dollar amount of the cart, you can quickly eat into your profit margins, and that can erase any gains you’ve made by offering the promo in the first place. Don’t do that!
Amount Off
How to use: The ‘amount off’ promo code can be offered in limited quantities, which can be really useful when you’re promoting on social media and you want to drive up urgency. For example, maybe it’s only available for the first 1,000 orders, causing your fans to want to rush to your website to buy your stuff in hopes that they’ll be among the first to receive your new merch (and, naturally, a price reduction), driving higher order sizes and more of them.
How NOT to use: You don’t want to use this code to boost sales AFTER a drop has been started (or Percentage Off either, for that matter). This might result in some angry fans who were too early to receive the discount when they bought your new merch on Day 1. Remember: Loyalty is everything, so don’t mistakenly punish your fans for it!
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Giveaway Links
How to use: Giveaway links are great for rewarding specific supporters with products from your shop for free. You generate the giveaway link from your dashboard, and they redeem it by pasting it into their browser and entering their sizes and address. You can track how many links you’ve created, and which ones have been used.
How NOT to use: These aren’t great if you’re trying to offer discounts to lots of your supporters at once. If that’s the case, you’d be better off generating a unique ‘amount off’ promo code. This is also not the way to go if you’re looking to make money off of these sales, because you’ll be paying for all of these products, plus shipping, on your own.
Combining Multiple Promotion Types
Fourthwall allows you to combine your promo codes. Our promo code offers got an upgrade in May 2023 to allow the combination of a ‘percentage off’ plus ‘free shipping’ discounts.
Wrapping Up
Whether it's discounts, deals, or perks, promo codes are great for connecting creators and supporters. Want to put these strategies into action? Sign up for Fourthwall today to try out promo codes and boost engagement with your followers.
