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Stop Your Discount Codes Leaking Online

Stop Your Discount Codes Leaking Online

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If you already use or are considering the use of promo codes, it's important before setup to have strategies in place to prevent code misuse. Avoid falling into the trap of giving out discounts that lower your margins.

Discounts and promotions have become an increasingly large part of eCommerce — delivering creative solutions to attract, delight and retain customers in an increasingly competitive world. Customers love saving money. Promotions help grab new shoppers, encourage repeat business and build customer loyalty. Mobile campaigns even allow shoppers to use digital coupons on the high street. But if your codes are misused, they can cost you more than they bring in.

The pros and cons of code leakage

On principle, leaked discount codes are potentially problematic. If they are used widely and indiscriminately, they can place a sizeable dent in your profit margins, which in turn can have a constricting effect on your cash flow. 
That said, we need to address the fact that code leakage needn’t necessarily be the end of the world — it can actually be a good thing. It just depends on what your strategic goals are and how your coupon marketing strategy is intended to facilitate them. 

For example, if you’re at the helm of an emerging brand and your sole goal is getting new customers and increasing brand visibility, a viral promotion does some of your marketing work for you. Under different circumstances, however, the outcomes are anything but cheery.  

When discount code leaks really matter

If your aim is to promote brand loyalty or lure back lapsed customers, leaked discount codes and coupons can create problems that can detract from your goals. Leaked codes are not compelling for customer loyalty. It detracts from the sense of uniqueness and exclusivity that these kinds of codes are supposed to represent. After all, this code is supposed to be a gift from you to the customer. And if all and sundry are using them, this can send entirely the wrong message.

Code leakage also limits businesses on the kinds of offers they can deploy. In order to protect their profit margins they may need to significantly reduce special offers and this can detract from their inherent value for the customer. 
What’s more, if your leaked codes get really out of hand you may have to cancel your codes completely and risk alienating the genuine customers for whom they were intended in the first place.

When codes leak, it also makes it very difficult to track outcomes as your analytics will not represent the genuine use that was intended. This can make it extremely difficult to judge a campaign’s efficacy.

Fortunately, businesses are far from powerless when it comes to cracking down on coupon misuse.

Standard methods for discount code control 

If you are concerned about the leaking and misuse of discount codes, there are a multitude of measures which have traditionally been put in place by businesses to insulate themselves from risk. These include:

1. Using set expiry dates or shortening promotional windows

One of the easiest ways to mitigate the risk of misused discount codes is to shorten the window within which the code is valid. This limits the chances of misuse while also proving a useful scarcity marketing tactic that can help motivate prospects and customers who are stuck on the fence.  This can also increase the perceived value of the code. 

The only trouble is that again, shorter promotional windows will place restrictions on the kinds of offers you can present to your customers. And because promotion windows are shorter, you’ll need to generate more codes. If you’re doing this manually, it can prove a huge administrative undertaking.

2. Monitoring code use

A leaked discount code can be nipped in the bud quickly if you’re watching your analytics like a hawk. If you have a clear idea of who is supposed to be using your codes and when and where they’re supposed to be using them, it’s easy to keep track of normal use and spot unexpected use that could point to a leak. 

This means you can quickly and effectively shut down discount code misuse.

3. Planning for discount code misuse

Many brands are only really damaged by voucher code misuse when it catches them unaware. If you plan for it, however, you can also mitigate the risks it represents. 

For example, you might want to stick to offering discounts that you can tolerate a lot of people using. While this means that you generally won’t be able to be as generous as you might like in your discounts, it can add real value when you do decide to reward valued customers with heftier discounts.

Although these options can all be potentially useful, they also all have their own limitations. Unless promo codes are individualised, personal and unique, the possibility of them being misused and devalued is something you’ll always need to plan for. 

The good news is that in the digital age, there are software solutions to help you do this quickly, easily and in large volumes.

Using unique codes and modern software

The right software platform can make it quick and easy to generate unique discount codes. This allows you to give your customers something that they not only want but expect… personalisation! 

Studies show that 79% of consumers are only likely to engage with discounts offered by a brand if they have been tailored to suit their needs, preferences and previous interactions with the business.

With modern software, you can generate, issue and validate a virtually limitless number of discount codes that are absolutely unique with very little manual input required. This allows for extreme customizability without the expenditure of time and effort. 

Because they are unique and designed for single-use, these discount codes are immune from the potential risk of leakage and are inherently more valuable to the recipient because they are intended just for them.

They can be used to welcome a lapsed customer back to the fold, give a loyal customer a special treat on their birthday or mark the anniversary of their first (or most recent) purchase. And with sophisticated automation, you can generate high volumes of these unique codes and distribute them to customers at the times when they are most likely to be used with a bare minimum of effort.

What’s more, this same software makes it easy to track discount codes so that you can see how well they are performing in the field. You can even use their sophisticated analytics features to AB test different codes and see which is most effective, gradually implementing changes that can ensure your codes help you to achieve your goals faster.

Technology can take your discount code strategy to a new level 

Like it or not, technology is changing consumer behaviour forever. Why not reap the rewards of leveraging that technology to make a positive impact on your clientele while also sidestepping the risks that have traditionally prevented discount campaigns from truly hitting their stride?

Using dedicated software to generate unique single-use discount codes can make it effortless and cost-effective to generate the kinds of codes that matter the most to your customers. The combination of automation and customisation can allow you to generate extremely compelling offers that your customers won’t want to miss. And, because they’re completely unique, you’ll never again have to worry about the logistical and financial fallout that might occur if they get leaked. 

While there are numerous ways in which businesses have traditionally limited their risk when discount codes have been misused, these all pale in comparison to this technologically savvy solution. 

If you're looking to build an effective promo codes strategy, then download Uniqodo's free comprehensive guide — that covers topics including the implementation of single-use codes, personalised and targeted codes, the variety of channels to distribute them on, preventing code misuse and targeting shopping cart abandonment.

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Chris Giddins

Chris Giddins

    Chris is the CEO and Co-Founder of Uniqodo, a Coupon Service Provider that allows advertisers to change the way they market and message to their audience using codes. Chris founded Uniqodo in 2014, following 9 years working at the affiliate network, Awin. 

    Using Uniqodo, advertisers can make code redemption a tactical and creative marketing strategy and is now recognised as an important must-have technology provider to sit in every advertiser's marketing technology stack.

    Read more from Chris

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