The One Little Box That’s Costing You Big Dollars

Put your shopper hat on for a minute and imagine you’re on BergdorfGoodman.com looking for the perfect pair of Gianvito Rossi pumps. You get all the way to the checkout page and this is what you see:

Bergdorf Apply Code

What is the first thought that comes into your mind?

If you’re like most people, the coupon code box acts as a trigger that prompts you to search for a coupon. This practice is so common that the second suggestion provided by Google in a search for “bergdorf goodman” is “bergdorf goodman coupon.”

bergdorf google search

There are several reasons why an e-tailer would want to avoid sending a shopper to search for a coupon:

  • Potential affiliate fees
  • The chance the shopper will find a better deal
  • The possibility of training the shopper to expect some sort of discount each time they visit the site

Here are a few alternatives to blatantly and indiscriminately showing a promo box to all visitors who come to your site.

Stay Here!

Macy’s adds a “find one now” URL next to its promo code box. Clicking it opens a new window that lists all of the store’s currently available coupons.

macys promo page

This one tactic has led to incremental sales “far larger than we thought it was going to be,” according to Macys.com president, Kent Anderson.

Lord & Taylor is taking an even bolder approach, clearly emphasizing its promotion directly in the shopping cart.

lord and taylor promo code

Research on discounts and consumer search behavior provides some academic support for this strategy. In this study, when discounts were present, shoppers were found to search for a lower price elsewhere less frequently, regardless of where the discount was offered.

This strategy is likely to increase the percentage of visitors who redeem a promotion. However, for a retailer like Macy’s that is already highly promotional, this can be a net positive decision. By offering an internal link to their own promotions, both affiliate fees and lost sales to visitors who go off-site searching for a coupon are reduced. If you’re highly promotional and have a high checkout/cart abandonment rate, this could be an impactful A/B experiment to test.

Hide and Seek

Linda Bustos from Get Elastic suggests hiding the promo code box from visitors who don’t have a code and selectively showing it to only visitors who have a code. She writes

1. When a customer arrives via an affiliate link or email with a promotion, the URL includes a parameter indicating the shopper has a promo code which is stored in the shopper’s session. When the shopper arrives at the checkout page, the parameter is looked up in the session and the box is displayed. Customer enters promo code manually. All other customers do not see a box.

2. The URL parameter includes the promo code and the discount is automatically applied at checkout. The customer does not need to enter a code, nor does a coupon box need to be displayed.

This strategy can be effective, preventing the coupon code box from triggering a coupon search (since only those who were sent a coupon will be exposed to the box). This allows the e-tailer to get some of the benefits of selectively offering promotions, while mitigating the risk of training visitors to search for a coupon each time they visit the site.

Camouflage Strategy

Net-A-Porter employs a “camouflage strategy” where the promotion code box is subtly hidden behind an expanding element link written in tiny font. The copy reads “Add a gift card or promotion code.” If someone rapidly scans for a box or “PROMO,” they might miss the text altogether. But if someone was sent a promotion code and they actively search for a place to input the code, they probably will find the location without too much additional effort.

net a porter reciprocity

Reciprocity Strategy

OfficeMax leverages the power of reciprocity by offering exclusive coupons while asking for an email opt-in strategically placed in the checkout flow before payment. If the visitor abandons the cart, OfficeMax already has captured the email address for future marketing efforts.

office max promo code

Instead of asking for an email address, this presents an opportunity to leverage reciprocity, as shown above, and increase the order size of the purchase, as shown below.

office max promo codes 2

This example is for the purpose of illustration and is not an actual OfficeMax promotion.

Wrapping It Up

The promo code box has become a trigger to drive visitors away from your site at a critical moment – the very bottom of the funnel. Try A/B testing these different strategies to see if the abandonment rate on your site can be reduced.

Are you implementing another type of coupon code box strategy? Sound off in the comments below!

About the Author: Jonathan Chen is Head of Customer Development at Freshplum, the promotions software that helps e-commerce retailers optimize their promotions. Get more from Chen on the Freshplum blog.

  1. Great article!
    I liked the reciprocity strategy asking for the email before payment. If the customer abandons the cart you still have the customer email. So smart!

  2. I think that by far the best of the options discussed above is the Macys option. If someone has a promo code but cannot find the promo code box (either due to it being hidden in a very tiny font or not being there at all because they happened to directly type in your website instead of knowing they MUST click your long link), they will become frustrated. I think you never want to frustrate customers (or potential customers).

    The Lord & Taylor approach looks good unless you have several relevant offers to show. One advantage to theirs is that you could conceivably show only offers that match what the customer has in their cart. However, you would give up the ability to entice them to add to their order to meet the requirements of a coupon.

    We took the Macy’s approach and think we improved upon it with one of our customers. I covered it in a blog post recently at http://www.websiteoptimizers.com/blog/stop-promo-code-search-leaks-once-and-for-all-to-increase-conversions/

  3. Promo codes on websites are a complex beast indeed. It is a great idea to allow people to use them and find them, but another to randomly lose money for no apparent reason. I guess a little testing is in order to find out what truely works the best.
    Ashley

  4. Offering promo codes at checkout is really smart. Still though, I feel like a lot of people want to search Google themselves to see if there is a code available that may not be listed on site. No?

  5. A really interesting article. While I think the strategy that Macys employees is really clever, I don’t think that it would work for a smaller business where you had much more limited product lines and therefore less concurrent promotions running. Only displaying the promo code box to customers who actually have it is also a great idea. It will be interesting to go back and do some testing now with this in mind and see what happens.

  6. This is great stuff whenever you’re selling something! Thank you!

  7. Allison, agree that a lot of visitors still want to search Google independently for a code, but if you can prevent even a fraction of them from leaving the site before making the purchase you can potentially save on affiliate fees as well as the lost revenue from visitors who never return because they found a code for the same product on a different site.

  8. Tom, great post and nice to see this implemented in the real world. I’d be curious if you had any data on the % of visitors who left site during checkout and returned with a coupon code in the A and B group in your study.

  9. We’ve had many clients run tests around the promotion code box. The most common tactic is some form of camouflage. It’s not so much about hiding the box but about reducing unnecessary distractions. Again, users who have a code will find it and click the expand link and users who don’t have a code will be less likely to worry about it (and the font doesn’t even have to by tiny).

    Great post!

  10. So many different strategies around, and so little information to take the right decision…

    The reason is obviously that you cannot just split test this promo code box and say yes, this is the best strategy for me. Because there’s much more to this tiny box that what you can split test on your online shop alone: Are you using an affiliate system? Are you spreading promo codes on the web, sending them by post with your product catalogue, targeting specific customer segments…? To achieve an optimal customer experience, your promo code box has to be in line with your overall discount strategy and with your customer’s expectations. And you would have to do some kind of split testing of your cross-channel marketing strategy to find out which one performs best – a pity you cannot do it that easy…

    I can only talk about what we’ve learned from our customers, who are using location-based dynamic pricing to target specific cities. The promo code enabled for the visitor’s location directly pops up in the shop, so there’s no googling around. Lots of split testing on different shops have led to the following conclusions:
    - Display promo codes early! Your customers will buy more and more expensive products if they know they’ll get a discount straight away. Don’t let them wait for the checkout page!
    - Display the promo code box early! Once again, distracting customers on the checkout page is the worst thing to do. Entering a promo code should be possible on every page!
    - Use a widget! Display the promo box as a tiny widget you can pull out from the right side of the screen. It is the best camouflage strategy if you want to have a promo code box on every page!

    Hopes this can help!

  11. Great article Garrett!This post is chock full of value.I liked the reciprocity strategy asking for the email before payment. If the customer abandons the cart you still have the customer email. So smart!

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