Coupon Code Strategy Ramblings

We run a ton of sales. Just check the Detailed Image home page at any given time you’ll always find a daily special, weekly free item if you spend $x, and products on sale for monthly special. There’s also a good chance we’re running a big site-wide promo, such as free or flat-rate shipping, a brand or category of products on sale, a percentage off of everything on the site, buy product x get product y for free, or some combination of those things. At any given time we’re also running countless promos behind the scenes for various segments of our users/visitors (say, if you purchased a product in the last six months we might send you a special offer on a related product).

All of this works without us losing money because we really have only two ways that you can get a discount:

  • You buy a product is on sale for everyone. These can be seen on our sale page at any time, and include our daily and monthly specials.  These products are discounted using formulas that take into account our COGS so that we never lose money on a sale product.
  • You use a coupon code, which involves infinite possible combinations of product discounts, free products, and shipping discounts.

There are a few other factors like gift certificates and account credit, but for the most part that’s it.

Given that we don’t ever lose money on a sale product, the key to our entire sales philosophy lies within our coupon code system.  We’re able to run an unlimited number of sales concurrently without fear of losing money because we only allow one coupon code per order.

Each code is designed to give one advantage without another. For instance, a free shipping code with a min spend of $50 might not give any other discount so we make full profit on every product in the order.  Or if we give a free $20 product away when you spend $70, we realize that you’ll be paying full price for shipping, full price for your other products, and that our cost on that $20 product is far less than $20.  For the weekly special. the formula is completely automated to do exactly what I just described.

With all of that said, no matter how often we mention “one coupon code per order”, we get countless comments/questions from people who are “unable to use a coupon code” and it turns out they are just trying to use two codes.

We originally did a poor job communicating this. Our initial plan was to just try stating it more clearly with our promotions.  We also added some text saying “Limit one per order” to the confirmation message that you see when you enter a code:

Detailed Image Coupon Form - Before

Unfortunately, neither of those really did anything.  It’s not that we necessarily blame people for trying – some places do allow multiple coupon codes – but we want to be as clear as possible up front, plus there’s also no point in us fielding questions about it.  We had to come up with a better way without over-complicating the checkout process or turning people off.

Last night we unveiled a new checkout system.  Most of the improvements were behind the scenes, but one thing that is new on the checkout page itself is what you see when you enter a coupon code:

Detailed Image Coupon Form - After

You now have to click to change your coupon code. We hope that the simple act of having to read and click that link will reduce the questions.

Will that help? We think so, but only time will tell.  What I love about it is that it’s subtle and definitely doesn’t deter you from using a coupon code.  I often see articles about “the promo code problem“.  It’s not a problem for us. We want our customers using coupons and getting good deals, and maybe more importantly feeling like they got good deals. It’s part of our business model.  Go ahead and Google “Detailed Image Coupon Code”. You’ll see our coupon code page where we tell you how to get coupons, our Twitter and Facebook accounts where we give away exclusive coupons, forums where we post coupons, and a few coupon code sites where we’ve made sure we signed up and added coupon codes.

While no promotional strategy is without it’s faults, the way we’ve combined  sale products with coupon codes gives our customers the option to pick and chose the types of deals that they like best, be it free product or free shipping or just a flat discount on anything we sell.  We’ve come to learn that different consumers like different types of discounts, and that for the most part the different camps are pretty equally divided.  I think a lot of companies spend an awful lot of time and money quantifying whether free shipping is more popular than 15% off or a free gift.  From our data and our experience,  you’re better off finding a way to offer all of the above and letting the consumer decide which they value more.

11 comments on Coupon Code Strategy Ramblings

  1. Rob says:

    Some good thoughts here.

    We’ve recently implemented a coupon code system for our portrait photos site, and haven’t really had that many come through yet. However, knowing my own shopping habits and reading through the getelastic articles (can’t believe I haven’t come across that site before) it seems that it’s a more complicated issue than I’d initially thought.

    Do you know how many abandoned carts you have? I often go and look for a coupon during the checkout process, and me skipping off to google has huge potential for the retailer to lose the sale due to distraction / finding a better deal with a competitor etc.

    I like the change of text on the coupon entry area – hopefully that should make it clearer to the users that they may only use one coupon per order. I’ve seen a similar thing on other sites, “use a different coupon instead”, “Clear this coupon and use another” so it is something that is clearly a problem. For a small team getting rid of the pointless phonecalls/emails about these issues is another step in the right direction.

    I presume with your cart it’s possible to get the weekly special (as I seem to recall that doesn’t require a code) and use a code?

    Do you pay affiliates a different rate if a customer uses a coupon code?

    Do you think you generally use coupon codes more to encourage people to purchase who might not otherwise, or more to increase spends (free shipping thresholds etc.)

    Ages ago you said that working out a formula for free shipping was difficult, as the value-per-unit-volume / mass of your products varied wildly – from super expensive waxes to much cheaper liquids. Did you work out a way around this?

    Also, is shipping taxable in NY? it is here, so the generally accepted norm is to put the tax after the shipping when presenting the subtotals and totals. If it’s not taxable then the way you’ve got it already makes more sense.

    • Adam McFarland says:

      Good questions Rob -

      We do have access to abandoned cart data, although we haven’t done a ton with it. The hard part for us is segmenting it based upon the sales currently running, changes on the website, and all of the other variables to see what is really causing what. It will be worth evaluating this change I think though – the next month or two before the holidays will be relatively slow with less crazy sales so it’s a good time for that. (side note – I know we previously discussed following up with people who abandoned their carts, something I think we’ll try to implement in 2011).

      Thanks for the other suggestions on the text – I really like “Clear this coupon and use another”, I could see us trying other ones like that if this doesn’t work.

      The Weekly Special actually is a coupon code, which is part of the reason that this has increased in volume. It does say it on the homepage next to the special, but from the customer’s standpoint they want the free item AND another coupon that they have. Understandable from their perspective, but we’re only giving the product away knowing that we are making money on the rest of the order.

      We do not pay affiliates any differently. They get paid the same regardless of what the customer pays.

      I think we use coupons for both purposes pretty equally – to increase spends and to initiate a purchase. One of those things where both seem to work pretty well.

      We haven’t really found a way around the free shipping issue, other than to only offer it for limited time periods. The majority of the time we try to actually charge based upon weight. I think always offering “free shipping over $99″ or something would be a bad idea given a $40 order can weigh 20 lbs and a $200 order can weigh 1 lb.

      Good question on the shipping. NYS is a small % of our orders…I’ll have to bring it up at our next meeting, probably a question for our accountant given that my googling about it just confused me :) George handles paying the NYS sales tax so I’m sure he’ll have some insight too. I’d like to say that we’ve thought it through previously, and we may have, but if we did it was year’s ago and I can’t remember.

      Update – I decided to look at a few retailers that I purchased from to see how they charged me tax…and it was 50/50. Definitely a question for the accountant.

      • Adam McFarland says:

        A quick update – Rob was correct. We spoke about the tax situation at our meeting. As a group we thought we probably were doing it right by not taxing it, but we asked our accountant and he said that in NYS you do have to charge tax on shipping. We have now changed the site now to reflect that. Thank You Rob!

  2. Neville says:

    I wonder if “Click here to change” will confuse some people (it confused me for a split second…and I’m on the net 8 hours a day).

    Maybe “Use a different coupon” might be better if this actually confuses anyone (I presume you’ll get a call about it soon if it’s confusing).

    I never realized you did so many sales….I’ve only recently started doing them and they work great!

    • Adam McFarland says:

      Nev – yes, if it confuses customers we will hear about it and we will adjust the text accordingly. It may or may not be less confusing if you actually apply the code and see the coupon field replaced with that text. At this point I’ve looked at it so many times that I’m cross eyed lol. With stuff like this if we get even a few inquires we jump on it and tweak it until we get it right. The goal after all was to reduce/eliminate confusion.

  3. Rob says:

    I’ve just had a thought about abandoned carts… (might be something you don’t want to do)

    You can bring a box up when someone tries to close the tab – which could ask for abandonment information. Perhaps keep it down to two option – “I was just looking” / “I found a better deal elsewhere” / “I’ll be back later” or something like that. Your regular users who check out in one go will never see the message, just those that try to leave with things in the cart.

    As for the Q about the weekly special, of course I meant the daily special. That’s compatible with coupon codes, right?

    If I google “detailed image coupon codes” you come up second, after retailmenot. One of the things getelastic talked about was people googling for coupon codes then finding them via an affiliate, who got commission even though they weren’t actually responsible for the sale. The way they suggested avoiding this was creating a page SEO’d for yourname+coupon codes etc. Do you pay retailmenot commission? Might it be worth SEOing your coupon codes for some of these terms to get it to come at the top of the search? http://www.detailedimage.com/Coupon-Codes/ doesn’t seem to even come on page 1 for “detailed image coupon codes” which is odd…

    Yeah, the free shipping conundrum…. it would probably confuse the crap out of the customer to have an offer like “free shipping on all orders over $99 but under 99lbs”. Or am I underestimating their intelligence?

    • Adam McFarland says:

      I’m not a huge fan of those abandonment boxes, but I have thought about them for both DI and LP. It is a fine line, especially for DI. I know I sometimes abandon my cart a few different times before making a big online purchase. My laptop I probably added to cart 20 times over the course of a few weeks. If I got 20 pop-ups I would be turned off. You’d have to use a cookie to track it all…plus in theory you’d want to show it on the last abandonment and not the first one, which is impossible to tell. I’d like to see how other people execute it.

      We did add the code on retailmenot ourselves (it’s the one in the screenshot). And we did create that page in hopes of ranking high for it. This tool lets you see the results from different data centers for a query http://www.iwebtool.com/google_datacenter_search?search=detailed+image+coupon+codes&page=1&searchop=full&res=1&results=1 It looks like our page comes up #3 across the board. Possibly your user history and/or location influenced the rankings. Either way, I’d prefer it to be #1 :)

      And I agree, I think customers would be very confused if we added weight into the equation. Plus we’d then have to publish the weights on the site for people to see…just seems like a potential recipe for disaster.

      Oh, and yes, you are correct, the Daily Special is just treated as a sale item so it can be combined with any valid coupon code.

  4. [...] mentioned on a few different occasions that offering free shipping all of the time, say for orders over $100 or $200 doesn’t work [...]

  5. [...] Revamp DI Checkout process [...]

  6. [...] year on a post about our coupon code and sales strategy, Rob noticed from a screenshot of our checkout page that we weren’t charging sales tax on [...]

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