‍Coupon Code Definition

A coupon (also promo code or voucher) is a single code that represents a discount. In the online shopping context, a coupon code is a string of computer-generated letters and numbers that a customer can enter at the checkout to receive a discount or another effect (e.g., free shipping or a bonus item).

Coupons can take various forms – they can be public codes for a broad target group or personalized, unique coupon codes assigned to specific customers. They can be distributed online or offline in many forms (code, barcode, QR). They can be used in both B2B and B2C marketing. Moreover, coupons can be personalized or carry specific conditions. Coupons can be a very versatile marketing tool used effectively throughout the customer journey. 

Currently, coupon codes can take a digital, paper, or mixed format. As more customers expect digital coupons, traditional retailers who don’t deliver on that expectation, run a huge risk of losing customers. As highlighted by the COVID-19 crisis, the digitization of the retail landscape is inevitable. That does not mean that you cannot apply paper coupons in your funnel, but that digital coupons are simply a must, especially if your target group is tech-savvy. If you run a brick-and-mortar business, you can offer both or even better, make coupons available omnichannel and redeemable both offline and online, including email or your website.

A coupon code can carry the following information:

• Discount value and effect – e.g., the -10% applied to the cheapest order item. 
• Activity timeframe – e.g., the code is valid only for a week since its reception.
• Code pattern – e.g., code can follow a specific or random character pattern. 
• QR and/or barcode – e.g., to allow mobile redemptions, the code can carry a corresponding QR code. 
• Limits – e.g., a coupon code can be open-for-all with no usage restrictions or carry a granular set of rules that customers must meet in order to use them. 

What are the benefits of using coupon codes?

• Achieve sales goals faster – coupons can be used as incentives for customers to perform specific actions that help in achieving sales objectives. 
• Grow customer base – coupons do not only impact the loyalty of your customers but also increase the likelihood that they will refer your brand to friends and family more often.
• Beat the competition – if you find yourself going head to head with other brands, coupon marketing is a great way to make your offers more attractive.
• Track ROI – offering coupon codes makes it easy to measure ROI. When people redeem a coupon code online, you don’t have to ask them how they found your business. You can monitor the number of redeemed coupons to determine the success of your offer.

What are the most common types of coupon codes?

• Free product or upgrade voucher 
• Free shipping voucher
• Amount or percentage discount voucher
• Fixed order or item amount code
• BOGO or bundle promotion voucher
• Mystery voucher 

For more information about coupon codes, check out our Complete Guide.