Coupons (discount codes) are personalised or publicly released codes offered to customers as a purchasing incentive that reduces the price of your plans. Coupons can be an effective means to attract new and encourage regular customers.
There are two types of TGmembership coupons - percentage discount or fixed value discount.
- Using a percentage discount, your customers can reduce the cost of your plans by up to 99%.
- A fixed value discount allows you to create a coupon that, for example, reduces the price by 10 units. The currency is inherited from the selected plan. For example, if your plan costs €50, a fixed value discount will be €10. If the plan is $50, the discount will be $10. This is important to consider for those of you who use several different currencies in parallel.
Limit the validity of your coupons
1. Time frame - You can set an end date for the validity of your coupons. After this date, they will be automatically deactivated. This option is suitable for promotions like "-20% of the price of all plans until the end of the month".
2. Number of uses - you can limit the number of uses for your coupons. This option is suitable for promotions such as "The first 10 subscribers can take advantage of a 20% discount".
Both of the above options can be used for one coupon.
Set a minimum / maximum order amount
TGmembership allows you to limit the use of a particular coupon based on the amount of the order. For example, if you have a coupon for a €10 discount, you wouldn't want it to be usable with a plan that costs €5, would you? Or, if the coupon is for a 50% discount, you probably wouldn't want it to be compatible with your most expensive plans.
When creating your coupons, you have the option to set a minimum and maximum amount when that coupon can be applied.
In his book, "Contagious: Why Things Catch On", marketing professor Jonah Berger, explains how our understanding of discounts is affected by our perception of numbers. He calls this theory "The rule of 100".
Imagine that you own a clothing store. A particular line of T-shirts has a regular price of €20, but you want to put them on sale for €15. There are two ways to promote this. One is in percentages - A discount from €20 to €15 is 25%. You can also use an absolute number - €5 off. Which of these two is the better choice?
Although both are mathematically equal, they feel different psychologically. It turns out that customers find a discount of 25% more attractive. Does this mean that the percentage discount is always preferable? Not quite. Let's take the same situation, but increase the amounts. Instead of a € 20 T-shirt, get a € 2000 laptop. Both 25% or € 500 will reduce its price to € 1500. The price is the same, but the discount feels different for your customers - they are more likely to place an order using the fixed value discount.
The rule of 100 says that for prices up to 100, a percentage discount seems more than a fixed value. But over 100, things reverse. Over 100, absolute discounts seem larger than percentage ones.
Another old trick used in creating promotional campaigns is to increase the difference between the regular and the discounted price. Let's say the price of your product is €150. Your customers would be more willing to pay this amount if they believe that the price before the discount was €300 instead of €200 for example. The price they will pay is the same, but the increased difference between the regular and the discounted price gives them the feeling of a better deal.
You probably already know and use many of these tricks and you have felt the difference. The most common example is the so-called "Charm Pricing", where all prices end at .99. For example, €29.99 instead of €30. Psychologically, this creates a feeling in your customers that the product is much cheaper even though it is just 0.01.
Next time you plan your pricing plans, think carefully about what they should look like. The way you present your prices can have a big impact on your sales, and the psychological pricing can help you get the most out of them.