7 Myths & Misconceptions About Coupon Codes

Photo by Claudio Schwarz on Unsplash

Coupons can be a brilliant way to bring in new subscribers and one-time gifters. When planned well and executed correctly, these can raise your conversion rate, extend the lifetime value (LTV) of your subscribers, and potentially lower your cost of acquisition in the long run.

However, if you don’t do your research, a new coupon code could also cause a mess of confusion for your subscribers – and your business operations. Remember the old saying about making assumptions? Well, it applies to the sub box industry, too.

Here are a few of the most common myths & misconceptions we’ve seen at Cratejoy about coupon sales for subscription boxes.

1. A Coupon Code Only Applies to a Subscriber’s First Box

Not exactly. But the severity of this misconception ultimately depends on the kind of coupon you decide to create.

If you want to give a certain percentage off your subscriber’s first month, whether that’s a month-to-month or a prepaid subscription, you might see a big difference for your profit margins if you set this up incorrectly!

Let’s take a look at an example. Say you want to offer 15% off a subscriber’s first month with code WELCOME and apply it to all of your terms (month-to-month, 3 months prepaid, 6 months prepaid, and so on). Under the Recurring tab of the coupon creation panel, you select Apply only once. That should do it, right?

Wrong. Because this particular subscriber, a few days later, elects to buy a 6-month prepaid subscription. And that could mean a much bigger discount than perhaps either of you bargained for.

If your month-to-month subscription costs $35, that 15% discount for the first month only (which you intended to total $5.25) turns into a $31.50 discount on a 6-month prepay. Oh dear.

The Solution

There are a couple of solutions here. First, you can go into the Subscription Products tab of the coupon panel and make sure that only the “Month-to-Month” option is checked off.

On the other hand, you could avoid percentage-based coupons altogether and use a flat rate coupon for $5.25 instead – the value of the first month’s discount. This way, when the customer purchases a prepaid subscription for 6 (or even 12) months, the discount will never amount to more than you intend.

Learn more: You can review the process for setting up discount and flat rate coupons with our help doc.

2. Free Shipping Only Applies Once

This is the same principle as the above but in regard to free shipping for the order. When you select “No discount” and “Free shipping,” you open yourself up to having to provide free shipping for the full length of a prepaid subscription.

The Solution

If you’re a brand-new merchant, consider folding the shipping cost into the price of your box. Subscribers won’t know either way, and it will feel to them as if you’re offering “free shipping” every month. If you want to offer a free shipping discount for a subscriber’s first month, set up a coupon code for a flat rate worth the shipping cost.

Additionally, you could set up a free shipping discount to apply only when the order meets a minimum price. This would encourage subscribers to join a higher-priced tier of your subscription box, if you offer multiple box tiers, and increase your average order value (AOV) in general. See the screenshot above for more info!

3. “No Discount” = No Incentive

You might wonder why we offer a coupon option called “No discount” (see screenshot). That’s best for coupon offers that include a free gift or sample added to the subscriber’s order. Setting up a “no discount” coupon allows you to offer and track this kind of incentive.

The Solution

Treat the “no discount” option as if it were any other coupon offer! A free gift has a monetary value just as much as a percentage or flat rate discount.

4. You Can “Schedule” Coupons

By “schedule,” we mean setting up the coupon to go live at a certain date/time so that, at that time, the coupon magically shows up on your Marketplace listing. While the first part is indeed possible, the second part is not.

Setting up a coupon is a two-stage process. In the first stage, you actually create the coupon, with all the limitations and other parameters we’ve already discussed. In the second stage, you decide when the coupon should be available to use and add it to your store listing.

A Note on Activation and Expiration

Why create a coupon with an expiration date? Aside from time-specific sales, like holiday promotions, you might set a coupon to expire for an influencer you’re working with.

For instance, let’s say the influencer has agreed to serve as a temporary affiliate and promote a certain offer code to their network on your behalf. Because their network is so big, your business could be overwhelmed by keeping the coupon live indefinitely – so it makes more sense for your business, and adds more urgency for would-be subscribers to sign up, if the coupon is available for a limited time only.

How to Do It

When you’re creating your coupon, pay attention to the field marked Activation Date (and Expiration Date, if needed) under the Limitations tab.

These dates set the time period during which your customer can use this coupon code. Until the coupon has activated, however, you will not be able to display the coupon on your listing.

The Solution

To make sure the coupon shows up on your listing, you’ll need to select it manually under the Listing page of your seller dashboard. On the first tab of the Listing page, where it says “Basic Info,” scroll to the bottom and select the coupon code you want to display from the “Give shoppers an incentive to subscribe!” drop-down menu.

Here, you can also customize the copy you’ll use to advertise your coupon (e.g. “Save $X with code SUCH&SUCH”).

5. Activation and Expiration Dates Are Set Up for Your Time Zone

Photo by Luis Cortes on Unsplash

Cratejoy merchants come from all over the globe, and as such, the seller dashboard is set to Coordinated Universal Time (UTC) by default. UTC, the regulatory standard for time zone around the world, is measured by the time at the Prime Meridian in Greenwich, England; you might also hear it called GMT (Greenwich Mean Time), though “UTC” is the more modern terminology.

Unless you updated your account to reflect the time zone you’re located in, your account will be in UTC. So if you set up a coupon for a special, time-sensitive sale (like a holiday promotion), your coupon will go live based on UTC time instead of the time where you live.

Let’s use the Black Friday example highlighted above. If your store is in the default time zone, your coupon will activate at 12 AM UTC that Friday – which, if you live in the U.S., means your coupon would actually go live the evening of the previous day. (For example, a business in California – in the Pacific time zone – would have a coupon go live at 4 PM Thursday.)

If you live and work in mainland Europe, Africa, Asia, or Australia, your coupon would activate after midnight Friday in your time zone.

The Solution

To update your time zone from UTC, you’ll need to go into the Settings panel of your merchant dashboard. Under the “General” option, there will be a drop-down menu to select your time zone, set up as “UTC+[number]”:

Keep in mind that time zones anywhere east of the Prime Meridian (that is, largely North and South America) subtract from UTC, while time zones further west (most of Europe, Africa, Asia, and Australia) add onto UTC. In other words:

  • 12 midnight UTC = 7 PM EST on the day before. Because Eastern standard time is five hours behind UTC, you would select “UTC-0005.”
  • 12 midnight UTC = 6 PM CST on the day before, or “UTC-0006.”
  • 12 midnight UTC = 5 PM MST on the day before, or “UTC-0007.”
  • 12 midnight UTC = 4 PM PST on the day before, or “UTC-0008.”

On the other hand, international merchants would select a positive-value time zone. For example, a seller in Athens, Greece – two hours ahead of Greenwich, England – would select “UTC+0002” as their time zone.

6. Tried-and-True Coupon Codes Sell Better

Actually, trying new things attracts customers! Updating your Marketplace listing (including the coupon codes) can really help your conversion rate in the long run.

Why? Many Cratejoy merchants have repeat customers – that is, people who order multiple subscriptions over time – and when those customers see a store listing has been refreshed, it can pique their interest and draw them in more.

The Solution

Review your Marketplace listing frequently! Leaving your Mother’s Day coupon up until June, for example, won’t help your business look professional and convince customers. Relevant coupons bring in more subscribers, as does updated copy and newer photos. If you’re committed to growing your sales, keeping all aspects of your Marketplace listing current is crucial. And coupon codes are part of that.

7. Coupons are Only Good for First-Time Customers

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While discounts are certainly a draw for new subscribers, a well-thought-out coupon can work wonders with current subscribers as well.

Read more: Check out our best practice guide for making the most of your sales discounts!

Keep in mind the differences between a subscription business model (with recurring revenue) and traditional retail (based on one-time purchases). Customer satisfaction is even more important in subscription-based businesses than ordinary retailers because your customers are subscribers. In layman’s terms, the very backbone of your business is their willingness to stay with your box. So retention is key.

The Solution

Here are just a couple ways you might incorporate coupon codes to retain customers:

  • Win back subscribers who recently churned. One of the most common reasons a subscriber churns is box cost. So creating a downgrade option or offering a return discount in your winback email campaign can be useful ways to keep subscribers happy – and coming back month after month.
  • Celebrate customer loyalty. Offering a one-time coupon code for a subscriber’s anniversary – or as a referral reward – can really help with your overall subscriber satisfaction. Happy subscribers are loyal subscribers, and it’s worth celebrating that!

Learn how: Take a look at our help doc to set up a coupon for an existing subscription.

Have you used coupon codes to reward or retain subscribers in the past? Do you have questions about the procedures we’ve outlined here? Feel free to drop our support team a line at support@cratejoy.com and we’ll take a look.

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