Are coupon codes a sign of desperation?

LampNetworks said:
Promos in the traditional sense used to be offers that happened 2 or 3 times a year.
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These numbers seem arbitrarily chosen. I'm not familiar with a traditional sense that had limited promos to offers that happened 2 or 3 times a year...

In the hosting world, promos appear to be a permanence with the coupon code.

There are coupon codes of 70% and 80% off for life! Does this mean that the client is otherwise overcharged by this amount?

I understand the concept of sales but in the hosting world, I see an air of desperation.
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Promos and coupons are not necessarily a sign of desperation. Depending on the context at play, I would imagine they can just as easily be a sign of strategic innovation.
 
Who doesn't like DISCOUNTS ?

I know few people who purchase something (even if they don't need it), just because there are discounts and they feel they got a good deal.
 
visiba said:
Hmm, I don't think you get the point of the OP. We all understand that coupons / promotions are a way to attract customers. This topic is about the insane coupon codes of 70/80% off and the question if such discounts are rather a sign of desperation instead of normal operations.
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Web hosting is recurring business. You give 1 month free or 80% off and you potentially have a client for years to come paying the full package price.

nigelb said:
You need to think what are the motives for the coupon, could be;
1. They over charge to offer a discount
2. Have spare capacity they want to fill quickly
3. they want to do a land grab, part of exit plan.

Its all down to each business, if they over use it customers become immune, the bottom line is what it costs and is it value.
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4. Sales. Have the budget to be able to justify such a promotion? Like mentioned above it is a way to bring in customers for potentially years to come so the large discounts on the first month is a loss maker, but after the first month or 2 that client becomes profitable.
 
It's all relative.

If it's a coupon like 99% off lifetime, then it's definitely a form of red flag.

But it's very common to see a significant discount on the first month, or an incentive to purchase on a yearly or bi-yearly basis.
 
LampNetworks said:
Promos in the traditional sense used to be offers that happened 2 or 3 times a year. In the hosting world, promos appear to be a permanence with the coupon code.

There are coupon codes of 70% and 80% off for life! Does this mean that the client is otherwise overcharged by this amount?

I understand the concept of sales but in the hosting world, I see an air of desperation. Some hosts advertise the same ad in scores of forums offering say 50% discount, week after week, month after month. I can't imagine savvy clients falling for it, so why do so many hosts do it?
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Hi there,
Promo codes are meant to bring new customers. New customers looking for a new service. After making a research and write on the list 3 providers, maybe the promo code is the only one that makes the difference. We all love discounts. Think about the women, they don't need that yellow pair of shoes but they couldn't resist buying them because they were on sale, with 50% discount :)
 
@LampNetworks. Coupon Codes do not break UK consumer law at the item is ALWAYS on sale at full price without a coupon.

This is NOT a sale, it's a money off coupon, like 5p of a litre of Milk with this coupon.

So "starter hosting, 55% off with coupon code RIPU0FF55" is exempt from this law, but "starter hosting now £4.50, usually £10" (no coupon) would fall under the same rules the supermarkets have to abide by.

We don't offer such huge discounts, but do offer 25% off to people in forums. We find that most the time, but not always, people from forums are a little more savvy and don't need as much hand holding.
 
discounts/promos/BOGOF are a thing of the times and the public expect these now.

I can give you a prime example of using the word FREE. In my offline business i sell toys. a few years back i got a good deal on a bulk supply of kids fishing nets, that i was selling for 50p each, these were selling but slowly ( never expected them to be a fast seller) near the end of the season i changed the pricing to £1 each or Buy 1 Get 1 Free and guess what i sold 2 gross within 1 month ( only working weekends) so i guess the word FREE was the attraction.
 
Agreed it's part of the industry, most potential clients expect a discount or an incentive to sign up, some if not all of the biggest hosting companies have multiple discount codes running at all times, it works.
 
Desperation... NO. Clever Move? Yes can be! I think these days people expect some kind of 'special deal' or 'promotion' when trying new service. Coupons can be a good thing to attract people who wouldn’t have purchased from you otherwise. If you give coupon codes to people who would have already become your customers, then you’re basically giving away money.
 
I dont think its a desperate attempt.. The idea is to build a strong client base. Looking at the rise in number of hosting companies, offering discounts is probably the easiest way to market your hosting company and fight competition in this business.
 
Today promotion of products and services is a tough job for web hosting companies, as there are thousands and thousands of companies available in the market and everyone is waving their hands to grab the attention of potential customers. If you grab the attention of potential customers towards your products for at least 5 seconds, then it makes the chances that somebody will consider your services and I think coupon codes is the best option. And in marketing field Coupons are the lean and clean way to measure ROI on the advertisement campaigns as well.
 
In online marketing world company's don't miss any chance to attract visitors and turn them into conversions. Offering discounts is a part of it. Many company's offer promocodes in special day to attract more customers. My advice to every one is to read the conditions for the particular promocode
 
Something more than 50% off, especially for life, seems like a desperate marketing trick. At that point a company is playing games with customers.

But a coupon code by itself has nothing wrong with it, everyone loves coupons!
 
HostLeet said:
A sign of desperation or genius marketing?:idea:

Well, it all depends...

Have you ever seen a store with a sign that reads "Going out of Business!" or "Liquidation Sale!"? And yet, the store remains open and with the sign up for years, and selling more than ever... I sure have. Any savvy sales person knows that we humans simply can not pass up a good deal. :D We love the idea of knowing (or thinking) that we are getting something for cheaper than what it's really worth.

With that logic in mind it is only prudent to run your business with the use of promotions, discounts and special offers to gain a marketing edge over the competition. So long as you do it smart, of course, just as visiba has mentioned above. :thumbup: If your discounts are taking away from your profits, you're doing it wrong!
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I think this post puts it best.

There's a business in the city where I live that has had a "Bankruptcy Sale" going on for years. This was written on a banner placed over the name of the store itself. It's gotten to the point where I started to question whether they legally changed their name to "Bankruptcy Sale" for them to be allowed to continue this for years on end.

People always want to feel as though they are getting a 'deal', and promo codes/coupons seem to give them that impression. I ran promos this year for Black Friday and Cyber Monday, and saw an increase in sales over those 2 days although the discount being offered was minimal. It's just human psychology...
 
Just by adding the word "sale" will increase sales. So can coupons. They are popular everywhere because they work. It's also a great way to track where sales come from. Don't use the same coupon code everywhere...
 
LarsJ said:
Just by adding the word "sale" will increase sales. So can coupons. They are popular everywhere because they work. It's also a great way to track where sales come from. Don't use the same coupon code everywhere...
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Coupons are so easily searchable though -- there are sites everywhere that track coupons, and archive them for searches

What's the benefit of having different coupons in different places, unless it's to see where the traffic is coming from...?
 
TSHosting said:
Coupons are so easily searchable though -- there are sites everywhere that track coupons, and archive them for searches

What's the benefit of having different coupons in different places, unless it's to see where the traffic is coming from...?
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Exactly...
 
i dont think so, i think, its a way to attract a customer, for example:

sign up with a company for a month, and use a promo code, not only if you like there service, you also saved some money, but, you have saved some money to try there service, and if you like it, you will most likely end up staying with them...
 
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