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What Are Promotional Codes And How Do They Work?

Do you know that Coca Cola was the first company to use promotional codes?

This happened way back in 1887. The marketing campaign helped the brand establish its name in every state of the USA. The coupons helped Coca Cola become a household name within a decade.

Today, every renowned band is using promotional codes and coupons. In fact, promo codes and discount deals have become an integral part of promotional marketing strategy.

This leads us to the very question that you have been searching for. What exactly are promotional codes and why do brands offer coupons? More importantly, how do they work?

This article will help you understand how you can utilize or get benefits from discount codes. We have covered all the information about Coupon Codes that you want to know.

Table of Contents
  1. 1. What Are Promotional Codes?
  2. 2. What Is An Example Of A Promo Code?
  3. 3. Types of Promotional Codes
    1. 3.1. Public Coupon Codes
    2. 3.2. Private Discount Codes
    3. 3.3. Restricted Coupons
  4. 4. How Promotional Codes Work?
  5. 5. How Do You Get Promotional Codes?
  6. 6. How to Use Promocodes?
  7. 7. Why Coupon Codes Work?
  8. 8. Benefits of Promocodes for Customers
  9. 9. Benefits of Coupons for Retailers
    1. 9.1. Engage New Customers 
    2. 9.2. Boost Seasonal Sales
    3. 9.3. Encourage Customers to Return
    4. 9.4. Reward Loyal Customers
    5. 9.5. Grow Your Marketing List
  10. 10. Get All Promotional Codes and Coupons in One Place
  11. 11. Conclusion

What Are Promotional Codes?

A promotional code is offered by businesses to their customers to get a discount. These discount codes are often alphanumeric (contain a combination of alphabetical and numerical characters). Online stores use promocodes to attract customers to their websites. Buyers get special deals upon redeeming coupons. And E-Commerce stores get new customers.

What Is An Example Of A Promo Code?

A promo code can be alphanumeric or a random number of words. Example: the word “VALENTINE” or “VAL14” can be a promo code for Valentine’s Day.

Most brands now tend to offer promotional codes that are meaningful. These discount codes consist of words that are meaningful and represent what the brand is offering. Example: if a website offers a discount code “Save20%,” you know what it means, right?

Example Of A Promo Code

Types of Promotional Codes

There are a variety of promotional codes floating around on the internet. You can easily find one on your favorite store or on the best coupon code website. However, all coupons can be divided into three basic types of promotional codes.

Public Coupon Codes

As the name refers, public promo codes are for all customers. Anybody can use them to get a discount, but only once. Online stores offer public coupons to encourage new customers and spread brand awareness. These are the most commonly used coupons that markets offer during sales seasons.

Private Discount Codes

These promocodes are meant for targeted users and are aimed at specific users. Private promo codes are offered either as a loyalty token or to encourage them to make another purchase. Most online stores create private coupons for particular bank card-holders.

Private codes can also be sent out to customers who have birthdays during that month. These are also used to engage existing customers who haven’t bought anything for a long time.

Restricted Coupons

Restricted codes are for very specific customers and are often for one-time use. Online stores usually offer restricted coupons as a compensation token. This can be an apology for delivering the wrong order or poor customer service.

How Promotional Codes Work?

The main idea behind promocodes is the same, to offer something cheaper. When customers apply coupon codes they get discounts from the stores. This can be a precise amount or the percentage of the total price. Consumers may also get free gifts or delivery for using the codes.

How Do You Get Promotional Codes?

Online stores and brands use several ways to offer discount codes. Retail stores usually offer promotional codes through SMS, email, or social media. If you are an existing customer, you may get a tailored email with a special discount code.

How to Use Promocodes?

A promocode is used on the cart page or at the checkout stage. You’ll see a box with the message “apply/insert promo code.” You can write or paste the discount code there and click apply. The website will then display the promotional price after calculating the applicable discount.

However, you must know that most promotional codes come with restrictions. To get the maximum discount, you should read them carefully before applying. You must look for:

  • The maximum discount offer
  • The expiration date
  • A minimum amount that you have to spend

Why Coupon Codes Work?

We know that customers get to buy products at reduced prices with coupons. But what benefit do brands get by offering coupons and promocodes?

The answer is simple.

Coupon codes work because customers receive discounts while retailer earns revenue.

Brands, especially online stores can attract and target a new audience with coupons. Promotional codes not only entice new buyers but also help in building customer loyalty. Moreover, brands can promote new products or clear stock at discounted prices.

Benefits of Promocodes for Customers

For consumers, the benefits of promotional codes are not limited to cheaper prices. There is more to it than meets the eye.

  • Customers can get their hands on new products with a little spending.
  • Buyers can try new products or services with promocodes.
  • Shopper can find better deals while searching for discount codes.

Benefits of Coupons for Retailers

Coupons make customers happy and yes, it’s scientifically proven. They may lower the profit margin but help you with brand value and consistent revenue. From a growth strategy point of view, brands can expect the following benefits:

Engage New Customers 

The study shows that 80% of first-time customers bought products because of promotional codes. About two-thirds of shoppers decided to buy after finding the discounted codes. Isn’t these stats astounding? This simply means that offering coupon codes is the best way to expand your market reach.

Boost Seasonal Sales

Competition is often fierce during seasonal sales between online stores. Promotional codes tailored for Back to School, Black Friday, and Christmas season can help brands win more customers and more sales. All you need to do is generate a coupon code and send it to your existing customers.

Encourage Customers to Return

We already have discussed the possibility of getting in touch with existing customers. People tend to buy from websites where they have already made a purchase. Sending coupons to such buyers can encourage them to visit your online store once more. Coupons or discount codes can cause dormant customers to come back.

Reward Loyal Customers

People all love surprises, especially when it comes from their favorite brand. Promotional codes can earn customer loyalty for online stores as they send a personal message. This is a way to let your customers know that you value their loyalty. In return, your brand will get better engagement and customers who will be willing to promote your products.

Grow Your Marketing List

Offering Promocodes is a great way to strengthen your online marketing strategy. At the checkout page, ask customers to provide their emails for newsletters. Thus, you can get emails from new customers to create lists for future campaigns. You can also ask them to follow your social media accounts.

All these will help you build a better brand strategy. On the other hand, discounts will keep the customers engaged with your online store.

Get All Promotional Codes and Coupons in One Place

The best way to find promotional codes is through a coupon website. This way you can grab the best deals from your favorite stores in one place. PannyCanny is one of the best websites to find coupons and promo codes.

At PannyCanny, we have partnered with top stores to offer customers a wide range of discounts. We can help you with:

  • Student Discounts
  • Free Delivery Discounts
  • Seasonal discounts 
  • Bulk or wholesale discounts
  • Cashback discounts


Promotional Codes are part of a marketing strategy that benefits both customers and brands. Customers can buy products or services at reduced prices by applying discount codes. Whereas online stores get to attract a new audience and can engage existing customers by offering deals and coupons. This is a win-win story where promocodes help both buyers and sellers.

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