Profit margins can be tight within the travel and tourism industry, and operators must seek out innovative ways to grow brand awareness, boost customer loyalty, and ultimately increase revenue. For tour and activity operators, sightseeing companies, and visitor attractions alike, learning how to effectively use discount codes – also known as promotion codes or coupons – is a reliable way of achieving these goals.
Back in 2022, the global mobile coupon market was valued at $509.7 billion – and it’s projected to reach $1.6 trillion by 2030. So, customers clearly enjoy the ‘value-for-money’ feeling that such price reductions can bring. But it’s important to plan ahead, to maximise the positive long-term impact on your business’s bottom line.
Studies have shown that over 90% of shoppers look for special offers and coupons before buying online. But before committing, operators looking to enhance the impact of their promotions have a number of different strategies to consider.
Targeted segmentation
In a broad sense, segmentation is the process of defining the target audience within your wider customer base. Specifically in the use-case of discount codes, factors to consider include:
- Previous booking behaviour; to encourage referrals, target first-time customers, or reward repeat customers
- Customers’ age or gender; to target specific demographics within your customer base
- Geographic location; to target local or international customers
A tour operator might, for instance, set up a ‘refer a friend’ promotion code to spread news about their tours via word of mouth from happy customers in their region. Or, perhaps, a hop-on hop-off operator may release a discount code to entice sightseeing families at certain times of the year.
Considering seasonality
This means aligning your discount code window with specific travel dates across the year.
A tour operator might time the release of their seasonal discount codes to drum up business ahead of the quieter low-season – to incentivise customers to book. Equally, they might promote reduced rates to help early-booking customers celebrate special events, school holidays, or local festivals – boosting brand loyalty.
Either way, considering seasonality when planning a discount code campaign is a good way to offer value for money when it counts, improve customer satisfaction, and keep revenue coming in throughout the year.
Embracing partnership collaborations
By collaborating with related businesses such as local attractions within their industry, operators can cross-promote their discount codes for the benefit of all.
Imagine, for example, an attraction wants to increase the number of visitors in the low season. They might partner with the local hop-on hop-off sightseeing bus provider to offer a bundle ticket which has a saving for the customer.
Alternatively, they might work with local visitor centre to promote discounts to visitors, while providing a commission to the local visitor centre for encouraging sales.
Creating urgency
Falling under the umbrella of ‘scarcity marketing’ tactics, limited-duration promotion codes create a feeling of urgency among a customer base – as potential buyers seek to make their money go further. By setting an expiry date on your promotion, such as ‘Book by 31st May and save 15% with code SPRING15’, an operator can encourage customers to place their bookings earlier.
How to create effective discount codes
Creating effective discount codes is paramount for giving your online sale or promotion the best chance of success.
- Keep your discount codes succinct, memorable, and – above all – relevant to the promotion you’re running. Complex series of letters and numbers are harder for customers to share or use.
- Decide whether to offer your saving as a fixed amount, or as a percentage of the sale price. A fixed amount code could be: ‘Enjoy £50 off your next purchase with code ExploreLisbon2024’. A percentage discount could be: ‘Save 10% on your ski holiday this spring with code SkiAndSave10’.
- Consider adding a minimum spend to make your promotion code work harder, as customers have to spend more to make the saving. ‘Save £30 on bookings over £300 with code TRAVEL30’, clearly explains the minimum spend required to validate the discount code or coupon.
- Be crystal clear with customers on small print, such as the validity period of your promotion, any exceptions to qualification, and whether multiple codes can be used in tandem. Details such as ‘Offer valid from 1st September to 1st December 2024’ and ‘Cannot be used in conjunction with any other offer’ make the situation clear to potential buyers.
Setting discount code structures
Different code structures will appeal to specific segments of your target market, so it’s important to consider how your codes are designed.
- Personalised, single-use codes are automatically generated as a one-off. They’re unique to each customer, and they can only be redeemed once. They’re designed to encourage customer loyalty by making your customers feel more invested in your business. An example might be a boutique hotel keen to build guest loyalty from the outset; ‘Use code SamanthaJones10 for 10% off your next booking’.
- Multi-use codes are available to any number of different customers. You can set them up to expire after a certain number of uses, after a certain date, or when a target spend has been achieved.
Tracking discount codes’ impact on bookings and reservations
We’ve talked in the past about the importance of Google Analytics for tour operators, and it’s of particular note when considering promotion codes. Without monitoring your code’s usage among your customer base, there’s no way of measuring the success of your promotion.
Functions like eCommerce tracking within Google Analytics allow operators to track the use of their discount codes, with customisable reports offering valuable insight into the data collected.
You can explore key metrics such as:
- Conversion rates – ie, which discount codes have generated the most income?
- User journeys – ie, how have customers landed on your website before placing their booking? Was is via Google ads, social media, or organic search?
- Average order value for purchases made with the discount code.
- Revenue generated.
However you plan and deliver discount codes in your tour promotions, it’s important to take stock of your return on investment when the campaign comes to an end. How many codes were validated and used? Have your efforts boosted brand awareness or customer loyalty? Was there an uptick or downturn in profits? If the latter, was it worth it for the increased exposure? And could it lead to higher turnover in the long term?
Promotion codes work well for companies of all kinds in a huge range of industries. When carefully prepared, timed, and delivered for maximum impact, they could well work for you too.
For more general information on measuring and analysing user metrics, be sure to read our blog on harnessing the power of analytics for tour operators.