Should discount codes apply to recurring subscription orders?

17Jun10

Let’s say you sign up for a subscription that automatically renews every month, or maybe every 6 months or a year. While placing the initial order, you enter a discount code for 10% off. Should that same discount apply to each recurring order that follows the original one? There are several ways to handle this:

– Discount automatically applies to every order in the subscription, so you get the benefit of the same discount for all the subsequent orders.

– Discount only applies to the first order, but you can re-enter the discount code prior to each subsequent order if you remember to do so.

– Discount only applies to the first order, and there’s no way to re-enter a discount code — even if it’s a different one — prior to future orders in the subscription.

I can think of arguments for and against each of these approaches, and it’s anyone guess as to which one tends to maximize revenues. But if you’re faced with creating this type of discount policy for your own customer base, keep one thing in mind. Customers who sign up for recurring subscriptions are likely to be some of the most loyal and profitable buyers you’ll encounter. When you put arbitrary rules in place that diminish the value of the subscription features, you might save a few bucks on discount code redemptions — but you’ll probably drive away valuable customers in the process.



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