Rajat Singh
Coupons can bring new people to your business, get current customers more involved, and bring in more money. You can give out physical coupons in your store, or you can offer digital deals through social media posts and marketing messages on your website.
About 60% of people who get a coupon are likely to try a new product, while 46% said they’d change what they were going to buy.
For businesses, coupons can be a good way to bring in more customers, whether they’re meant to get people to visit their physical store or their website. But you should plan ahead when giving freebies to your customers because they can lower your profit per sale even though they bring in more money.
Table of Contents
> Product Promotion: By offering discounts on new products or premium services, coupons encourage customers to explore different, potentially more profitable options within your offerings.
> Customer Retention: Discounts can be a strategic approach to bring previous customers back, enhancing customer loyalty and encouraging repeat visits.
> Financial Considerations: While effective for promotion, the cost of issuing coupons can impact the immediate profitability of sales, necessitating careful financial planning.
> Revenue Impact: A notable challenge is the potential for regular customers to delay purchases while awaiting discounts, which can temporarily affect regular sales revenue before the benefits of the coupon strategy are realized.
Pros of Using Coupons for Business
One good thing about coupons is that they can bring new people to your store or website. Coupons can also help bring out new lines of goods and get rid of old or unwanted stock to make room for newer ones.
You can use coupons to get people to buy a new, more valuable product, which will help you make more money. You can also use coupons to keep customers coming back by giving them discounts as a reward for continuing to buy from your shop.
Email List for Marketing
In the digital world we live in now, one way to get the most out of coupons is to use them to build a social media marketing (SMM) plan. For instance, each customer could be asked to give their email address before getting an offer.
Building an email marketing base over time can help you come up with a long-term marketing plan. You can use this list to get people to buy from you again, tell them about new goods, or run other marketing campaigns. The person who wants to use your coupon must give you their name and email address if it’s not an online discount.
Pages on social networks
Social media sites, like Meta (META), which used to be Facebook, are also great places to share offers. You can use your Facebook business page to give away deals and freebies. People who have coupons can use them in stores or online. You can also set an end date to make people feel rushed, which will make them more likely to use the coupon and buy your product.
On your business page, you can also tell people about your goods and events and talk to them. You can build stronger ties with repeat customers and better understand their needs by talking to them often, giving them discounts, or telling them about news. A rough guess is that 55% of customers said that stores that offer deals and discounts make them feel better about the store or its brands.
Cons of Using Coupons for Business
The worst thing about freebies is that they cost your business money. You will make less money if you give discounts. The most important thing is to figure out if that price will help your profit margin by bringing in new customers or old customers who may have left to find better deals.
Jay Goltz wrote a column in The New York Times called “Doing the Math on a Groupon Deal.” In it, he explained how to figure out if a coupon price is good for your business.
Undermines Current Revenue
Even your loyal consumers may develop the habit of anticipating coupons, which cannibalizes revenue that was already generated prior to the implementation of the coupon program. Therefore, it may be advantageous to contemplate the timing and manner of offering those discounts in order to prevent any adverse effects on your current clientele.
Profit Decrease
Coupons may reduce the profit on the item or items included in the coupon campaign; however, the cost of production will remain constant. Consequently, it is crucial to evaluate the value of a coupon campaign to the business and determine whether the discount will generate sufficient new sales revenue in the long term to compensate for the campaign’s expenses.
Strategic Considerations for Coupon Implementation
Developing an effective coupon strategy should focus on enhancing your financial outcomes. Consider the following tactics:
- Cross-Selling Opportunities: Utilizing coupons to attract visitors can lead to increased sales of full-priced items. This approach is frequently adopted by grocery stores, where discounted products draw customers who also purchase other regular-priced items.
- Building Customer Relationships: Coupons can serve as a bridge to connect with new shoppers. By capturing their attention with offers, you have an opportunity to initiate ongoing relationships via social media or email, fostering a base of loyal customers.
- Re-engaging Past Customers: To revive interest among customers who have not visited recently, consider targeted coupons. For instance, leveraging a robust marketing database, send discounts to those who have not engaged with your store in the last 60 days, encouraging them to revisit.
Navigating the World of Coupons
Where to Find Coupons:
- Traditional Paper Coupons: Often distributed through direct mail or coupon books, these remain a staple for driving customer engagement. Many retailers also provide coupons with purchases as an incentive for repeat business.
- Online Coupon Codes: Digital storefronts frequently utilize promotional codes to attract new customers. Social media platforms are a common venue for these offers, helping brands expand their digital footprint.
Creating Online Coupon Codes:
- E-Commerce Platforms: Tools like Square provide merchants with straightforward methods for generating and managing coupon codes. This functionality is standard across many online shopping platforms, each with its unique setup.
Locating Online Coupon Codes:
- Dedicated Websites: Platforms like CouponZania and DealsPlus aggregate thousands of coupon codes from a wide range of retailers. These sites collaborate with businesses to extend special offers, aiding in customer acquisition and savings.
- Browser Extensions: Tools like Wikibuy and Honey automatically scour the internet for available coupons at checkout, making them invaluable for savvy shoppers. In 2023, Honey alone was used by over 17 million users to find deals seamlessly.
Strategic Impact of Coupons: Coupons are more than just a promotional tool; they are a strategic component of a broader marketing strategy designed to boost long-term customer engagement and increase average sales per visit.
By directing customers toward higher-margin products and services through strategic discounts, businesses can significantly enhance their revenue streams. It’s crucial, however, to measure the new income against the potential costs associated with discounts, ensuring the coupon strategy delivers a net positive impact.
