Everyone likes a discount, whether it’s a giant clearance sale with 75 percent off anything and everything or a simple coupon that will save a meager 10 percent on a box of donuts. Coupons are excellent incentives to bring new customers into a business as well as hold on to current customers by showing them how much a business cares for their patronage.
How much do we depend on coupons? Consider some of these statistics from Webroot:
· Coupon redemption online increased by 263 percent in just 2009
· A quarter of internet shoppers have spent more than an hour searching for the best discounts they can find
· In 2010, coupons saved consumers $3.7 billion dollars
· In 2011, every hour of time customers spent searching for coupons was worth an estimated $100.
While it might seem like coupons are bad for a business by lowering the prices of purchases, the opposite is true. There are a multitude of websites that focus on nothing but coupons, and there's a reason for it: today's consumer demands it.
Coupons and Marketing
Coupons are more than just a potential discount to a customer; they are actually a much more subtle form of marketing. Coupons can bring more focus to your business from a wider range of markets as some customers who might never have thought to buy at your store might change their mind if they see they can get a nice discount. According to the Small Business Administration, using coupons can have dangerous consequences for your business unless you take the time to fit them into your business plans; the first step should be to gauge whether your business can afford a coupon discount on some product line throughout the whole period you offer the coupon for. You’ll have to look at your long term goals and profit margins to see whether your other non-discounted product lines can cover the potential loss of profit from offering discounts. It’s also incredibly important to look into what means of coupon distribution you are going to use; many of the social and group-buying coupon sites take a percentage of the revenue from the advertised offers.
As an example, Ebates’s Neiman Marcus coupons offer a selection of deals on fashionable clothing from Neiman Marcus for customers to pick from including 4% cash back offers on products; just make sure you don’t allow too much overlap with discounts. Another consideration is whether your business can handle the increased traffic flow from a large number of new customers coming in with coupons. Running out of the advertised product is bad for business.
New Customers and Entrance Deals
Since coupons work as a form of marketing, they are designed around encouraging customers to visit the business redeeming them. Sure, they might reduce the profitability of whatever product or service line they are advertising for however long the coupons are in effect, but if they can bring in customers who would not have bothered without the coupon, then they have achieved their goal in bringing new patronage into the store. According to 39 Celsius, it’s important to think about the long term effects of a coupon, especially if you’re offering a huge discount for a first time shopper (75 percent off first lesson or service call and so on). The point is not to get them to make that one time purchase; the point of the coupon is to give the customer a reason to try out your service or buy your products. Once they’ve taken the first step into your business, the quality of your service or product should keep them returning.
While coupons are an excellent means of marketing and bringing new customers in, they can also be excellent at helping foster customer loyalty. As a business owner, you don’t just want customers to come in once and never return; customers who shop at your store time and again can be considered part of the backbone of your business and profits. Keeping them happy and coming in to shop is paramount. Coupons and discounts can be a fantastic means with which to keep current customers returning. According to Mashable, one means with which this can be done is through your businesses' Facebook page; not all your customers will like your Facebook page but for those who do, you can reward their loyalty by offering exclusive coupons through Facebook. There are also apps available that can determine who your business’s top fans are so you can offer them some exclusive discounts for their loyalty. Membership programs can also be used in this way. Almost everyone has seen those cards that after being stamped 10 times or so the customer gets a free meal or something along those lines. Using programs like that can give customers incentive to return to your business again and again.This post deals with: ... and focuses on: