Do you use coupons? Most businesses do, in one way or another, and they have historically been a great way to boost sales and move product. After the recession hit, thousands of companies began to rush coupons through the printers in an attempt to hold on to some of their customer. However, a recent article from The Street explored the concept of the coupon and posed the question: are consumers burnt out on deals?
It is an interesting problem, but not very surprising. It is easier than ever to send a blast of promotional material over the internet, and many online consumers have begun to tune it out. Too many coupons could also hurt the reputation of a company’s product, as consumers will begin to associate it with a discount brand. So how can your business properly utilize promotions?
Below are our five tips for using coupons to increase sales without annoying your customers or ruining your image.
1. Know your price points and don’t take a hit just for some publicity.
Big Corporations will occasionally do this to generate hype, especially if the product they are launching has received a bit of media attention. But they can afford to take a small cut in their profits, most small businesses can’t. So know exactly where you stand before you start sending out coupons. Another danger in discounts is a race to the bottom that could occur if your competitors have a very similar product and try to meet you cent for cent during your promotion. Before you send out the first batch of coupons, have a clear idea as to how much you stand to lose, and if you can even afford this promotion.
2. Try not to spam your costumer’s inboxes and mailboxes.
No one likes having to dig through a big pile of paper in their mailboxes or a huge blast of messages in their inbox. Things like that are annoying, and end up alienating rather than attracting. So be sure to have a set amount of coupons you are going to send out, and try to ensure you aren’t mailing anything to the same person twice. You want to inform your customers without drowning them in information, so plan accordingly and make sure you aren’t sending a new coupon out every week.
3. Figure out what you are trying to accomplish with this sales campaign.
In order to understand if a particular ad campaign is worth it, you need to have markers of success in place. Know what type of sales increase you want to see at the end of the campaign, or how many new customers you want to walk through your doors. If you don’t have a clear idea as you what you want to accomplish, you are just wasting money on paper and postage. You should plan your coupons according to what you want to accomplish as well; a buy one, get one free coupon may get a lot of product off of your shelves, but you probably won’t have too many repeat customers. Do your research, and have a clear set of goals in mind.
4. Understand your customer’s needs and wants.
You know what you sell better than anyone, and should know your target consumer group just as well. Do they want to buy in greater numbers? Can selling more of your product potentially harm or anger your loyal customers? If you typically sell a high-end product for a lot of money, offering it cheaply for a limited time may alienate your customer base that bought the product from you when you first began to stock it. Doing this will also help answer the question as to a discount campaign would tarnish your product’s reputation. Most small businesses do not want to be the discount provider of their industry, but constant discount campaigns can turn them into that. A good understanding of why your customers come to your business specifically will help allay these issues.
5. Be different!
Spontaneity is key here; a discount campaign should be different and interesting! If you send out a book of coupons every week, you may be able to move inventory but your customers will get bored. Most small businesses use discounts to entice new consumers, so try and keep your campaigns to a minimum. If you don’t, you will never be able to generate the buzz necessary to get customers from their house to your store. Coupons aren’t the most exciting things in the world, but if your business isn’t known for giving discounts then they may be enough to attract interested customers.
In the end, the success of a promotional campaign depends on the goals of the business owner and the industry the business is in. The most important thing is to not inundate your customers with pages and pages of coupons. They will simply begin to drown out the noise and, before you know it, no one will care that you started a new campaign. So do your research, outline your goals, and try to stand out. That way you will have a strong measure of success and you will be able to grow your business.
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Of all the points you've mentioned, understanding the wants and needs of your customers is the most important, in my opinion. The customers are the lifeblood of a business. Get inside their heads, understand their needs and you bank balance will swell!