To coupon or not to coupon…

03/16/2010 at 11:04 AM Leave a comment

…that seems to be the question everyone is asking these days. Companies are wondering whether or not they should discount items and services in order to bring more people through the door. When asked this question, my typical response is – “Why do you want to coupon, and what are you planning to discount?”

Here’s my theory when it comes to using coupons. Businesses should not rely on coupons to completely turn around a falling clientele. There are two purposes of this type of promotion: (1) to get people to try your product and (2) encourage customers to come back. Utilizing coupons in your businesses’ marketing plan can be extremely useful, especially when you’re coming out with new products, opening a new location or simply moving into the next season.

To me, the biggest faux pas in couponing is when businesses discount their major items. Now, for some businesses this is nearly impossible, but for others it can be done quite easily. For example, if you own a burger joint, don’t necessarily discount the burger – instead have customers buy a burger and get a free order of fries.

Another important note to remember: don’t forget loyal customers. Loyalty programs are a must. It’s easy to get in the rhythm of the “traditional” coupon strategy, but always remember that it costs about nine times more to bring in a new customer as opposed to retaining a current one.

There are several advantages to coupons (e.g. measurability, time limits to cause action and building segments), but there are also several disadvantages (e.g. more work for employees, repetition – it typically takes 7-10 impressions before a consumer is ready to take action – and  the possibility of consumers misusing the coupons). My biggest advice would be to take your time and not rush in to a promotion like this. It can be a great opportunity for your business if executed properly.

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