Part 2 - Field Guide
Eight Core Rules for Effective Couponing
Make no mistake about it, couponing can be an effective marketing strategy for nearly any retail, service, or professional business.
While there are many advantages and strengths to coupons when executed correctly, there are also some inherent risks. The biggest attraction and strength of coupons is their ability to attract new customers. The most notable risk is what was stated in the article... that your current customers become trained to wait for the special offers, therefore cutting into profit margins.
These core rules for couponing are a compilation of ideas from several articles published by marketing companies that specialize in couponing and work closely with businesses on sales strategies.
Sources: Uniqodo, Fora Financial, SquareUp, Mailmunch, Voucherify, GoDaddy
1. Start With Strategy
Before you launch a coupon campaign, fully understand what it is you want to accomplish. Is it to create new customers, or attract past customers that haven’t done business with you recently? Are you trying to reduce inventory or move a slow-moving or overstocked product? Simply making a coupon offer without fully knowing what you are trying to ultimately accomplish will give you lackluster results.
2. Do the Math: Make a Compelling Offer But not Too Compelling
Couponing only works if the offer is relevant and attractive. You need to establish the level of profit margin you are willing to give away to garner their business.
Understanding your financial goal for the campaign is paramount before proceeding, i.e., Are you attempting to attract new customers or reduce slow-moving inventory? If so, you may consider a stronger offer. If the goal is to attract current customers back into your business, a lesser offer may be sufficient. If your goal is to increase your average sale, make the offer contingent on spending at a minimum level before an offer is in effect. If you want to increase online orders, offer free shipping or a digital coupon code for first-time orders.
3. Make Them Easy to Find and Use: Distribute Through Various Channels
Having coupons that are hard to find and difficult to use isn't an effective marketing strategy. Ideally, your voucher should find each potential customer, not the other way around. If coupons are filled with disclaimers and hard-to-understand language, the campaign has the potential to cause more harm than good. The KISS acronym is in play, “Keep It Simple Stupid”!
- Website promotion: Add a pop-up that asks customers to enter their email addresses. Send them to an exclusive landing page or email them a coupon code if they provide their email address.
- Advertise: Advertise your coupon program; don’t keep them a secret. If you use traditional mediums to promote your business normally, use them to promote the coupon campaign as well.
- Direct mail campaigns: Send customers exclusive coupons in the mail.
- Email marketing campaigns: Send a monthly email newsletter to the customers on your email list with a discount code.
- Social media posts: Invest in paid social media posts that promote your loyalty program.
- Content marketing: Write a blog post on your website that includes a call-to-action, leading to an exclusive offer.
4. Advertise your Business, not just the Offer: Make them Standout!
Couponing is a great way to advertise your business, so you should include your company logo and slogan. Your “business name, logo, and slogan” is your brand.
Just like searching Google, the more familiar people are with your business name and what you stand for, the more apt they are to consider your coupon offer. Like all advertising, make your coupons stand out and shine. Your potential customers are more likely to notice your coupons if they're visually appealing. Bland, boring, black-and-white coupons will not be received by potential customers nearly as well as something bright and brilliant.
5. Appeal to Unique Customer Segments
While your primary goal may be to attract new customers, your coupons don't need to be a one-time deal. Vouchers can also build customer loyalty by offering periodic discounts and promotions. Email is an effective tool to target customer segments with specific offers. For example, you can reward your best customers or entice infrequent customers to purchase items by offering exclusive promotions.
6. Limit the Number of Coupon Campaigns
Offering coupons is a great way to keep your customers satisfied. However, you shouldn't offer so many discounts that they never pay full price. If they get used to consistent offers (for example, weekly or monthly coupons), they may delay their purchases. The offer won't resonate with your customers if it becomes too commonplace. Too much of a good thing is ultimately a bad thing!
7. Direct Response Advertising: Set a Deadline
Coupons are best used as direct response advertising. You're more likely to see immediate results if you create a sense of urgency. Designate an expiration date instead of giving recipients an open time frame to use your coupons. Again, make it easy and clear. “Use by” or “Offer Ends” will have more impact than a coupon with no expiration date or an expiration date that is beyond 2 or 3 months.
8. Test your Coupons
If you use couponing as part of your regular marketing strategy, or if you are attempting it for the first time, test it. Use two different offers and see which offer works best, i.e., Half Price will typically outdraw 50% off, save $10 on a $30 purchase or more vs. 30% off. The options are endless, and they don’t need to equate to the same value.