I’m not a fan of coupons. There. I said it.
If you’ve downloaded my free eBook Main Street Marketing on a Shoestring Budget, you know I prefer giving away gift certificates with no strings attached – instead of coupons – to attract new customers.
I also fear that using coupons too much trains your customers to wait for the next coupon before they shop.
Lastly, I believe coupons are more geared toward the Transactional Customer than the Relational Customer (the latter whom should be your primary target in your advertising and marketing).
With all that said, coupons done right can be a valuable part of your tool box.
DOING COUPONS THE RIGHT WAY
As I told you yesterday, the real key for coupons is to make them Rare and Special. Rare so that people jump on the deal when it happens and aren’t trained to wait for the next one to make their next purchase. Special so that the customer isn’t anticipating the next coupon and is more likely to act on the current one.
Rare and Special will increase your ROI because they will get more people to act on the current coupon. Your other big issue is delivery. How do you get those coupons into the right hands?
- Newspaper Inserts – this is the preferred method of the big bog stores because they have the economy of scale for printing and delivering to get the best rates, and they don’t care who gets their coupons
- Direct Mail – you can buy a list (and hope it is okay) or build your own. One takes money and has little return. One takes time but has a better return.
- Postal Zip Codes – you can target zip codes instead of direct addresses for a little less per piece than direct mail
- Email – easily the cheapest, easiest to share, but also most easily duplicated
Let’s look at that last one a little more closely…
KNOW YOUR GOAL
If your goal is to limit the coupon to “one per customer”, email can be tricky because it is easy for a customer to print out multiple copies and use them herself or give them to her friends. That’s the big question I always get about sending coupons via email. “But how will I track if a customer uses more than one?”
I always ask back, “Does it matter if a customer uses more than one?”
Your goal for any coupon should be to Drive Traffic and Increase Sales. That is what coupons do best. Where is the harm if a customer shares your coupon with others? Where is the harm if the customer makes multiple trips using multiple coupons? Don’t both of those Drive Traffic and Increase Sales?
If your goal is to Increase Profits, then a coupon isn’t your friend in the first place. Coupons won’t help your profit margin (I’ll show you the math later why “lower your price and make it up in volume” doesn’t really work), but they can increase your traffic and cash flow and give your sales staff the chance to increase average ticket sizes and items per transaction.
CHANGE YOUR THINKING
If you send out a coupon via email, you have to consider two things…
- It will be shared
- It will be printed/used multiple times
If your goal is to Drive Traffic and Increase Sales, sharing and printing multiple copies are both GOOD things. In fact you want to encourage that.
Encourage your email list peeps to share the coupon with as many people as they can. It increases your reach to people who might not yet know you and it gets your fans to promote your business for you. In fact, take it a step further and encourage social media sharing, too. Your goal should be to get the coupon to as many people as possible as cheaply as possible. That’s how to get the best ROI.
Encourage your email list peeps to use the coupon early and often, too. Every trip they make means another chance to deepen your relationship with them and turn them into fans. (If you sell a commodity item like food that people are buying weekly, simply put a tighter time limit on the coupon to keep the coupon Rare and Special). The reality is that you won’t get that many multiple trips. Unless your offer is incredibly compelling and you’re giving away half the store, the likelihood that a customer is going to shop your store twice in one week is fairly low to begin with.
Email is the cheapest way to deliver coupons. It also is one of the most powerful ways to get your fan base to help you reach more and more people. You just have to change your thinking from one of scarcity (“limit one per…”) to generosity (“use it early and often and share it with the world…”).
PS My final tip is to keep the coupon as simple as possible with as few rules and exceptions as possible. The easier it is to use, the happier your customers will be.