How using digital coupons could boost your business
It’s no secret that Americans love coupons — the number of U.S. adults who redeemed digital coupons in 2015 was up 7.6 percent to 121.3 million, according to eMarketer estimates. But why use coupons in your business?
Done successfully, coupons can help you sell more products, improve the image of your brand and win customer loyalty. Whether you are trying to attract new customers, increase customer spend or retain existing customers, coupons offering a discount or a free item or service can help differentiate you from your competitors.
Studies show mobile coupon users —those who access coupons on a device like a tablet or cell phone —are expected to increase by double-digit figures in 2016. The increase will be driven by the rise in smartphone and tablet adoption and digital channels offering coupons easily accessed by mobile, such as websites, mobile apps, social networks, email and daily deal and group buying sites.
How can coupons help my business?
Coupons are a win-win for both companies and consumers. For the vendor, coupons attract consumer attention, help advertise new products, buy loyalty, win repeat business and enable companies to target their marketing efforts. Research shows that consumers who use coupons feel smarter about their purchases and tend to spend more.
“Coupons are a great way to get customers in the door that might not have originally considered us,” says Julie Holmes, President of Virginia Tire and Auto.
“They also help provide an impetus to come in for customers who have a need for a service but were waiting on the right moment to take care of it. Every month we see a high volume of coupon redemptions and the business that they help generate makes a big difference in our sales numbers.”
Every business has its slow times of the week, season or year, so coupons offering good deals are a great way to attract customers during downtimes.
Inmar’s 2014 Coupon Trends 2014 end-of-year report found an overwhelming majority of shoppers (96 percent) reporting using coupons in the prior three months and almost half (47 percent) of shoppers were regular coupon users.
So, how does it work?
Whether you choose to distribute coupon codes via email, an app, on Facebook or through a website, the concept is the same. You offer dollar-off or percentage discounts or a service or product free of charge when the customer buys something else, such as a free tire with every set of four. The customer simply redeems it using the coupon code.
There are sites where you can design and print or email coupons for free, such as Send-a-Coupon or The Coupon Maker. Or, for a relatively small monthly fee, sites like Coupon Tank or Couponler help you design your coupon and distribute them on your behalf to a digital audience selected by you, for as long as you choose.
Big group-buying and deal sites like Groupon or Living Social also charge a fee, but they have a huge and more targeted audience reach and should tailor the discount or promotion to your specific business, thereby limiting potential risk. They analyse and track the data they receive to help you plan further promotions.
What do I need to know to get started?
If you’re going to offer coupons, you need to make sure your business is prepared for the increase in customers and sales. Don’t distribute 10,000 coupons for a free tire with a set of four if you can only supply 500 tires. The last thing you want is to be unable to fulfill the coupon and turn away potential customers. Depending on the coupon or voucher, you may be legally obliged to honor it or give a refund.
It’s also important to do the math; how much will the free product, service or discount cost you versus how much you will make? You need to determine the return on your investment before you dive in because offering bad deals can break your business.
Holmes says, “We look at a variety of factors when considering what coupons to offer including profit margin, seasonal driving conditions, historical knowledge, competitor coupons, and past coupon redemption rates.”
“One thing we do at Virginia Tire and Auto that has been helpful is to track individual coupons with unique codes so that we know what placements are driving the redemptions and what discounts are resonating with our customers. Along with this, we also pull a monthly coupon report and analyze the data to look for trends and insight that develop from month-to-month and year-over-year.”
How do I get started?
Do your research. Speak to other businesses that have used coupons successfully and study closely what your competitors are doing. Read advice from sites like Business Knowhow or, if your budget stretches to it, larger online deal-offering companies have salespeople who can talk you through the process. There’s no harm in starting small to test the water.