RHP Marketing Services
9 Huge Advantages of Using Coupons for Retail Businesses
1) Bring in New Customers
It’s always cheaper to keep an existing customer than to get a new one. BUT, coupons are an efficient and affordable to way to get new people in your doors or on your website. Many of them will be one-time shoppers but even getting a few new regulars is great for business. A great way to particularly attract newbies is to promote some of your new products. A lot of people may want to try it, just not at full price. If they love it, paying full price down the road won’t be a big deal.
Also be sure to come up with strategies to keep these new customers. Use this as an opportunity to work on customer service, create a more memorable shopping experience, build your customer database, and get people active on your social media and review sites.
2) Raise Your Brand Awareness
With new customers comes a boost in brand awareness. Your coupons will also reach many more people who don’t come into your store during this promotion but may do so on the next. At the very least, you’re on their radar. Such recognition is huge for new businesses or those that don’t have a strong presence (e.g. an Etsy shop or a brick and mortar store with a poor location).
3) Word of Mouth Is Free
When it comes to discussing retail, nothing gets people chatting more than a great discount. With the advent of social media, some deals can even go viral. There are also sites wholly devoted to users sharing various coupons they’ve stumbled upon. Large retailers play this game too. GAP recently ran a coupon that gained a lot of traction – by the end of the day, 445,000 people had redeemed it.
4) Large Scale Exposure
Word of mouth advertising is great, but even if it doesn’t go viral, you can still easily reach thousands of eyes and ears. Digital coupons can be emailed to a mass audience with a single click. If you’ve kept up with your customer database, this will be even easier. Be ready, however, for huge demand. You always want to be over prepared in these instances. Staff and order accordingly.
5) Target a Specific Audience
Coupons can easily target the exact customer you want to reach, especially if you use a third party site. Most offer tools that filter recipients by location and interest. This minimizes your waste of time and money. Figure out different strategies for attracting new customers versus thanking your most loyal. You need to reach both audiences but in very different ways and with different offers.
6) There’s Little Upfront Cost
Coupons are another form of advertising. But rather than pay a lot up front for a campaign that you’re not sure about, the cost of coupons comes from a diminished profit at the end the of the sale. Just be very careful to minimize losses: limit the number of redeemable coupons, couple the deal with minimum spends, offer only one per customer, etc.
7) Its Effectiveness Is Easily Measured
While a loss of profits is certainly a cost, it’s an easy cost to measure and gauge against the success of the promotion. You can use a numbering system, online tracking or scanning apps to keep an accurate count. Your POS system tracks all of this automatically, allowing you to access detailed sales reports. Coupons run through your point of sale allow you to see how many people you reached, how many sales were made, and how much additional money was spent during each customer’s time in the store. This will help improve future promotions.
8) You Can Pick the Product Strategically
Like any promotion, it’s an opportunity to encourage customers to purchase products that they normally wouldn’t buy. You can also select products with a higher profit margin in order to minimize your losses during the promotion. Overstocked items of slow movers work well, too. Promos will get these out the door and help you better manage your inventory. Stay away from discounting your best sellers, though. You don’t want to discount sales that you would have made at full price otherwise.
9) You Control the Timing
Coupons also allow you to control how long the deal lasts. Depending on the industry and products, some deals are best as quick, short-term offers while others are better left available for a longer period of time. Make it specific and somewhat urgent; broad sales that last for a too long don’t encourage repeat shoppers.