What does the word coupon bring to mind? Clearance sales, discounts, special offers, freebies, you name it. Yes, coupons have been used by businesses for decades to dole out free or discounted items or services. And they are really effective for ramping up sales, reducing churn rate, reeling in new customers, and more. As great as this may sound, is it proper to resort to the use of coupons every time a business feels stuck in sales?
I think not.
Let me explain…
Retail stores sometimes use coupons to sell items that have been sitting in their stores for a long time. Or even increase sales at certain times of the year. But the use of coupons is not without consequences. For one, it does not guarantee repeat business because most bargain shoppers are just that – bargain shoppers. For another, it would cost you some revenue because you need to subsidize the price of the discounted items.
So, here’s the deal…
Even though coupons are great you have to use them wisely so as to get your desired results. To do this, there are 4 important factors you should consider.
The best things in life are free, or are they? Coupons are amongst the best things businesses use to improve sales. But they aren’t free. They usually result in decrease in profits, or worse, a loss. The best thing to do before you run a coupon campaign is to consult your financial team. They are in the best position to measure the cost against the potential profits of the campaign.
If somebody walks into your restaurant, for example, it means they are hungry and want to grab a bite. It makes no financial sense to offer them a coupon in that instance. You know what would make sense? Offering a coupon for an extra drink free for the next time that customer visits and dines with you. This will make the customer eager to come back and do business with you, hence, building a foundation for repeat business.
If you can get a customer to come to your store or restaurant more than three times, it becomes a habit. And this habit, if nurtured with great customer service, will transform that customer to a die-hard fan of yours. You can use coupons creatively to start this process.
- Your Brand Image
What’s the first thing that comes to mind when you hear the word coupon? For some, it’s an opportunity to save money on a purchase. For others, it represents cheap quality products or services. Before you proceed with a coupon campaign, find out how your target customers perceive you. If your target customers see your business as posh or high-status, you may ruin that perception by offering coupons. Imagine what it would look like if Ferrari or Aston Martin came up with coupons. That would be absurd. And so, while coupons may attract some customers, it may turn off others. Be sure to know your brand-positioning and speak with your marketing team before you initiate any coupon campaign.
- Who Is Your Target Audience?
This is an important question to answer before you launch a giveaway program. Starting a coupon campaign without a target in mind would cost you dearly. You must first decide whether you are trying to reach new customers or long-term customers. Answering this question will help clarify your promotion message. You will know what platform is best to promote your coupons.
If you are trying to reach out to your regular customers with coupons you must consider the long-term benefits. You must ask yourself how many customers you hope to bring back to your business with the program. And also how much each customer would spend per visit when they do return. With this you will know if the entire campaign is worth it or not. Here are 3 tips to turn first-time customers into your customers forever.
- Data. Data.
Behind every successful coupon campaign is accurate data. If you do not have adequate customer data, you might as well forget about running a coupon campaign. You need to know your customers in order to know how to design your coupon program. They serve as guides as to what your communication should be like.
To collect the data you need, you must have the right tools. There are several ways to garner customer information – online and offline surveys – but one of the most effective methods is the use of Wi-Fi technology. Wi-Fi analytics and marketing technology makes collecting information a cake walk. The information collected is accurate and easily digestible. If you offer social Wi-Fi at your retail store or restaurant, you could integrate it with a Wi-Fi analytics & marketing platform like SpotOn Wi-Fi. Our platform will help you make the most of your Wi-Fi login page to collect information in exchange for coupons.
You can collect data such as age, gender, geographical location, and other demographic information. With them you can run different campaigns and see which ones are the most successful. You can create customer personas with the data collected and then target specific personas.
You can contact us to learn more about how our Wi-Fi software can help you develop effective coupon programs.
POSTED ON July 24, 2019