For most small businesses coupons is a fact of life. In this difficult economic environment, when consumers are strapped for money and are watching their purse strings carefully, it is more important than ever to use coupons to entice customers to come to your business. Not all small businesses are created equal when it comes to coupons. Some businesses such as pizza use them extensively; while others are not so heavy users.
While it is important and imperative to use the coupons to improve your sales or at least hold to the customers you already have; you also have to have a good plan in place to use them effectively. To a novice it may seem that coupons serve only one purpose – to attract customers to your business. However, judicious use of coupons can not only improve your sales; but also help your business achieve other important goals.
Below we have identified different situations in which coupons can help achieve the results you are looking for.
- Make Customers Try New Product
This coupon can be used when you want your customers try new product that is just introduced. By offering the new product at a special introductory discount you can raise awareness of the product as well as make customers try it. If the product is good, they will come back to order at a regular price after they have tried it with the coupon. - Make Customers Order Higher Quantity
Typically, these coupons are in the form of “buy-one-get-one-free” deals. This makes the customer buy more quantity with the first item bought at a regular price. To your business this may have the same costs as other coupons; but this coupon helps you sell higher quantity. If you are able to get a discount from your supplier for higher order quantity this coupon can generate additional profit for you. - Generate Large Number of New Customers
We devoted an entire post on how to attract large number of new customers here. To summarize, using coupons that provide outrageous deals can help bring in new customers in large numbers to your business. Make sure you are well prepared to handle the rush and keep the offer for a very limited time. Also, ensure that the coupon is valid only during the time and day when your business is not too busy. - Build Customer Loyalty
This coupon is popular with services business such as oil change and hair salon among others. The idea is that the customers can get 1 free service after they have purchased your services certain number of times. This helps you build loyalty with your customer base and generate repeat business. Many businesses prohibit the use of other coupons when using loyalty cards to ensure the profit does not take too big a hit. - Use Coupons with Low Impact On your Profit
It is a fact that using coupons will reduce your profit; while generating higher sales. However, certain types of coupons can help you avoid taking too big a hit on profit. One popular form is to offer a smaller side item free of charge with the purchase of big ticket item. Many restaurants offer a side item such as soft drink for free when customer orders the main entrée. The cost of giving the free side item is minimal; which helps maintain the profit.
What other coupon strategy have you used for your business?
