Discounting Your Way to Profits

According to recent statistics, the use of coupons has reached an all time high.  In fact, coupon distributing sites have popped up everywhere. Why? Because coupons create interest and generate traffic and have high redemption rates. Or, in plain English: millions of consumers are using them. And there are no short order of companies offering them: from discount codes for Abercrombie to coupons for walgreens, you’d be hard pressed not to find companies offering them,  meaning  your competition is offering them as part of their marketing mix too and you should probably start thinking about developing one for your business. Let’s discuss some basics.

Design – does the coupon flow with your overall branding strategy? A good design focuses not only on the discount received for the product or service, but should also create brand recognition. Secondly, does the promo make sense? Not all promos are good promos.  The last thing you want to do is have so many awesome deals that you lose your shirt on all of them.  Many companies have complained about market and profitability erosion by using those Daily Deal sites. So use due diligence and make sure your coupon doesn’t dilute your brand or your revenue stream.

Distribution – There are many ways to get them into your customers hands.  Create coupon codes and syndicate these via social networks, create an email blast, use Google offers, etc. Get them out, track where they came from, and how much they converted for.

Some final words.  Redemption rates go down you if have too many offers being distributed simultaneously. To overcome analysis paralysis, provide a clear detailed objective, include a product image, use your logo, make sure you have some sort of tracking, and a expiration date. Do this and you will increase your paying client base, your branding and repeat business.   And those aren’t bad results when you figure you are now discounting your way to profits.

A Great Deal

Who doesn’t want a great deal? “The Great American Coupon is making a big comeback, thanks to the Great American Recession” said the Wall Street Journal.  Americans redeemed about 3.3 billion coupons last year, a remarkable 27% leap from 2008 and the first annual increase in 17 years, according to a report issued at the end of January by Inmar, a coupon-processing agent.

Because coupons “pull in the business” they have gained remarkable acceptance and popularity among astute marketing managers. The reason is simple really – it’s their overwhelming acceptance and use by the consuming public. In fact, Advertising Age (the Bible of the advertising industry) reports that 87% of all shoppers use coupons. And who doesn’t want to save money? I try all the time. I just saved $50 on a laptop with a coupon at Staples (thanks @numerati for the tip), on top of the $100 off promo the store had! And the wife loves to save on everything – it’s like a game to her.

Moms make the effort to save. 96% of Moms have used a coupon to purchase a brand they would not normally buy, and 74% visit more than two stores weekly to redeem coupon offers.  As technology pushed Moms online, marketers followed, offering exclusive downloadable deals through couponing sites and, more recently, by using social media in the hopes of making these deals — and their brand — go viral. Today coupons have proven themselves to be highly effective sales tools for every conceivable size and type of business.Though most still prefer clipping coupons (72%), marketers should diversify offers both online and off as 70% of Moms find coupons online and 73% subscribe to couponing emails or newsletters. Integrated campaigns combining viral distribution of paper coupons through offline influencers with online promotion on couponing websites and blogs enable Moms to find the deals that best fit their shopping habits, ultimately supporting long-term redemption.

And as coupon sites become more competitive, many are diversifying their offerings to remain competitive.  Take for instance Savings.com a full scale resource for everything-online coupons. This site in particular not only offers coupons, but has an Answers page which allows you to ask questions about anything you want to save on, and the Savings.com community will respond in real-time with answers to your question.

Businesses are in business to make money.  Consumers want keep more of it in their pockets when they buy stuff.  Coupons make it all possible. Now that’s a great deal!