Are online coupons right for your business?
Have you ever bought a restaurant coupon from Groupon, Cudos or LivingSocial? Maybe you’ve taken advantage of a Facebook deal or a coupon on the back of your supermarket receipt? If you haven’t, then no doubt you know someone who is into them. They can be a great way to entice new customers or off-load excess stock to a wider audience than your own business receives.
Of course, online coupons aren’t for every business, so what do you need to know about online coupons before deciding if they’re right for you?
Pick your coupon company carefully
There are reviews from merchants about every coupon company all over the internet, and they will cover every experience from positive affirmations to total disaster stories. Keep in mind that these are individual experiences and for every horror story, there’s usually a thousand positive experiences. Yours will vary depending on your business and product, as well as the coupon company you pick to advertise through. The smaller your business, the smaller you should start. Supermarket receipt deals are great for businesses wanting to target locals and Facebook coupons should be used to reward regulars, but if you’re gunning for a larger audience, then consider the major coupon websites.
Decide what you’re willing to offer up front
Some of the biggest disasters in coupons have been when the coupon is worth more than the average spend in store, so customers aren’t spending the full amount or any extra. For instance, offering a $15 meal for $7 doesn’t benefit you or the customer if the average spend at your café is under $10. It’s a modern marketing technique, but old maths still applies, so take the time to crunch the numbers. Make sure you set your terms and conditions up front, both on the coupon website and on your website and in store. This should help reduce the number of customer complaints. Keep in mind that some will try to use coupons after their expiry and in some cases, it’s worth accepting them out of goodwill.
Get costs in writing
There’s been more than one horror story about small businesses being hit with much higher fees than they initially planned for because they weren’t aware of all the costs involved. Make sure you are aware, in writing, of exactly what the coupon is going to cost or gain you per customer so you can settle the maths before you sign any contracts. Even better is to ask the sales representative how many coupons similar businesses have sold and what their experiences were like. Don’t be afraid to ask them about both success and disaster stories to help you decide which route you want to take.
Look at it as advertising, but have a strategy to turn coupon users into repeat customers
You’re not going to make a huge return using coupons, so you need to accept upfront that this isn’t a money-making exercise. Instead, look at it as a way to entice and engage new customers, or reward regular customers. Many coupon companies will be reluctant to share customer information with you, so when those customers visit, encourage them to follow you on social media or join a mailing list. If you mention the benefits of doing this, they’re more likely to leave their details. If you do want to try and make money from this experience, don’t undercut yourself – find a deal that results in you making a profit, even if it’s small. You can’t rely on every customer spending more than their voucher amount.
Work within your limits
Companies like Groupon and LivingSocial can target your product to a specific suburb or city by asking users where they’re located when they sign up. If you’re a small business with limited resources, ask to be targeted to those audiences so as not to overwhelm yourself, or set a cap on your deal. Supermarket coupons are unique to each supermarket’s location, so only people who shop locally will be exposed to the deal. Because coupons expire, you have to be prepared for a sudden rush and work to keep that rush manageable. If you run the coupon nationally, make sure you’re prepared for the demand ahead of time and not left scrabbling for staff or products.
Be firm but kind with coupon customers
Small businesses are built and sustained on relationships with customers. People come back because they like that you remember their coffee order or skin-type. If you want coupon customers to become repeat customers, you need to treat them as you treat your normal customers, especially if they live or work locally. Engage them in conversation as you would a usual customer, and when enforcing coupon terms and conditions, be patient and calm. Finally, remember that these people clearly like coupons - if you want to entice them to come back, why not offer them one of your own coupons? It could be something small that costs you nothing, like a free biscuit with their next large coffee purchase or an in-house skin evaluation.
Online coupon companies can be daunting, but there is a reason they have so many repeat merchant users. With proper planning and effort, they can be an effective marketing tool and can result in up to 20% return customers.