Never in the history of retail have coupons been more effective or demanded by customers than now. The advent couponing apps like Groupon or Retail Me Knot have made shopping with a coupon an almost necessity. It's no secret that customers like to get a deal. And, coupons help them feel that way better than a sale.
Reasons to Use Coupons
As coupons continue to be an inexpensive form of marketing, nearly half of all retailers reported offering consumers some form of bonus coupon program. This means your competitors are probably utilizing coupons in their marketing plan and maybe should you too. Other reasons to use coupons include:
- To increase the number of new customers
- To increase sales of a specific product
- To increase branding and awareness
- To reward current customers
- To entice return to former customers
- To create an opportunity to Up-sell a more profitable product
- Highly measurable form of marketing
How to Use Coupons in Promotions
Coupons should motivate the consumer to not only purchase the product but to take notice of the brand. A well-designed coupon offer focusing on one particular product or service can generate a short-term boost in traffic to most retailers. While only a small portion of coupons may actually be redeemed, establishing brand awareness is one of the long-lasting effects of a coupon promotion.
Before starting a coupon promotion, be sure the offer is right for your market. Not every type of product, or retailer, can benefit from adding coupons to their marketing mix. In some instances, coupons may actually lower the value of a brand.
Popular Coupon Distribution Methods
There are a variety of coupon delivery channels are available to reach a retail store's target audience. Some of the more popular coupon distribution methods are:
- Electronic delivery
- Free-standing insert
- Instant redeemable
- Direct mail
- Shelf pad
- On pack
Elements of Effective Coupons
Saving money isn't enough incentive. Like any promotional advertisement, coupons should be designed to entice the consumer to actually redeem the discount. If the coupon is being distributed via bulk delivery, it must stand out among many other coupons. Here are some specific elements a retailer should keep in mind when creating a coupon.
- Clear, concise text detailing offer and terms
- Face value
- Product image
- Proper bar code, if relevant
- Any necessary legal copy
- Expiration date
- Company name & address
- Offeror tracking code
Delivering on the Coupon in Store
One area we often overlook is to prepare the store to be able to deliver on the coupon's promise. Too often the first time a chaise sees a coupon is then the customer hands it to them. Never use a coupon without thoroughly training your employee on it first. When you don't, the customer experience is ruined and often times the customer is left feeling like they are doing something wrong.
Role-play with your sales team (with you as a customer) trying to redeem the coupon. Ask them the types of questions the customer will ask.
Evaluating a Coupon Campaign
A coupon campaign requires testing and measuring. The use of tracking codes printed directly on the coupon, or coded in electronic delivery, allow a retailer to see which customers redeemed the coupons and where those coupons were found. Evaluating the method the coupon is delivered along with the coupon response, product sales and profits can help determine which promotion or coupon works best for your audience.