How much should you be spending on offers campaigns?

A guide to stop making losses on your coupons

Marax AI
Jun 11 · 4 min read

Ever since we started helping companies run offer campaigns, the question that we get most often about it is how much does it cost?

Whether you are the Co-Founder of the latest E-commerce website or run a digital marketing agency, giving out offers is a great way to attract and then retain customers. With most of the industry still relying on email marketing as the primary way to get ROI, running offer campaigns is the modern way to reach out to customers and ensure engagement.

The overall picture: how much are companies spending in 2019?

There is no one size that fits all companies. Depending upon the size of the company and type of product or service provided, companies have been spending anywhere between 4% — 16% of their annual revenue on promotional marketing through offers.

Of course, it is no surprise that B2B services tend to spend much less on marketing than they do on sales, while B2C businesses often allocate big portions of their revenue to offer campaigns.

We have seen companies spend $300-$500/month, to $5,000- $10,000/month and still be successful.

As a rule of thumb first answer these questions before starting out:

1. How much will running an offer campaign benefit your type of business?

2. How much can you afford?

If you’re a pharmaceutical company, marketing through offers is not your answer. On the other hand, if you have a new food delivery service, standing out amongst the competitive landscape requires significant investment into offers to woo new customers and please existing ones.

Similarly, if you’re a startup that isn’t profitable yet, don’t spend a bombshell on offers campaigns. Instead, target early adopters and take up a more handsy on-the-ground approach.

Set some goals

A lot of people make the mistake of starting an offers campaign without actually deciding what they want from them. Before starting, set the number of users you want to onboard or retain. Your budgets will be strongly dependent on how ambitious your figures are.

If you’re unable to decide the exact numbers however, don’t worry. Set a ballpark estimate at first and then be flexible with your goals from there.

Decide on an appropriate channel

So where should you be running offers campaigns, you ask? With so many options to choose from, it is no surprise companies are often in a dilemma.
Digital marketing channels have been on the rise over the past decade. Push notifications, email marketing, content marketing and SEO are all fast replacing traditional mediums of marketing.

To answer the question, you should know where your customers live. Where are they most likely to see your product. If you’re selling sneakers, look for where sneaker-heads hang out: on social media groups, enthusiast websites or offline communities.

Costs of running offer campaigns on each channel can vary widely, so choose wisely.

Social media marketing

One of the biggest marketplaces for brands is social media now. Easy accessibility means companies can reach large audiences with little effort.

One of the factors which makes social media marketing so lucrative (and risky) is the ability to set a budget, duration and cost per click (CPC). For spending the same amount of money, one company may be able to drive traffic while another might not get any at all.

Remember, social media marketing isn’t for everyone. Just because it is trending doesn’t mean it is a guaranteed way to attract customers. Maybe your target audience just doesn’t live on social media.

What kind of offers are you running

It’s not just about how much budget you allocate to running these offers, it’s also about what offers you’re running.

Offers come in all sizes and shapes: combos, BOGO, subscriptions, timed offers, seasonal offers, value added offers and so on.

If you run the wrong kinds of offers, no matter how much budget you may allocate, it is not going to work.

Don’t be afraid to try, try and try again

Don’t be afraid to experiment with the methods that have been mentioned above. Some campaigns will work and some won’t. You might have to change the way you run your campaigns. Tinker around with the types of offers, budget campaigns and marketing channels.

A/B testing is an effective way to test out the effectiveness of your campaigns. In short, it is a way in which you can test 2 variations of your offers marketing campaign with half of your customers to see which one has better ROI.

Remember one thing: You might spend $10m on a campaign or $100, it’s about how effective you make your offer campaign that matters.

Want to know more about how you can optimize your offers-marketing budget?

Marax AI

Written by

Marax AI

Send fine tuned discounts to maximise conversions with minimum spend using AI

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