Do coupons damage your business?
A lot of businesses choose to distance themselves from coupons because they believe coupons “cheapen” their brand or damage their price value, and they’re kind of right. Those things can happen, and will most definitely happen if they are not careful. Couponing is just like taking vitamins, it’s healthy; but if you take too many, it can seriously damage your health.
The main reason why businesses are using coupons all wrong is because they don’t have a good pricing strategy and they don’t have a clear goal for their coupons.
It is imperative to recognize what kind of product you are selling so you can distinguish your product’s position on this table.
There are many tools and theories you can use in your pricing strategy.
- Price elasticity
- Cost-oriented pricing
- Competitor-oriented pricing
- Marketing-oriented pricing
- Strategic objectives
- Market characteristics
- Willingness and ability to pay
You can find more information on pricing strategies on youtube and other channels. Here is one talk named “The Art of Pricing: What should you charge? by Kevin Smith from the Story Architect.
Once you know which pricing strategy better fits your products you must establish your business goals.
For example, do you have a goal for profit or market share?
Once you know your price strategy and your organization’s goals, you can start thinking about whether or not your business needs to increase short-term sales or not. If the answer is yes; then you can start considering sales promotion strategies.
You can now consider if coupons are a right fit — What exactly is a coupon?
You now know everything you need to know to see if coupons are appropriate for your business. Now you should focus on using them correctly.
A coupon works best if it does not happen often and more importantly, if it doesn’t happen to everyone. Restricting coupon intake and coupon redemption is what makes it effective. Other restrictions or dynamics only render the whole coupon experience useless.
Another important aspect of coupons is serendipity. The more unpredictable are your coupon campaigns, the better they will work. This also helps prevent price value damage, because people will recognize that the coupon they got was luck or a prize for their loyalty. As soon as customers acknowledge a pattern of offer or coupon availability your price value is in trouble.
So, to sum up; if you want to do coupons for your business, consider the following points:
- Pricing strategy
- Organizational goals
- Need for short-term sales
- Evaluate other sales promotion techniques
- Restrict coupon intake and coupon redemption
- Target your coupons to specific audiences
- Don’t use coupons in a predictable way
- Use coupons as a reward for loyal customers
I hope this helps you decide if coupons are a good fit for your business.
Thanks for the read.
To create good coupons you have to have a good pricing strategy from the very beginning, otherwise you’ll find it difficult to create deals that are appealing to your customers. Keep your margins in mind before launching a coupon campaign.
Once you’ve taken a good look at your pricing strategy you can get started with your digital coupon campaign and for that we recommend CircusOffers. Take a look at how easy it is to get started here: https://circusoffers.com
