Tips for successful marketing through coupon websites

Pick the right product to discount

When choosing a product for a coupon offer, marketing specialists suggest that you:

  • select products that have a high profit margin (so that you have room to discount without taking unsustainable losses)
  • avoid offering products that have low profit margins or are very popular (either of which is likely to increase your discount losses)
  • avoid discounting your best products or premium services (which can damage your brand and your full-price sales in the long term).

Some experts also suggest that established businesses should use coupon sites mainly to clear old or superseded stock, or to launch a new product or service.

Target the right customers

Think carefully about who you'd like to attract with a coupon offer. If you discount a popular, everyday product, you're likely to get bargain-hunters who won't become repeat customers. You may be better off discounting a higher-margin product that appeals to a smaller group.

Also, you generally don't want existing customers to use coupons, because that eats into normal sales. To avoid this, some businesses specify that offers are 'for new customers only'.

Minimise your losses, maximise your profit

Many businesses accept a financial loss on a coupon as a trade-off for attracting new customers. However, you can minimise your coupon losses by:

  • setting a minimum spend before a discount can be redeemed
  • limiting the number of coupons that can be redeemed by one customer or household
  • limiting an offer to the first [number of] participants who redeem their vouchers.

Some businesses may even be able to make a profit on a coupon offer. If your costs are low or fixed, you may be able to increase customer numbers without increasing staff or materials costs.

For example, a museum ran a coupon offer that brought in hundreds more visitors over a number of months. While the visitors got a reduced entry fee, the museum was open anyway, and increasing visitor numbers didn't increase costs. In fact, profits rose because most visitors spent money at the museum shop and café.

Expand the sale beyond the coupon

Once a coupon customer visits your business, you have an opportunity to increase their purchase beyond the coupon.

For example, many restaurants offer coupons for a free dessert or entrée, knowing that customers are likely to also order main meals and drinks. Or a garage that offers a free oil-change could encourage customers to add a wheel balance or a full service - at normal or only slightly discounted rates.

Make sure you can cater for a spike in demand

Many coupon offers are designed to attract a lot of customers in a short period, creating a spike in demand. It's critical that you meet demand and create a good impression when coupon customers arrive. Make sure that you have adequate staff, materials and stock to meet the demand that you generate.

Manage the timing of coupon redemptions

Another way to manage demand is to spread coupon customers out over a longer period. For example, you can require customers to phone for an appointment (provided that you have enough staff to answer the phone). You can also specify that coupons are only redeemable at certain times when you aren't already busy (e.g. a nightclub might make coupons redeemable Tuesday to Thursday nights).

Develop strategies to keep new customers

To convert coupon customers into repeat customers, marketing experts suggest:

  • providing a high-quality product and excellent customer service
  • providing a memorable customer experience (e.g. one hair salon offered a glass of champagne to each new customer as they arrived)
  • collecting customers' contact details to add to your database, either from customers themselves, or from the coupon website if it will supply them (make sure that customers give permission for you to have their details, and that you comply with privacy laws)
  • asking new customers to follow you on social media such as Facebook and Twitter (e.g. give every coupon customer a flyer inviting them to 'like' your business on Facebook to go in the draw for a prize)
  • providing incentives for repeat purchases (e.g. a coffee shop gave every new customer a 'tenth cup of coffee free' card )
  • taking a photo or video of the customer enjoying their experience at your business, and posting it on your business's Facebook page (with their permission, of course)
  • asking new customers to review you and post their reviews on user review sites like Yelp.

Learn more about using Facebook, Twitter and Yelp to market your business.

Keep track of coupons

Any business offering coupons needs a system to track redeemed coupons so that they can assess the success of the offer and ensure that each coupon is only redeemed once. Coupon websites offer various systems to track coupons (including unique numbering, online tracking, and apps that allow smartphones to scan and record coupons). Make sure that you know what you're doing, and that all staff are familiar with whatever system you're using.

Assume that coupons will 'go viral'

Many coupon offers 'go viral' - that is, they spread rapidly over the internet as they are circulated and recommended by customers. Your coupon offer may not go viral, but it's best to assume that it will, and plan for a peak in demand.

Do your maths

Do your maths before deciding if coupon marketing is the best way to achieve your business goals.

After calculating the likely costs and returns, some businesses decide that they are better off sending their own offers to customers for free (e.g. via email and Facebook), and keeping all the revenue that they generate. Others decide to invest in another form of online advertising (such as GoogleAds, where you only pay when somebody clicks on your ad).

On the other hand, some businesses have achieved great successes through coupon websites, boosting their profiles and increasing their long-term customer base.

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