The following is an expert from Marc Gordon’s book The Edge Factor:
The job of any coupon is to either get someone to purchase something they would not otherwise or to encourage them to buy more than they normally would. This can be done by offering a discount on a single product, a discount on multiple products purchased together, or a free product either alone or when purchased with others.
When done properly, a coupon campaign can bring in new business faster than almost any other type of campaign. Here are some of the reasons I am such a fan of coupons:
Control: You have the ability to choose what the coupon is for, when it can be used, how it can be used, and who gets to use it. No other marketing tool give you this much control.
Event specific: Coupons can be timed to coincide with holidays, sporting events, store openings or virtually anything that people can relate to. This allows you to create a “hook” that gets people’s attention.
Distribution: Coupons can be mailed, delivered door to door, piggy backed with an outside marketing program or publication, given out in person, given out at events, emailed, or inserted in a newspaper or magazine. With so many options, it’s easy to find the right method of distribution to match your budget while reaching your target market.
A compound marketing tool: Instead of giving out coupons directly to new or potential clients, they can be used as an incentive for people to visit your web site. Visitors would be able to download a coupon and
learn about your company or products at the same time. Best of all, this reduces your costs by eliminating printing and distribution costs.
Mass appeal: Everyone like to save money. And the idea of saving money on something they already need (like food for example) will often be enough of an incentive to get them to try something new.
Incentive or reward tool: For many companies, coupons are given out to select clients based on their spending habits. A coupon can be given to a client to encourage them to purchase more than they might otherwise. This incentive is common among industrial or wholesale businesses. For retail, coupons can be used as a way of saying thank you to clients that have purchased a specific product or have spent a specific amount over a certain period of time.
Customer Service: You will eventually be faced with a dissatisfied client at some time in your professional life. And while circumstances may not allow for immediate compensation, a coupon or voucher will show that you are serious about keeping them as clients.
Every industry is different and as such, so will the coupons. A coupon for an upgraded car wash will not have the same monitory value as a coupon for a free session at a tanning salon. However the intrinsic value may be higher. Someone who drives a nice car but doesn’t like to tan might find the car wash coupon more useful than the free session.
Where most coupon programs fail is in the perceived value they offer. While 50 cents off a box of cereal might seem attractive, 50 cents off a steak dinner is virtually an insult. What’s important is that any new coupon program be tailored to meet the needs of the business while appealing to the wants of the market.
Marc Gordon is a professional speaker and the owner of Fourword Marketing, a branding and marketing firm located in Thornhill, Ontario. Fourword specializes in helping businesses create a brand identity and developing effective marketing campaigns. Marc can be reached at (416) 238-7811 or visit www.fourword.biz.