A recent study from the Journal of Marketing found that nearly 70% of shoppers use coupons when shopping for new goods or services. Meaning the impact of coupons on business volume and revenue can be significant. According to the study, coupon users account for an average of 14% of sales in comparison to non-coupon users who make up around 11%.
This may not seem like much but think about it this way. 10 new customers at an average sale of $100 would mean $1,000 in sales. Whereas 20 new customers at an average sale of $50 would mean $1,000 in sales as well!
What Are Coupons?
Many consumers are familiar with Coupon Management System, but small business owners might be wondering: What are they? How do they work? Where can I find them? And, most importantly, how can I use them to benefit my own business? With so many coupon-related questions flying around out there in cyberspace, we thought it was about time for an FAQ (frequently asked questions) post! We’ll address some common concerns small business owners have about coupons.
Help you understand how to best make use of coupons to market your own business and layout a simple plan for utilizing coupons as a business tool. This isn’t intended to be an exhaustive guide on everything you need to know about coupons—just some basic information that will hopefully answer all those burning questions.
Types of Coupons
For example, if you’re a small business owner with a solid customer base, you might try incentivizing new customers to take home more products by offering a coupon for 20% off their first purchase. This helps entice customers to shop with you again and can grow your customer base by including more people who haven’t yet tried your products. If you have an excellent rewards program already in place, think about how it can be expanded or amplified through coupons.
For example, if you give customers points when they spend money at your store and they can redeem those points for deals on future purchases, consider giving them points when they use coupons or discounts so that there are even more opportunities to collect rewards.
Which Type is Best for Your Business?
You have a number of options available to you when it comes to coupon and deal sites. Here’s a rundown of what’s out there: Daily deals sites: These are sites like Groupon, where customers purchase coupons for deeply discounted products or services that expire after 24 hours.
These can be great for new businesses looking to build some initial buzz and attract new customers without having to heavily discount their products or service. But, be warned, daily deals can also be risky. In one study, nearly half of all daily deals failed and less than 25% showed any sort of profit after factoring in things like customer acquisition costs.
How Can We Use It?
Since coupons are a form of advertising. There is a good chance that they can be used to help promote new businesses. The largest and most well-known coupon provider is Groupon. Which offers huge discounts on various products and services in specific markets. Using coupons from these organizations as an advertising tool for new businesses has yet to be analyzed thoroughly. But it is possible that we could see a similar impact on new business profits. As we’ve seen for established companies.
After all, people who have never tried a business before have no prior experience or preconceived notions about how good their products are. They may give you a try if you offer them something exceptional at an exceptional price.
Things to Keep in Mind
If your business is new and you want to use coupons, do so with caution. If a customer has to spend money on one product before they get any kind of discount on another. There’s a good chance that they won’t come back for more. And if they do, it could be years down the road. You need to build some goodwill and capital with customers before you can rely on coupon discounts.
In addition, not all coupons may create equal; free shipping is a much better deal than half of an item. Be sure to keep your costs in mind when considering coupons. If you have to reduce your profit margin significantly, it may not be worth it.
Saving money is a common goal of many people—especially in today’s economy. Still, many don’t think they have enough extra to put toward coupons. Much less consider how coupons could impact their business. In fact, coupons can help businesses cut down on expenses while bringing in new customers at the same time.
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