When marketing with coupons, there’s always a risk of overspending on the savings. It can be tempting to push the coupons until you’re actually losing money, until you’re operating at a loss. Coupons only work as a strategy when they work as a strategy.
The end goal of a coupon campaign is to make less money per sale, but to make more sales and to turn on new customers in the hopes that they’ll actually become regulars, and not that they’ll just use the coupon before never buying from you ever again.
Can you scale quickly?
Some small businesses are a better fit for coupons than others. Coupons are obviously great if you’re selling eBooks. If your staff has to pick up the pace and make more hamburgers after a promotional effort, then you need to consider if they’re up for the task. How easily can you scale what you do?
What can you afford?
For those with a lot of money on hand, it’s not a bad idea to actually break even on every sale just to make sure more people are trying things out. If you don’t have the funding to fall back on or if you can’t foresee a high conversion rate, on the other hand, then you may simply be wasting effort. Be careful in pricing your coupons.
Consider all the outcomes
A big mistake you can make with a coupon effort is to allow users to double up or use multiple coupons to effectively take you for all you’re worth. Make sure that you’ve written the appropriate disclaimers on all of the coupons, and that people won’t be able to use them along with other coupons or double up in order to take a bigger discount than you’re able to afford.
Educate Your Staff
None of these rules will help you if your staff doesn’t know what they’re doing. Make absolutely certain that they know what sort of coupons to accept and how to accept them. A staff that doesn’t know how to run a coupon campaign puts you in a position where you might as well be giving things away for free.
Accept Competitors’ Coupons, but Carefully
It can be a great promotional tactic to accept your competitors’ coupons, but a disaster to accept them without prejudice. Don’t accept all of your competitor’s coupons, or you may be paying out the nose for a promotion that they can afford but you can’t. Offer to accept competitor’s coupons but make sure to double check expiration dates and limit what those coupons will cover.
Running a coupon campaign doesn’t have to be complicated. There are a lot of pitfalls that can get you if you don’t plan ahead, but by and large, if you plan according to what you can afford and according to the market you need to reach, it shouldn’t be impossible to come up with a campaign that works for you and your customers.