From the June 1997 issue of Entrepreneur

Recently I received two letters in the mail. One was in a standard white envelope. The second was in a putty-colored envelope with brown speckles all over it. It looked as if mud had been splattered on it. Printed in one corner was the line "Time for a wash?"

This mailer caught my interest, and I set aside the ordinary, impersonal white one. Inside the "muddy" one, I found a personal letter about a new automatic car wash in my area. It explained features and prices, and included a small card with a map, phone number and prices, plus a colorful coupon good for one free deluxe wash in the next 90 days.

I was hooked. Since my car typically looks like something found in an archaeological dig, I couldn't wait to use the coupon. That little piece of paper spurred me to make the extra effort to seek out a new business and use its service. And, as a result of the owner's extra effort to attract me, I've become a loyal customer.

The other letter? Oh, it was announcing a new dry cleaner in the area. It was obviously mass-produced and offered me no incentive whatsoever to switch from the one I now use.

The lesson: If you want to attract and keep customers, you need to offer an incentive. Especially in a new business relationship, don't expect the consumer to buy something sight unseen. A coupon for a free sample or service, or some useful item related to your business, can be just the push a reluctant consumer needs.

Coupons can help you reach many goals: to help introduce a new product or service, to increase repeat business, to fend off the competition, to reinforce an advertising campaign, or even to soften the impact of a price increase. Traditionally, coupons have taken the form of newspaper inserts, packs of assorted offers, individual direct-mail pieces, in- or on-package offers, and even handouts at specific businesses.

One of the most popular and easiest ways to use coupons is through direct mail. This is a powerful way to call attention to your business. It is especially good for occasions such as grand openings, remodelings, the addition of new departments or facilities, anniversary celebrations, or the introduction of new products or services. It is an enticing way to invite both current and new customers to visit your business.

Some tips to keep in mind:

1. Coupons can be offered as a "thank you for buying from us" or "stop by and learn about us" message.

2. A coupon can be a single item for a one-shot promotion or be used in combination with other offers. Whatever the case, the value must be substantial enough to attract customers. Better to make the value too good than to err on the side of making it seem cheap or insignificant.

3. Use coupon promotions sparingly. They wear themselves out if overused.

4. If you aren't sure of your creative abilities, get professional help designing your coupon. Be sure the coupon says what the offer is, how long it lasts, and the terms for redemption.

5. Color-code your coupons if a variety of groups will receive them. For example, if you're mailing to six different ZIP codes, color each coupon differently so you know how many were redeemed from each area.

Direct mail isn't the only way to distribute coupons. They can also be run in local papers or, in the latest twist, distributed via the Internet. With more and more people going online every day, why not make the most of this "virtual" Sunday paper?

If you already have a Web page, design your offer so people can e-mail you to receive coupons. Or consider using a Web coupon service, which offers coupons in booklets by mail or online for consumers to print out themselves.

Whatever method you use, why not try your hand at a coupon promotion and see how it enhances your redeeming qualities?

Contact Source

Leann Anderson is the owner of Anderson Business Resources, a Greeley, Colorado, company
specializing in customer service, marketing and high-tech etiquette. E-mail her at landerson@ctos.com.