With 92 percent of consumers identifying themselves as coupon users, it’s no wonder retailers of all sizes are cranking out millions of discounts each year. And while these discounts are a proven way to attract new customers and boost sales, the complete saturation of coupons in the marketplace makes it hard for entrepreneurs and small-business owners to make their offers stand out from the crowd.
Fortunately, there are several coupon tactics that work every time, no matter how big your business or what product you’re selling. So the next time you’re about to run a big coupon campaign, keep these ideas in mind for maximum impact:
1. Leverage the psychology of discounts: Although economics tells us that shoppers act in the most rational way possible, it fails to mention that shoppers also don’t like to do math. This means that you want to word your offer to make it seem as valuable as possible. For example, if you’re selling an item for $250, offering “30 percent off” may seem less attractive than “$75 off,” even though they’re worth the same dollar amount. As you create and promote new coupons, test different variations to find the right mix for your customer base.
2. Create urgency: 83 percent of shoppers admit to making an unplanned purchase when presented with a promotion, so take advantage of this behavior by creating a sense of urgency with your offer. You can do so by putting a deadline on your coupon, such as a “12 hour flash sale” or offering a one-time daily deal. Another tactic is to put a limit on the coupon itself, such as “first 50 customers receive 20 percent off.” Regardless of approach, making the offer seem scarce can greatly boost redemption rates.
3. Provide a sense of exclusivity: People like to feel like they’re receiving something that others aren’t, including coupons, so make your customers feel special by making discounts seem exclusive to them. Some tactics to achieve this include: offering a social-exclusive promotion to your Facebook and Twitter followers, sending a deal via email to your most frequent customers and allowing customers to enroll in a loyalty program. Part of this approach requires careful segmentation and scheduling, so as a bonus tip, start thinking of how you can incorporate exclusivity into your campaign sooner rather than later.
4. Personalize and individualize coupons: This approach can be a bit more difficult to implement, but it’s one of the most effective. The idea here is to deliver the right coupon to the right person at the right time, meaning that you should add an element of personalization to the coupon experience. For example, offering a coupon on a bottle of face wash wouldn’t make sense three days after purchase, but would be well-received four to six weeks later when the customer is almost out of the product. Similarly, you can offer coupons on related products, such as a percentage off a facial moisturizing cream. Or, if you’re looking for a much simpler approach, working to personalize your emails is a good start -- even something as basic as including a customer’s first name in the message can make a difference.
5. Focus on coupon distribution: No matter how clever or valuable the coupon, if your customers don’t know about it, they can’t redeem it. This means that you should pay particular attention and invest ample time in creating a coupon distribution strategy. Common and effective outlets include social media, website placements, traditional advertising and email. One particular benefit of email distribution is that you can segment your lists to deliver various coupons to targeted audiences, and even test the effectiveness of specific coupons on different groups. Whatever the case, create a plan of attack in making your coupons as public as possible. Go big or go home.
Here’s one final piece of advice: never arbitrarily set discounts. Yes, it may be easy to create a simple “10 percent off” coupon, but if you don’t perform the due diligence of studying your overall costs and profit margins, you can quickly find that an otherwise successful coupon campaign might risk putting you in the red.
In sum, if you crunch the numbers, dedicate some time to planning and follow the five principles listed above, your coupons will better break through the clutter, and more importantly, draw customers to your store to put more money in your pocket.