You’ve got a lot of questions. After all, coupons attract customers looking for bargains, but can they save your small business money? How much will a coupon campaign cost your company, and will you make more sales? Do coupons in general offer a good return on investment?
In many cases, coupons can save businesses money and with the right approach, offering bargains can increase business and drive sales. In this quick guide to coupons and business, we’ll provide you with important tips for getting started, whether you’re looking to make more sales or if you’re hoping to save money on essentials for your business.
Statistics show coupons working in business owners’ favor
Traditional couponing – with its time-consuming clipping and confusion – hasn’t come to a complete end, but many companies have entered the 21st century, successfully leveraging the power of coupons to gain consumers who otherwise might opt for different brands and products.
Spendmenot curated an intriguing list of coupon statistics that reveal some interesting trends:
- Most people – that’s 92% of consumers have used coupons at some point.
- A full 77% of consumers spend between $10 and $50 more than they intended to when they redeem coupons.
- In 2019, consumers redeemed approximately 31 billion digital coupons. This isn’t surprising, since 75% of all consumers said they will use paperless coupons. That number increases by leaps and bounds for millennials: 96% of millennial parents say they like to use paperless coupons and 88% of all millennials said they relied on paperless coupons whether shopping in store or online.
- The value of digital coupon redemption was a stunning $47 billion in 2017.
- 60 percent of consumers love to receive digital coupons, and 38 percent of consumers prefer the ability to get discounts and coupons on their mobile devices. 48% of consumers said they still like to receive paper coupons in the mail. Another 34% said they didn’t mind printing coupons found online. Many consumers used a variety of coupon types.
- A majority of consumers – 68% – said that they feel digital coupons generate loyalty. This tactic generates brand awareness and encourages customers to visit more often.
- 47% of consumers have used coupon apps, including those that offer cash back and points. Groupon, Ibotta, and SnipSnap are popular choices.
- Coupons can help businesses compete, as a full 89% of consumers mention price as the main factor behind their purchasing decisions.
What we’ve learned from coupon statistics:
These trends reveal that customers are excited to use coupons, and many top companies use coupons to their advantage. Some examples of companies who send coupons include:
- Al Fresco
- Aunt Jemima
- Blue Bunny
- Bumble Bee Tuna
- Edy’s Ice Cream
- Eggland’s Best
- Honest Tea
- Land O’ Lakes
Take a look around and you’ll see that many small, local businesses offer coupons and discounts, too. Businesses of every size and type can benefit by offering coupons that entice new customers to try products and services from a company they might otherwise overlook.
Do coupons offer a good ROI for small businesses?
The answer to this question depends on how much an individual business spends on a coupon campaign and how many of those coupons are redeemed.
- Traditional printed and mailed coupons might be riskiest, as they come with fairly high production costs and no guarantee of redemption.
- Ads in newspaper circulars are often worthwhile depending on your local market and demand for the product or service on offer.
- Radio and TV ads may be valuable, but can be fairly expensive upfront.
- Digital coupons can be extremely cost effective so long as your company has a reliable method for distributing them to consumers, i.e. via a coupon app that offers local deals or showcases new online deals.
- If you have a solid online presence, an email list, active, engaging social media campaigns, and other ways of reaching out to consumers, online offers will almost certainly offer a good return on investment. You may need to spend money to boost social media posts and maintain a prominent online presence but if your audience is online and your campaigns are well-designed, you’re likely to enjoy impressive returns.
There are other non-tangible ways coupons benefit small businesses. Register Tape Network mentions that a full 60 percent of consumers actively hunt for coupons, and 95 percent of consumers have a favorable opinion of coupons.
With coupons, a small business can:
- Get new customers in the door (or through a website’s virtual doors!)
- Compete with similar businesses by offering better deals
- Entice recent newcomers to visit, before they’ve had a chance to become loyal shoppers elsewhere.
- Convince former customers to return.
- Make more sales on related items, i.e. more food and drinks at restaurants that offer a free appetizer with two entrees.
How your small business can use coupons to its advantage
Coupons are powerful marketing tools, so long as they reach the consumer. The first step to take when deciding how to use coupons and which type of coupons to offer is to consider your target audience, track performance, and make every advertising dollar count.
- Know whether your customers are more likely to keep and use printed coupons they received in the mail or as part of a circular ad, or if digital coupons are more likely to catch their attention.
- Have a viable SEO strategy in place.
- Use analytics to track everything from social media posts, text messages, and emails to see how they perform. This way, your business can fine-tune and make the best possible use of its advertising budget.
- Try digital coupons even if you are using traditional printed coupons. People appreciate digital coupons as they’re easy to redeem, they don’t need to be clipped and brought along, and if your products can be purchased online, they can be used anytime and from any location. In addition, digital coupons are cost-effective as there’s no charge for printing.
- Target your efforts: Coupons can help small businesses move slow-selling items, entice customers to try new things, and let clients know that they’re appreciated. These are just a few examples.
- Offer trials and promote new products and new services.
- Offer gifts with purchases – i.e. “Spend over $50 and receive a free widget, ice cream, etc.” This tactic allows you to decide what you can afford to offer, and helps keep your profit margin in the green.
Be careful not to offer too much of a good thing.
Don’t overdo it. Plan your campaigns and think long-term as you develop your strategy. Unfortunately, coupon campaigns don’t always work the way we hope they will.
For example, when customers know that you offer regular discounts, they’ll often hold off on purchases, and your bottom line will take a hit.
Of course, you might find that frequent promotions play to your advantage: Consider the way Kohl’s leverages its popular Kohl’s cash program to treat consumers to virtual cash that can be spent on their next shopping trip. In some cases, deals like this can lead to exceptional customer loyalty and ensure that you receive plenty of repeat business.
Ways small businesses can offer digital coupons
Before we dig into these methods for getting digital coupons to consumers’ devices, remember that a multi-pronged approach is likely to be most successful. Now that we’ve cleared the air, here are the best ways to give customers access to coupons without spending money on printed materials or postage:
- Send enticing text messages
- Send catchy emails
- Use social media to its full potential
- Use push notifications
- Build an effective website
- Ensure that coupons work with mobile devices and desktop computers alike
When offering coupons, leave no stone unturned. The more options customers have for saving money with you, the more they’ll shop and the more they’re likely to spend. Use printable coupons that digital customers can simply display on their screens when they visit, and take advantage of coupon codes, which can be mentioned or embedded anywhere and tracked to determine effectiveness.
Pro Tip: Test your campaign
Before you run an advertising campaign, ensure that your business is ready to handle an uptick in demand. Be sure that your infrastructure is running smoothly; for example, test coupon codes to make sure that they work before releasing them to eager shoppers!
Have a backup plan for troubleshooting in the event that an issue arises and come up with a way to assist anyone who has difficulty. While aggravated shoppers are likely to abandon carts, those who receive excellent care and consideration are likely to appreciate the gesture and become loyal customers.
Try This: One more way your small business can save money with coupons
Considering the statistic we mentioned earlier regarding 90 percent of all consumers using coupons, it’s likely that you or people in your circle use coupons personally to save money on everything from groceries to hotel rooms.
Here’s our final tip. Save money for your business by utilizing coupons for products and services you need. Some of the most popular – and helpful options to look for include coupons for:
- Search engine advertising, i.e. advertising on Google or Bing
- Trials for software and services you’re interested in trying
- New customer promotions on services such as accounting, building maintenance and cleaning, vehicle maintenance, and more
Whatever products or services your business uses, it’s likely that you can find a promotion or coupon – just search online and see what pops up.
With a pandemic in place that doesn’t show any signs of easing up, people are working to stretch their budgets and make every penny count. When carefully implemented, coupons can help small businesses thrive. Finding your target audience and reaching them where they are and offering irresistible deals are keys to helping customers save and return when they otherwise might not have given your business a second glance. The odds are very good that coupons will prove to be a win-win for your small business.
Emma Williams is a digital marketing expert and experienced business blogger. She is passionate about sharing her knowledge on best business practice, legal advice, and how SMEs can create positive, sustainable change.