In 1887, Coca-Cola created one of the first coupons, and it changed the marketing world forever.
By 1913 Coca-Cola had redeemed 9.5 million “free drink” coupons. Compared to the nine bottles they sold a day in their first year, this was huge. These coupons helped make them one of the biggest brands then and now. It increased the company’s publicity and promoted the product. All for the price of free.
Today, 90% of customers use coupons – and that is largely due to tech advancements. Now people can receive them in emails, text messages, on websites, and more. But do coupons really work? The short answer is YES. Coupons, deals and special offers drive new customers, increase brand loyalty and (when used properly) can increase the overall lifetime value of a single customer.
But most of the businesses we talk to are afraid to discount a product or service. After all, if your product is great why would you lower your cost to get people to use it? While it may seem counterintuitive to give a discount to grow your business, but when used correctly, coupons do just that. Read on to learn how.
Coupons Drive Revenue
With coupons, a customer is more willing to try a new brand or product. In fact, 80% of customers are more willing to buy from a new brand if a discount is offered. A discount convinces first time buyers to make a purchase.
A customer is more willing to buy from a new company with a coupon because it is seen as little to no risk. There is value in saving money and purchasing a product at a discounted rate. Once a customer comes to your store, they are more likely to buy non-discounted products. This is a common strategy used by grocery stores every day!
Coupons are also great at bringing back inactive or old customers. By reintroducing the customer to the brand with a discount, they’re more likely to make another purchase from you. 91% of buyers said they would visit the same retailer again after redeeming a discount.
Coupons Build Your Customer List
A coupon is a great way to get a customer to sign up for an emailing list. By offering a discount for their email, it helps build a customer file. With digital discounts especially, you can grow a larger social media following and increase the success of your email marketing. As a matter of fact, emails that feature a discount get retailers 48% more revenue than other promotional messages. Coupons can also help create a referral program and increase your customer list, yet again!
Coupons Help Inventory
If a product isn’t as popular as initially thought, a discount can fix that. If a product has been ordered in excess, a discount can fix that. 69% of shoppers said a coupon influenced whether they made the purchase. Coupons can encourage customers to add a specific item to their cart which can help remove excess inventory and out of season goods, or help sell a higher margin product.
Another 28% of customers are willing to buy a costlier product when offered a discount. Coupons help inspire customers to make a purchase.
When To Coupon
Coupons support providing quality products and fair pricing. To make a profit by using coupons, you need to calculate whether the discount will make a difference in your profit margin by introducing new customers or bringing back old customers. The key to getting coupons to work is to use the discount as a way to begin long-term communications with the new customer through social media or email.
With more than $91 billion dollars worth of coupon codes expected to be redeemed by 2022, it’s time to use this tactic to your advantage. Businesses who offer coupons have a competitive edge over the competition.
If you need help incorporating coupons in your marketing strategy, contact us today!
