Sponsored by Piucodicisconto.com:
Successful business models require attracting a loyal customer-base. To reach the point of getting customers who are loyal, you need to cater your message to a large audience at first, don’t you? This calls for promotional campaigns. Many organizations, new and old, use coupons as a way of attracting people’s attention towards what they are doing.
Coupons can have a fantastic or an adverse effect on your organization. The outcome of any kind of promotional work regarding your business depends on your strategy. You need to know what could go wrong, which coupons are perceived as rip-offs, and what the loop-holes are. With that in mind, here are the pros and cons of using coupons as a promotional campaign.
1. Cleaning out Inventory
Coupons attract first-time buyers, and it’s the easiest way of unloading your existing stock of products. You could make space in your warehouse for new products by giving away the old, not-in -trend-anymore products at a lower price.
Use powerful phrases about your discounts. If you are successful in packaging your message properly, you’ll acquire and retain customers.
2. Attracting New Customers
Every marketer is aware of the lifetime of each product line. While some products are profitable forever, others fade away after a certain period of time. You know which products are profitable to you and which are not.
Every new product line means a new set of customers from a different audience. Coupons will help your new crowd ease into using the new product, giving them a sense of having control in the deal.
3. Introducing New Brands
When you are introducing a new brand, or a new product, it’s very difficult to get up to speed in the beginning. Coupons and discounts help you gain much needed attention. Another advantage of using coupons is that you can advertise your new line of products while giving discounts on the old ones.
4. Quick Infusion of Cash
Coupons tend to create a buzz among customers who regularly frequent your store, office, or website. Frequent visits from loyal customers translate into a quick inflow of cash, which is the main reason for dollar stores giving out coupons and discounts so often.
Selling Non-discounted Products
When you have diversity in your product portfolio, you could offer discounts for specific products which will attract customers to your store. Later, you could sell non-discounted products along with the discounted ones to the same customer.
Remember not to give discounts on cheap products only; they are already cheap. Try to give minimal discounts on premium quality products. Chances are customers who ordered discounted products would want cheap products on the side as well.
Now For the Downsides
1. Increase of Cost
Coupons and discounts always mean less money for the seller and more money in the wallet of buyer. As you are using coupons for promotions, you need to balance your costs and revenues out by always including the cost of giving out coupons and discounts in your performance and revenue calculations.
Due to lack of good strategy and realistic predictions, business owners end up offering discounts on products that customers would keep buying for their regular prices anyway. You could cut this loss by giving out discounts to particular target groups, like first-time buyers, the elderly, school-goers, residents of a particular geographical location, etc.
3. The Proverbial Goal in Own Post
Often people value products based on their prices. That means when you offer lower prices and discounts, you might tarnish your brand image by coming off as cheap.
Go through some couponing sites like piucodicisconto.com or retailmenot.com to learn about how other brands use coupons and offer discounts to sell their products. You need to fix your strategy so the perceived value of your service in people’s minds is not hurt when they see your coupon offers.
4. Alienation of Regular Customers
Regular customers might feel left out of the reward group if you are giving the coupons out to only first-time buyers. Like every business decision, offering coupons has to be done in ways that satisfy the needs of your customers – both new and old. You have to cover the entire customer base without damaging anyone’s sentiments towards your business.
5. Lacks Sustainability
Coupons are a promotional strategy, so it is important to bear in mind that there will be a group of customers who will buy products with discounts only. This means they might not come back to your store once the discount or coupon time is over. That means coupons are clearly not a long time promotional strategy.
Finally, you need a crystal-clear idea regarding your profit margin to decide the amount of discount you are going to give out. If done right, coupons could be an extremely effective marketing tool for your business.