Couponing, a consumer sales promotion, should be a part of your local online marketing strategy. The use of online coupons, in particular, can drastically impact the effectiveness of existing marketing efforts by increasing the number of people who convert on your website, emails, social media marketing and more.
Online Coupons Make Customers Happy
Online coupons can be used to a) attract new customers who may not be aware of your business and b) connect with existing customers who either need a reminder to come back, or should be rewarded for their loyalty.
In fact, combined with a marketing distribution strategy, coupons are some of the most effective sales promotion tactics available to your small business.
Research suggests a direct correlation between coupons and your brain chemistry that is linked to happiness. People who receive $10 coupons have 38 percent higher Ocytocin levels, 32 percent calmer breathing rates, 5 percent slower heart rates, and 20x less sweaty palms.
And certainly customer satisfaction matters.
Happy customers will share better consumer review on sites like Yelp, FourSquare and Google+Local. They are more likely to come back, sign up for your email list and like your Facebook page. These are all positive outcomes for your business.
Did you know that 60 percent of people are willing to write about a product or service if you offer them a discount?
Choosing the Right Online Coupon for Your Business
Choosing what to offer depends on your local market and what is attractive to your customers.
We like to start with cost of acquisition (COA). How much are you currently spending to acquire a new customer and what is their average lifetime value (LTV) (i.e. the profit dervied from a customer starting with their first visit and ending with their last)?
Generally, theses are metrics that many local businesses don’t track, but can be calculated on the back of an envelope pretty readily.
What would you be willing to pay to get a new paying customer to walk through the door right now?
That is a good baseline.
Then look at how often your customers come back and how much they spend over that time and subtract your variable costs (i.e. the costs associated with every new customer, not your fixed costs like rent). What do your calculations look like?
If you are looking for new customers, you should be willing to pay that much to get them in. Use coupons as the incentive to pay that cost of acquisition. If it’s to increase loyalty, structure it like many punchcards and other loyalty type programs. If you want to increase the customer community you can reach via Facebook, Twitter or email, then make that part of the offer.
What are you trying to achieve with your marketing plan?
Are your Online Coupons Customer Friendly?
On the other side, think about how to make your cost of acquisition (COA) attractive to customers. Is it for a new, exciting product? Is it for early access to something special? Is it seasonally relevant?
What cuts through the clutter?
There is a vast improvement in coupon effectiveness when you offer at least 20 percent off. In the age of daily deals, less than that is more easily dismissed. Customers also like definitive amounts they can value, like $5, $10 or $20 off. They can understand those offers because they have concrete value.
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