Coupons in Retail
A promotional tool in the form of a document or electronic graphic that can be redeemed for a discount when purchasing goods or services. Coupons are generally issued by manufacturers or retailers to the consumer and may be distributed through direct mail, apps, social media or other marketing means. A coupon will feature a specific savings amount or other special offers to persuade consumers to purchase specific goods or services or to purchase from specific retailers.
Coupons have become an important and required part of retail. Customers are demanding them now from every retailer. Coupons were originally created as a tool for manufacturers to direct the purchase decision of a customer in a retail store. For example, if you were a manufacturer of crackers, you would create a coupon for your crackers to direct the customer to your product since the retail store may have six or seven different cracker lines. So in other words, you create a "sale" on your item as a manufacturer. And the retailer loves it because the customer gets the discount and the retailer is reimbursed by the manufacturer when the coupon is turned in.
In today's social media-driven world, coupons can be delivered easily and can even be stored on the customer's mobile device for redemption. Apps like Groupon and Retailmenot and Yowza!! or Coupon Shirpa have become incredibly popular with customers.
They store coupons digitally and allow customers instant access. In fact, many apps (even the free ones) will alert you when you come within the vicinity of the retail store.
The beauty of coupons is that they bring value to your brand while protecting your margins. For example, if you run a sale on shoes in your store at 20% off, then every pair of shoes you sell will be 20% off reducing all of your margins by 20%.
However, if the only way to get the 20% off was with a coupon, then only those shoes would be discounted. A huge impact on your margin.
Here are some tips if you are planning to use a coupon in your retail store marketing.
- Always have an expiration date. First, it creates a sense of urgency for the customer. Second, it protects your exposure. You do not want a coupon from two years ago showing up.
- State limitations clearly. People hate fine print, so don't hide it. Also, make sure you use this term "may not be combined with any other offer." One of the biggest coupon mistakes retailers make is not considering this limitation. Without it, it allows the customer to "stack" multiple coupons in an offer and even use them on an already reduced sale item.
- Make the number the biggest. Coupons have to compete for customer's attention just like all other marketing. The number or offer should be the biggest part of a coupon. That is what customers want to know.
- Make it easy. Too many coupons have so many exclusions or require the customer to jump through hoops. If a coupon is a chore to redeem, the customer experience is sacrificed, and you do more damage than good.
- Make sure all your employees are aware and ready. Train your employees. Make sure the first time they see the coupon is not when the customer shows it to them.
The bottom line on coupons, they are a terrific tool. Customers want them, and you should use them. But make them a pleasant experience. Make them something that tells the customer you want them to use them. Redeem them gladly and with a smile. Never make the customer feel like they are doing something wrong by using a coupon.