Q: How can coupon promotions help draw customers to my business?
For many companies, coupons have become an integral part of doing business.
Whether it’s 25 percent off an item, buy one get one free, or a gift card toward a future purchase, discounts are a way to draw customers, even if it means taking a hit on the bottom line.
But marketing expert Sherré L. DeMao, founder of SLD Unlimited Marketing/PR, based in Denver, N.C., and author of “ 50 Marketing Secrets of Growth Companies in Down Economic Times,” warns that businesses must be smart about the types of discounts they offer.
“I see a huge mistake being made with couponing because too often coupons are done the wrong way because a business doesn’t understand who they are reaching,” DeMao said. “You have to know who your market is and how they view money and use money.”
A business may decide that offering $10 off a purchase may work, but in reality their customers may be more responsive to a free gift with purchase.
The most effective coupons will increase customer traffic without severely impacting profits.
DeMao can list numerous examples of coupons gone wrong. She cites one high-end clothing store that offered customers $50 off a purchase for a referral.
The mistake was that the average purchase was around $1,000, and a $50 coupon wasn’t significant to customers.
“When we changed that same dollar amount to a donation in the person’s name, it just went beautifully,” DeMao said.
Customers often prefer “value-added” coupons to discounts, DeMao said.
One business owner she worked with switched from offering percentage discounts to giving away a free bottle of special wash with the purchase of a lingerie outfit.
The customers responded well, and the business owner saved money because she could buy the lingerie wash at a good price in bulk.
Jack Be Natural, an Internet business based in Ballantyne, regularly offers discounts on its natural baby products.
John Shinas, who owns and operates Jack Be Natural with his wife Stacy Shinas, said that the business does not sell unique items, so they must offer coupons to stay competitive.
“Today’s shopper has gotten very deal conscious,” he said. “They shop around, and I think it’s a necessity to offer coupons to draw in customers.”
John Shinas said they offer free shipping, seasonal discounts and monthly deals, although customers can’t get coupons for nothing.
“You have to earn the discounts,” Shinas said. “They have to like us on Facebook, tweet about it or share.”
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