Coupons work on consumers’ desire for bargains. With a coupon they can get something at, say 20% off. Businesses have found that coupons are an excellent way to get new customers, or make existing customers buy more. The returns in the form of increased sales are typically much more than the loss they suffer.
Coupons might offer a straight discount on price, or offer free shipping, or promise a freebie when you purchase something, and so on. They are delivered through mail, newspapers, flyers delivered door-to-door, the Internet and even mobile devices.visit my online https://www.coupiv.com/ the effort.
How Do Coupons Promote Business?
If you are a manufacturer, you can issue a discount coupon on a countrywide basis. The coupons will carry your logo and an excellent photograph of the product, in addition to the discount offer. The consumers who use the coupon thus become aware of your brand and product. Additionally, bargain hunters flock to the stores selling your product, leading to increased sales of the product.
Retailers distribute coupons in areas where they have a presence. New customers visit the store to take advantage of the offer. When they are at the store, they buy other things that they need, priced normally. If this first experience was a pleasing one, these customers might become regular customers.
Coupons constitute an excellent business promotional strategy.
How Do You Get Coupons to Consumers?
Coupons can be sent to customers through mail, newspapers, door-to-door delivery, on the Internet or mobile devices. The mail and door-to-door options involve expenses for printing and distributing the coupons. Publishing it in a newspaper or magazine involves advertisement costs. Internet and mobile device options save on printing costs.
The Internet option might involve just providing a promotional code which the consumer uses to get the bargain. Where it is in the form of a traditional coupon, the user has to print it out and surrender the printout at the sales point.
What Is Coupon Fraud?
Coupon fraud involves misusing the coupons in ways not intended by the issuer. For example, Internet coupons might be printed multiple times. Promotional codes might be posted to freebie sites. In such cases, the volumes of coupons used will not fit normal patterns assumed by the issuer.
Paper coupons might be counterfeited, resulting in more coupons being surrendered than what the company had issued.
One report estimates the loss from coupon fraud at $500 million in the US alone. The Institute of Sales Promotion has published a guide for those planning electronic couponing. The guide will help you minimize the incidence of coupon fraud.
The Cost of a Coupon Issue
A coupon issue has the following cost elements:
- Salaries of staff involved in planning and executing the campaign
- Cost of printing and distributing the coupons
- The value of the coupons, i.e. the profit lost by making the offer
- Cost of processing the surrendered coupons
Coupons surrendered by customers at sales outlets have to be sent to the manufacturers concerned (where the issue is made by manufacturers) so that they will reimburse the coupon amounts to the retailers. This can be a significant cost element as coupons could number in millions.
Despite the costs, coupons have proved a preferred promotional method for businesses, as indicated in the coupon trends report. It is however for the business to compute the estimated return from a coupon issue. The return can even be increased brand awareness.
Coupons are a great way to increase sales and even build brands. However, you have to handle the issues of coupon fraud, incidental costs and management of the whole campaign in a systematic manner.
As a chartered accountant with business management qualifications and decades of exposure to business in senior to top level positions, Gopinathan helps small to medium businesses with new business start-up, business performance improvement and marketing. He uses structured business modelling techniques to help with all these, and has launched a business support website to provide the help in a convenient manner irrespective of geographical distances and boundaries.