Fighting costs, launching new products and nudging prospects into customers are the most common reasons companies are looking into e-coupons. But are they right for your business?
Coupons have traditionally been a fairly effective method to pull new customers or push a new product in the market. Since they cut into sales revenue, it's important that they be tightly focused -- directed only at those who are new to the product. Offering discounts to existing repeat customers simply cuts into revenue without generating new sales. Add in the printing and distribution costs, and now you've really cut into your bottom line.
Printed coupons are targeted by demographic and/or geographic market segments by placing them in the appropriate publications (or direct mail lists). This leads to effective coupon use -- taking on the printing, distribution and loss of revenue costs only for those new to the product. It isn't always easy. For example, a popular McDonald's campaign aimed at getting school children to try their new hamburger issued coupons that would offer free fries with a purchase of a hamburger. Cashiers found business people using it, which cost more than it helped -- Mc Donald's business market traditionally pays full price quite happily. Chalk one up for the "how not to do it" school of business.
E-Coupons Are Different
E-coupons offer some tremendous advantages over traditional coupons -- they are virtually cost-free. Fancy promotions aside, all you really need to offer an e-coupon is a line of text on your website (or email newsletter) stating "Print this to get 10% off XYZ." It doesn't require a special website, special design firm or other fancy trimmings. The customer absorbs the cost of distribution and printing by virtue of their paid Internet access and home printer. That's a lot of cost you no longer need to absorb.
But what about limiting coupons? It is possible, these days, to purchase an email list and marketing data from (reasonably) reputable advertising firms and quickly pull out a demographic or psychographic. Targeting this group by email allows you to make effective use of your e-coupons. Supposedly. Many a firm has done this, thinking they've won. The failure here is in thinking of e-coupons as single, printed items. Coupons cannot be easily copied by most consumers -- e-coupons can. Without drastic measures and sophisticated e-coupon support in your shopping cart software, e-coupons cannot be limited.
Adjust Your Thinking
So you can't really limit them online. By adjusting your thinking you can still effectively use them.
First, try to target your demographic -- new customers. Placement can be a major factor in who reads a coupon. Take, for instance, the bottom of a page full of detailed information about a product. An existing customer isn't going to read all the way through a huge page of details they're already familiar with. But a new prospect will. By placing your coupons at the bottom of this type of information page, you've effectively limited their distribution to those who will take the time.
Second, remove the big, obnoxious buttons that say "CLICK HERE FOR COUPONS!!!!" from all your web pages. Studies show that most people currently searching for e-coupons are the same ones who currently use traditional coupons. There's no need to pander to an audience that you're already hooking into with printed coupons. Place your offers carefully for your target audience and let the bargain hunters find you the old-fashioned way.
Third, realize that coupons are a closer and treat them as such. A prospect who has just read all about your amazing new mousetrap is still in an evaluation frame of mind. Presenting a carefully worded e-coupon at the end of that evaluation should shift that prospect into decision-making mode. Hopefully a decision to go try your product.
Fourth, never forget that the excitement and interest your web page has generated in the viewer won't last long. Make sure your e-coupons have expiration dates and update them (and the offers) frequently. This may mean you'll have to take the reins from your web design firm, depending on their costs and update policies.
Finally, remember that your e-coupons may be distributed far and wide -- so don't give away the store. Make your offers simple but useful. Some of the most effective e-coupons simply offer a related item free as a promotion. What small accessory could you offer for free that might tip the scales for your prospects?
Caveat Vendor
Let the Seller beware. An important consideration with offering e-coupons is the number of counterfeits currently available online. Tech-savvy consumers have created hundreds of variations on e-coupons to generate offers that were never actually offered. Coupons are even bought and sold on e-bay for free items, discounts off items and upgrades -- and many of them are fake. If you are offering e-coupons, post a copy of them for all of your sales clerks and be sure your staff is up-to-date on e-coupon policies. You're already giving the consumer a discount; the last thing you want is to give them the store.