Coupons – Still a legitimate strategy for small businesses?
Coupons are among the most common sales promotional tools around. Every day, consumers’ inboxes get stuffed with coupon emails, coupons pop up on commercial sites and households get at least one and sometimes more physical coupon booklets hung on their doorknobs in plastic bags. That’s not counting the many different coupon sites and the brightly colored fliers that arrive daily in the mail.
Old fashioned? Sure. But coupons are still around because consumers use them daily.
In fact, statistics indicate their use is growing, even among the young and tech-savvy:
- More than half of all consumers use a coupon for at least one of every four purchases, says multinational coupon website provider RetailMeNot
- 45 percent of millennials use coupons, says CCG Catalyst Consulting Group, a management consulting firm
- Direct mail media and marketing service provider Valassis reports:
- 88 percent of affluent shoppers use those physical coupons that arrive in the mailbox
- 81 percent print coupons before shopping from a commercial website, email or other source
- 77 percent search for deals in paper or electronic store circulars
- 85 percent of consumers search for coupons prior to visiting retailers, again per Retail MeNot.
Who uses coupons?
Some myths are true. In this case, research corroborates that women use coupons more than men.
Some surveys peg overall female coupon usage as high as 82 percent, men as low as 56 percent. This difference may, however, be more rooted in the fundamental fact that women purchase more goods and services than that they have a predilection for coupons.
The age truism is also true. The older you are, the more coupons you are likely to use. In the 18-24 age category, 66 percent use coupons, a figure which rises to 80 percent for ages 61 and up.
Missouri loves coupons, too. About 81 percent of households use them regularly, well above the 70 percent of households nationally.
(Data above from the Manufacturers Coupon Control Center)
How do I get my coupons out there?
As a retailer, you have many coupon options: Those aforementioned booklets, direct mail, email, newspapers and magazines, handouts and online. However, each method has advantages and disadvantages you’ll need to carefully weigh before committing your precious time and financial resources.
For instance, online coupons are usually cheaper than placing them in paper newspapers or magazines. However, they may not be seen by enough people if the site is a local one. And a site with regional or even national reach will usually charge much more than a local one. Likewise, your local newspaper or circular may charge less than regional ones but won’t serve as wide an area. Email is dirt cheap, but it is wholly ineffective if you don’t have a substantial mailing list. And coupons you have printed and placed in supermarkets and other sympathetic local businesses would be the next most cost-effective method but likely not as successful.
How big should my coupon be?
An excellent question. According to an NCH Promotional Services survey, consumers require a coupon of at least 23 cents before even considering using it. And for a product, restaurant or service they have never tried, that figure rises to 44 cents. This survey also points out that increasing coupon value did not necessarily mean higher redemption rates.
But what about those new buy one get one (BOGO) coupons? (A quick historical note — BOGO is not even remotely new. The English potter Josiah Wedgwood was promoting his exquisite tea- and coffeepots, plates and vases using BOGO as early as the 1760s.) Wedgwood knew what he was doing: a recent study by AMG Strategic Advisors places the number of shoppers who’ve taken advantage of BOGO at an amazing 93 percent. The AMG Shopper Panel found that 66 percent of shoppers prefer BOGO to other promotions. Some of the responses included: “I like free stuff!” and “Seems like I’m getting more.” But not all BOGOs are created equal: meal deals and purchasing multiple items for a discount at a later time are among the least popular offers.
Coupons are a legitimate means of attracting business. But take the time and carefully lay out a strategy and budget before taking the coupon route.
– Inspired by Coupons Still a Solid Small Business Sales Strategy by Richard Proffer, University of Missouri Extension Cape Girardeau County SBTDC.
If you liked this post you might also like: