Are Coupons a Help or a Hindrance to Your Business Building Strategy?

By: Larina Kase

One of the top questions that comes up with marketing is: How do customers perceive coupons? Let’s say you regularly send out coupons by email and you’re trying to decide how your prospects, customers, or clients view the coupons.

Offering a coupon can be seen as either advertisement or providing value. From a psychological perspective, there are two primary considerations:

1. Frequency
2. Breadth of Audience

Frequency

The more something is offered, the less it is valued. When you offer coupons too frequently, you lose the ability to create sense of urgency. People figure, “They send this every week, so I’ll just buy it next week.” Then they say the same thing each week and you’ve lost a sale.

On the other hand, regularly sending out coupons can be very smart. Bed, Bath & Beyond sends 20% off coupons in the mail pretty regularly and I almost always use them. I’ll wait to go there until I have a coupon but I get them often so they don’t lose a customer.

The key is knowing how often people buy what you sell. Because Bed, Bath & Beyond offers so many items, there’s always something I need from their store and the frequency works out well. For professional or creative services, on the other hand, sending coupons out every couple of weeks is unlikely a smart strategy and can undermine the perceived value of what you provide.

Breath of Audience

The more precise your target audience, the more value they will receive from your announcements and coupons.

Let’s say that you’re on the list for a major retail store of home furnishings. They email you every week with a coupon for something specific in their store. The chance that you need a new couch or rug each time they email is very low. Their emails, therefore, are advertisements and rarely provide value except maybe a couple of times a year when you need to buy home furnishings.

Let’s say on the other hand that you are on a mailing list for parents of children under the age of three. You send out a coupon for diapers or wipes every so often. The people on your list need diapers and wipes, so your coupon offers them real value.

In some situations, such as the Bed, Bath & Beyond example noted above, coupons can work well for a breadth of product offerings and a broad audience. In these situations, other factors about your target audience will become important, such as geography (how close your customers live to a store). They would be smart to target their regular mailings on customers who live within 5 miles of a store and would be more likely to stop in when they receive a coupon.

How have you successfully (or unsuccessfully) used coupons?