Marketing | Coupon Pros and Cons

Coupon Pros and ConsCoupon Pros and Cons -The Marketing Challenges of Coupons

Nearly every business has used coupons or discounts at some time. They can actually be a good thing and increase business. There are many coupon pros and cons to think about when starting a discount program.  A recent article in The Network Journal gives helpful information in deciding how or when to offer coupons.

Pros of Using Coupons

Coupons can increase business by attracting new customers and provide loyalty for your existing customers. This can be particularly important for a new product or service.

Coca-Cola was probably the first company to use a coupon — and there is no doubt it led to the successful launch of the soft drink. In 1888- they issued a voucher for a free glass of coke. Coupons were mailed to potential customers and placed in magazines. It is estimated that between 1894 and 1913, one in nine Americans had received a free Coca-Cola, for a total of 8,500,000 free drinks. By 1895 Coke was served in every state in the United States.

Cons of Offering Coupons

One important thing to consider is how to stop offering coupons if you start.

Most pizza today is sold with a coupon. When was the last time you purchased a pizza without some kind of discount? Indeed we are trained to look for the coupon. If your favorite pizza restaurant doesn’t have a coupon, customers often just go to another restaurant.

JC Pennys Department store was caught up in this dilemma last year. They brought in a new CEO that decided lower prices would work better than coupons. They cut out the coupons. The Results: Sales went down, and the CEO lost their job. They went back to coupons.

The latest example is Hobby Lobby, a chain of arts and crafts stores.   For years, they offered a coupon in their Sunday newspaper ad. It was only good for one item – one time. When they decided not to show it anymore, social media went wild.  The backlash was swift in social media. At the time of writing, this post Hobby Lobby was sticking to their marketing efforts to no longer offering the coupon.

So, should you offer a coupon in your business?

Offering a coupon can make sense. But you need to have a solid marketing plan if you decide to stop offering the coupon.  It may not be as easy as just to quit offering the coupon.

It is tough to take something away from someone once you give it to them.   Just ask anyone that owns or runs a Pizza Restaurant — Or Hobby Lobby?

Coupon Pros and Cons

In marketing, a coupon is a document that can be redeemed for a financial discount or rebate when purchasing a product.

Coupons are issued by manufacturers of consumer packaged goods or by retailers as a part of sales promotions. They are often widely distributed through the mail, coupon envelopes, magazines, newspapers, the Internet (social media, email newsletter), directly from the retailer, and mobile devices such as cell phones.

The New York Times reported “more than 900 manufacturers’ coupons were distributed” per household, and that “the United States Department of Agriculture estimates that four families in five use coupons. Coupons can be targeted selectively to regional markets in which price competition is tremendous.

Don't Gamble With Your Marketing

Don’t Gamble With Your Marketing.

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