Magic Formula to Coupons & Discounts

Today, many businesses are forced to play pricing wars to remain competitive. Long term sustainability is at stake so many companies slash prices. Marketing experts will say you should never differentiate on price but reality for many businesses can be different. Compete or close seem to be the only two options.

Recently I had a client ask me if there is a secret to couponing. He wanted to know if there was a magic number or a magic offer that would immediately entice consumers to come in and purchase. My answer was no. Simply put, if there were a magic number, then marketing would be easy. Things aren’t cut and dry in the marketing and pricing world.

However, there can be a magic formula to coupons and discounts. Here are some ingredients I propose to make your couponing or discounting successful:

1) Tangible Offers Sell: while the offer depends on the industry, the message should communicate tangible benefits. For example, “Free Gift on orders of $50 or more” is nice, but “Free Recipe Book” is more tangible.

2) Test and Learn: try one coupon across a couple of marketing channels (e-newsletter, direct mail, events, etc.) and see which channel is pulling the better response. Try different coupons across the same marketing channel and see which is pulling the better response. Learn from these tests and apply it the next time.

3) Consistency Builds Business: find a simple offer that you can consistently communicate. People may hear your message the first time, but it may take them 3, 6 or even 12 times to really understand your message and take action. Stick with the program long enough to truly understand if it is working.

Finally, the coupon or discount you offer depends on your business and your industry. Working with your customers during times like these will really prepare your business once the economy turns. For this reason, always think long term. Decide today where you want your business to be post-recession and act accordingly. Today’s couponing and discounts will position your business as a low-price leader today, but is that where you want to be in the future? Sustainability is key but so is long-term positioning.