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Does Coupon Marketing Work
The Short Answer: Yes, Coupons Work for Small Businesses.
Obviously, one of the biggest challenges facing small business owners every year is how to steadily attract new customers and methodically grow their sales. Having a coupon marketing strategy is one of the simplest, most effective and cost efficient ways to market a local small business.
In this article we will share some quick statistics about how local consumers use and view coupons from businesses like yours and also some of the why people are attracted to businesses that offer coupons.
(Click Here For Tips On: How to Create a Great Coupon)
The Cold Hard Stats!
- Coupons lead to 24% higher customer spend than regular customers
- Almost 70% shoppers say that digital coupons create loyalty
- 66% of consumers report that they make a purchase if a coupon is offered
- 80% of people say they will switch companies if a coupon/special is presented
- If a follow up discount is offered, 63% of shoppers will reconsider purchasing
- As of 2021, nearly 150 Million people used a digital coupon for a product or service!
Why Are People Attracted to Coupons?
Part of the reason is clear, people like to save money, but there are several more key factors that you need to understand in order to fully comprehend the power of coupon marketing. For a local small business selling is a two part process.
First, it is a logical conversation with your prospect or customer. That is the exchange of the value of your product or service for the monetary cost, or simply “price.” Coupons and special offers address this part of your sales challenge on their face. They are making the value proposition better for the shopper at the very start.
Second, are the “human” reasons that coupons work or the psychology of coupons. Most experts will talk about five or more reasons special offers work to drive sales: Urgency, Anticipation, Reciprocity, Goodwill, and Scarcity. To make it simpler and easier to remember for small business owners to take and implement in their own strategy I like to generalize these “triggers” into two buckets: Urgency and Goodwill.
1. Urgency (Scarcity)
Urgency tugs at our human instinct or fear of missing out. Think about the big, special deals of you have seen:
- “Hurry, this won’t last long”
- “While supplies last”
- “The first _____ shoppers get ______”
- “This week only”
- “For a limited time”
Even events like “Black Friday” and “Cyber Monday” create a sense of urgency or more specifically anticipation. Offers that include this sort of language moves a buyer out of indecision and into a buy now or miss out forever stance. And this is can be made even more effective when you pair urgency with a calming or “de-risking” element such as:
- “No long term commitment”
- “30 Day Money Back Guarantee”
- “If your not satisfied…”
You can see how this creates a quick, yet powerful one-two punch to drive your potential customer into action. Be careful when creating urgency though that you don’t go too far or you will ruin the second major reason that coupons work for small businesses, that is Goodwill.
2. Goodwill (Likeability)
As a local small business, this is your secret weapon against you big business competitors. Goodwill for a local company could also be described as neighborliness. It is a sense of community where you are looking out and ready to help your customers get what they need and want at a fair price. It’s the old fashioned sense of everyone helping each other. Those same strong emotions a conjured up in your customers when they see a coupon from the business down the street.
Before, I go into a brief description of the technicallity, it is important as a local business owner to embrace the “fluffiness” of their place in the local community versus the “out of town” corporation. It is very real and if you give people almost any reason to choose the “local” you over the “out of town” them, they will hire or buy from you. Your coupon creates just the right nudge, that your neighbors will come to you, send their friends to you and never leave you.
Now, the more technical explanation is called reciprocity. Psychologically most people feel obligated to “give” something when they “get” something. This is why coupons still work for the “out of towner” because many local business do not do coupon marketing. Even the habit of saying thank you when your waiter hands you the bill is an example reciprocity. It is as hard wired in our instincts as urgency or fear of missing out. If you offer a discount or deal, then your customer will (in their gut without thinking) feel a need to return the offer. The result is a sale and if you do good work and are nice you’ll have a loyal, friend referring customer for life.
Thank You For Reading, Hope It Helps You Grow Your Business!
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Coupon Whale is designed to help local business generate continuous interest in and leads for their businesses. Companies like yours each get a custom business profile to tell people all about your business, where you are and how to get in touch with you today. Your digital coupons allow you to effectively make offers to potential customers, generate new leads and steadily grow your business in your community.
Coupon Whale devotes major resources running omni-channel marketing campaigns using mailers, flyers, road signs, social media ads, SEO and more to keep local customers engaged with the businesses in their communities. Your business gets to piggy back on these local marketing efforts for a fraction of what it would cost you on your own.
