If you have a business or eCommerce site, you might be tempted to jump onto the coupon-code bandwagon. Is it worth turning to promo codes, online coupons, and deal sites to attract sales, or will they crush the longevity of your business? Let’s weigh the pros and cons.
PROS:
In Line with Consumer Behaviour
Online shoppers like to do their research. They like to compare prices and search around for great deals. They especially love the thrill of the hunt, and tracking down a promo code can make them feel especially victorious.
Increase Customer Loyalty
Rewarding fans and customers with exclusive codes can increase loyalty. Instead of offering coupon codes to the public, you can try offering them only to Facebook followers, or send customers a code for their next purchase after checking out. Randomly surprising select customers with 20% off their next purchase and a note of appreciation can make them love you even more.
Customers View Coupon Codes as a Limited-Time Only Deal
Customers view coupons as a temporary special offer rather than a permanent discount. Because of this, withdrawing a code or ending a deal will not likely have a negative impact on sales.
Attract New Customers
Potential customers who are sitting on the fence about trying your products might be enticed by the right deal. If your product offers value to customers and has high potential for repeat business, a coupon code can be very helpful.
Prompt Others to Spread the Love
Many customers are more willing to “like” or write about a post on social networking sites like Facebook if they were offered a deal. Make some social media savvy customers happy, and they’ll pass that joy right along to you.
CONS:
Calculate the acquisition cost!
Be sure to calculate the cost of acquiring new customers through heavy discounts. Don’t let your website get buried by deal sites – understand your business and assess whether offering discounts is sustainable and will have long term benefits for your business.
Diminish Product Value
Coupon codes can diminish the value of your product. Make sure that codes are not offered too frequently and that they don’t “cheapen” your brand. Ensure that your prime business strategy is not based on discounted goods if you want to build a sustainable business.
Will Coupon Users Turn Into Long-Term Buyers?
Think about your business and what it offers. Will customers want to come back again or does your business offer a good that only needs to be purchased once in a lifetime? Remember to consider the audience your coupon code will attract, and determine whether this is beneficial for your business in the long run.
Disrupt the Checkout Process
Customers who see a coupon code field in the checkout might be prompted to leave your site and go hunting for a code online. This might disrupt the checkout process or cause customers to change their minds altogether. One helpful solution? To stop triggering customers from going off on a coupon-finding expedition, try labeling the field as “Gift Card Code” instead of using terms such as “Discount Code” or “Promo Code.”
So what’s the verdict? Do we say Yay or Nay to coupon codes? All we can say is this: coupon codes can be a great way to spread the word about your business, but business owners need to think deeply about the long term effects of offering them.