What Are the Biggest Pitfalls of Coupons?

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We do observe two big pitfalls for today’s online stores.

Coupon pitfall #1. Being fear to offer coupons

The biggest pitfall is being fear to offer coupons because of worrying about losing money.

It’s true many businesses do not use coupon for strategic considerations, brand image, for instance.

It’s also true offering coupons may reduce your gross margin because the product cost remains the same.

However you shouldn’t give up because of the cost consideration.

Instead you should calculate the prices and costs carefully to see how much discount you can offer.

Design the structure of discount so it boosts results you want at an affordable cost.

Coupon pitfall #2. Offering coupons for nothing

Many merchants assume coupons work just as you create them and give them away. That’s totally wrong.

One shall not give coupons away without a clearly defined purpose.

When giving a coupon, always use it to exchange for an action that you want users to take. For example, visiting your store, adding a product to cart, or checking out.

You’re losing money if you offer coupons without associating them with certain actions you want.

Shall I care about those widely cited coupon pitfalls?

Most lists of coupon pitfalls are prepared several years ago. Many of them are not applicable any longer as the customer behavior has changed much since then. And many can be avoided easily. Keep reading for our tips.

Losing money for discounts?

This can be avoided by calculating your prices and costs carefully. Keep in mind even very small discounts would work. Sometimes coupon works because of the deeply discounted prices. Sometimes it works simply because of psychological effect.

Attracting only deal finders?

Today about 50% of consumers are deal finders. Don’t dive them away. Welcome them!

Not retaining customers?

With coupons, you can not only attract new customers but also return existing customers. You just need to develop a coupon strategy.

Devaluing your brand?

Theoretically discounts and coupons may potentially devalue brand value. Specific to your small business, will coupons damage your brand value? The most probably the answer is not.

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