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One of the things I typically do as a retail consultant when I take on a new client is to discontinue discount marketing programs.
In fact, I often raise their prices to help them become profitable.
Before you read on, if you are one of the extreme couponers or use them religiously, this site, this blog and this post are not for you.
Untrained marketers who say we need to do something always go the easy let’s discount way. It takes very little imagination and since everybody else does it, they assume it must work.
As I’ve said in speeches around the country, anyone can be a discount whore; it takes no brains or skill. And once you do it, you’re often condemned to repeating it as a lifestyle.
Here are 7 Reasons Coupons Shouldn’t Be Used For Your Marketing:
- Coupons are looked at as an ongoing effort. In effect, they become the whole marketing plan.
- By the time you factor in your time in creating them, printing them, distributing them and factoring in the actual discounting itself, you have a very expensive promotion.
- You have taught the customer that your product is not worth what you priced it at. In fact, you may have given the illusion you are raking in the big bucks on their backs.
- The people who found you through coupons will wait for your next one.
- You are rewarding people who have no relationship to the success of your business.
- Your sales staff will keep a copy of the coupon to offer to their own customers or friends.
- If your regular customers who have supported you find out someone who’s never been there is getting a better deal than they are, they just might not return.
That’s precisely what happened at a local restaurant in Long Beach, California where a group of us went for a birthday celebration. Located in an old craftsman house with antiques and a wood-burning fireplace, this was a great place to enjoy a great meal. We had ordered wine before dinner, enjoyed fabulous entrees and saved room for their signature desserts.
When the couple at the table next to us paid their check with a 50 percent off coupon, the owner must have been tipped off. He went to their table and sat down. We overheard him talk about his participation in the 50 percent off Entertainment Book.
He said that he valued the Entertainment Book because it brought in customers who had never tried him before. He told them the story of his business, how he and his wife built it and how many years he’d been there.
The coupon bearers told him they were from Pacoima, about an hour’s drive from the restaurant and that they would never have come without the coupon. He smiled, wished them well and said he looked forward to seeing them again.
Our table was incensed!
We lived in the neighborhood. We’d gone there for years, paid top dollar and received no special recognition. How did we feel? Who was more important? Here we had paid full price as usual and the people next to us who had no relationship paid half-price.
We never went back….
What to do instead
Reward those who buy from you 24/7 365 days a week. Those who shop with you regardless of the coupon, the “deal,” or the “steal.” Getting them on your best customer list pays them back for their loyalty.
Getting the coupon users on your preferred list misses the point…
Now I’m not talking about giving people who don’t know you 50% off to come in the door with the online deal sites and then, as some have suggested, getting them on to your preferred customer list.
Why?
Because you just gave them 50% off, unless you are going to offer that regularly, they’ll feel your subsequent offers are not enough incentive and they’ll go elsewhere to someone else offering extreme coupons. Which means you took all the hit for giving them the deal with none of the promised rewards.
If you repeatedly market your business with coupons to people who don’t know you, you’d better cut your staff. That’s because profit is what suffers.
And once your best customers find out others else get a better deal than the regulars they’ll be like me and never return. No one likes to feel they are being taken advantage of..
Two final thoughts on coupon marketing
1) The media are filled with how redemptions are way up on coupons and free-standing inserts like you find in the Sunday papers are at an all-time high.
Don’t be fooled. In the past two years coupon-hunting sites have proliferated, from mommy bloggers to individual business models that only exist to showcase the latest deals with tips and tricks. Never has it been easier to find a coupon from anyone, anywhere.
2) Price isn’t everything – you have to make a profit. You can’t compete on price, you have to build your brand or you won’t be around for long.
If you’d like help meeting the challenges of 2012, especially in regards to your retail sales training or marketing efforts so you can be profitable please contact me.
[...] “The retail doc” lists 7 Reasons Coupons Shouldn’t be Used for your Marketing. [...]
In a weekly district meeting that I was apart of a few months back; I told the other managers that I was anti-coupon and trying to break the habit of relying on coupons with associates who were using the coupons we had as a crutch. I said that we needed to retrain, refocus, and coach the associates to make them better sale people. I went on to say that our specific store was struggling with sales at the time and that throwing discounts was not going to help anything. The discount could be the difference making our store goal and not,that the associate have to work twice as hard to make up for the extra discounts they give.
I stated, that we were devaluing the products we selling and also the store its self. These statements did not go over well. The other managers on the call shouted me down, saying things like why would you let a sale walk out the door just give them the coupon,” and to add salt to the wound the District Manager justified what the other store were saying and what my associates were doing by saying;”Your store is the newest in the district it should be okay with you if your associates need the coupon as a crutch”.
Fortunately after months of thinking and doubting that I may have been wrong in what I had said, I came across this blog, and it has made some much sense to me, and has proven me right.
Thanks for stopping by John and sticking to your guns. Just because coupons get redeemed doesn’t mean they are smart. I know of one company that used to discount heavily but just added that if the salesperson felt they needed to discount, they would lose commissions on the sale. Don’t you know their sales went up immediately! Thanks again John!
I agree, most discounted items are usually an old stocks. They give it as a gift if you purchased a huge amount of items or products or through deals and coupons.