HOW TO: Create and Distribute Effective Online Coupons
Darren Waddell is Vice President of Marketing at MerchantCircle.com. He can be found on the
The age of the coupon is upon us. With historically high unemployment and uncertainty about the economy weighing heavily on consumer spending, the humble coupon has enjoyed a resurgence. Both the classic clip-and-save variety and new online options delivered via the web, e-mail, social networks, and mobile phones are popular among consumers.
Coupon redemption in the U.S. rose 10% in the fourth quarter of 2008 –- the first rise in coupon use since the early 1990s –- and total coupon redemption reached 3 billion in 2009, according to Inmar. What’s more, the use of printable coupons, where people print online coupons and redeem them in stores, rose 308% in the first half of 2009, while 10 million digital coupons were redeemed during the same period, up 25% year-on-year.
Price sensitive consumers want deals, and smart local companies realize coupons are a great way to attract new customers and retain existing ones. Increasingly, local businesses are eager to use online coupons as a simple, cost-effective way to attract local customers. But while it’s fairly easy to create a coupon online (more on this below) the bigger trick is making sure people find it. To ensure a small business coupon promotion reaches enough people in your local area, a well-planned distribution strategy is crucial.
What is an Online Coupon?
Create Your Online Coupon
The first step in creating an online coupon is deciding on the level of discount you want to offer, and how long you want the promotion to run. Be clear and direct with the promotion: “10% off this week” or “Buy one get one free today only.”
Next, you’ll need to create your online coupon. There are many national coupon sites targeted at large consumer brands, like Coupons.com and Redplum, but they aren’t suited to smaller businesses. Small businesses need to reach a targeted, local audience with their promotions, so it makes more sense to create a coupon on a site like Craigslist or Local.com, which let local businesses create and distribute coupons with just a few clicks. You can also create a “coupon” by simply coming up with an offer to send out via e-mail.
Distribute Your Online Coupon
Once you’ve created a coupon offer, you need distribution. If your local business coupon isn’t getting into the hands of local consumers, what’s the point? Here are several free or inexpensive ways small businesses can distribute online coupons.
1. E-mail a coupon to your client list. Allow recipients to print the coupon and bring it into your store, or simply “mention” the promotion to receive the discount.
2. Blog about it. Even if you only have a few customers subscribing to your blog, posting deals will encourage recommendations and new subscribers.
3. Post your coupon on an online business directory site or social network that automatically distributes coupons to targeted audiences via a network of local sites and social channels, such as Facebook, Local.com, or Valpak.
4. Particularly if you are a service business, create a Craigslist posting in a relevant business or service category offering your discount. Even a simple text-only coupon works well.
5. Add a coupon banner on your website that automatically applies the promotion at checkout. To make this work, you need a somewhat sophisticated transactional system that allows you to tie a promotion to clicks on the coupon banner.
6. Use your Twitter and Facebook accounts to offer friends and followers a special discount. Make sure the promotions you offer are compelling and make your followers feel special. They are following you for a reason: To get deals and inside information.
8. Film a short video clip showcasing your business and post it on YouTube. Add text to the video offering a discount to customers who mention they saw the clip. Don’t forget to promote your YouTube video in Facebook, Twitter and on your blog.
9. Go viral. Make your coupons shareable, allowing people to pass the deal along to friends. Try promotions like “Get 20% when you refer a new client,” or “Bring in three friends and get 20% off for everyone.” Each coupon you send out via e-mail, on Twitter or Facebook, or post online should include a link to “Share this coupon with a friend” so people can easily forward the discount onto their networks. Stats show that sharing now drives upwards of 33% of traffic as search, so it’s crucial to make your coupon shareable.
10. Try a social shopping site. Sites like Groupon allow businesses to offer coupons to local customers redeemable only if a certain number of people sign up for the discount, so it’s a great way to attract a large number of new customers.
Whatever combination of distribution methods a small business chooses, don’t forget traditional methods that have stood the test of time. For example, place printed coupons on your shop’s counter, promote your deal via flyers, or continue to include paper coupons in the local ValPak mailer. Even though online coupons are gaining in popularity, tried-and-true methods still work to drive some business.
Always put a time limit or expiration date on a coupon. Once your coupon promotion is over it’s time to measure how well it performed to drive sales. If you have a transactional website, use Google Analytics or your other analytics provider to find out how many people clicked on your coupon, and how many of those clicks lead to purchases. YouTube will show you how many people viewed your video promotion.
You should also use other more “primitive” methods to track redemption. Ask customers where they saw the coupon they are redeeming in your store (e-mail, your website, a third-party website) and track their comments in a document. After a few weeks, look back to see a pattern of which distribution channels yielded the highest redemption rates.
Use Coupons to Build Loyalty
Lastly, remember that coupons are more than just a one-time deal. They have the potential to create ongoing customer loyalty. Remember this: on average, according to most industry estimates, it costs nine times more money to acquire a new customer than to keep an existing one.
Each time a customer redeems a coupon, it’s an opportunity to connect with them on a personal level. Ask for their e-mail address, or encourage them to write a review of your products or services on local directory listing sites. Ask them to follow you on Twitter or join your Facebook Fan Page, and always follow-up with further promotions down the road. Make sure to deliver something of value to your customers –- don’t spam them with unwanted e-mails, but offer compelling, targeted offers that nurture an ongoing relationship.
Why not try some unique customer loyalty promotions? Try a coupon sent to only your most loyal customers, or open your shop one hour early for loyal customers, paired with coffee and croissants and a store-wide 15% off discount.
Many small businesses offering high-quality products and services mistakenly believe a coupon cheapens their business and makes them look desperate for sales. This is not true. In fact, coupons are cool again. Customers are holding tight to their wallets these days and they won’t change their behavior any time soon. There are a multitude of free or inexpensive tools that help small business owners deliver timely, targeted, relevant offers to local consumers seeking deals. With the proper distribution of your coupon online, you’ll build sales, increase customer loyalty, and come out ahead of competitors when the economy recovers.