Using Coupons to Promote Your Business

For many, coupons have strange connotations. They’re something moms cut out, or they’re only used by poor folks or the elderly.

In reality, the opposites of these are true – coupons are incredibly popular among affluent folks and millennials (not to mention every other demographic), and they don’t even have to be printed out anymore, so keep your scissors in the junk drawer.

According to a survey by RetailMeNot 96% of consumers use coupons. This means that coupons are a vital attribute to your marketing plan to bring in new customers, retain current customers and to increase your total revenue.

In this marketing tip we want to touch on a few of the key pieces to running a successful coupon campaign.

  1. Setting Your Goal
  2. Choosing Your Offer
  3. How To Distribute/Promote

What is Your Goal?

If you want to advertise your business with coupons, the first step is to think about your goal. Are you trying to attract new customers, or retain existing customers? Unlike a sale, where products are marked down for everyone, coupons allow you to be more specific. You can target specific customers, products, events, competitors, and so on.

Here’s some of the most common goals of coupon advertising:

  1. To acquire more customers – Use an attractive offer to get new customers through your door, or to your website. This is one of the biggest reasons businesses use coupons, although it requires the most caution. As we’ll explain more below, you risk attracting deal seekers with no intention of becoming regular customers AND you risk losing money from existing customers.
  2. To get existing customers to buy more – Offering occasional discounts can encourage your existing customers to keep coming back. One benefit is that existing customers can often be motivated by smaller discounts than a brand new customer.
  3. Target specific customers  – To boost sales, you might target a specific customer, product or event. Examples include hairstyling coupons for prom night or entertainment centers for the Super Bowl.
  4. To stay competitive – Sometimes coupon advertising is simply obligatory. ECommerce businesses may need coupons to stay competitive with Amazon. For businesses like pizza shops, customers may simply expect to find coupons in the local paper or deal booklet.

When it comes to setting their goal, many businesses have more than one motivation. In fact, it’s ill-advised to pick the first goal (acquire new customers) without applying the 2nd one as well (get existing customers to buy more).

This is because coupons tend to attract “deal seekers” who just want a one-time discount. To convert them into loyal customers, you need offer follow up discounts: Big enough to encourage retention, as our coupon experts advised, but small enough so you’re not losing out on subsequent orders.

How To Set a Coupon Value

“A 10% discount gets looked at, 15% sounds good, 20% and up will get people to stop what they’re doing and open your email.”

This advice comes from Jeremy Levi – a marketing expert who’s run many successful coupon campaigns with

While 20% is a good starting point, the ideal coupon discount for your business will depend on a few factors. In particular, what is your typical profit margin? And what are your competitors offering? With this information, you can find a balance between attractiveness and profitability – an offer that motivates customers, but won’t put you too far in the red.

To get an idea what competitors are offering, we recommend using LocalSaver’s free industry comparison tool. When you sign up for a free account and enter your business category, LocalSaver will immediately recommend 3 coupon offers. These deals based on what’s popular among similar businesses in their network.

First-Time vs. Loyalty Coupons

First Coupon
Second Coupon
Third and Subsequent Coupons

20% Off

Break even on purchase

15% Off

Earn a small profit on purchase

5% Off

Earn a decent profit on purchases

Another factor to consider is whether you’re targeting new or existing customers. To attract new customers, you typically need a larger discount. As a simple rule of thumb, Mike Catania recommends breaking even.  In other words, if you buy the product for $30 and sell it for $40, offer a $10 discount.

If a customer uses your coupon to make a purchase, you should follow it up shortly after with another deal. Either hand them a 2nd coupon in the store, or email it to them a few days after their purchase. As Jeremy Levi explained, the 2nd deal is incredibly important, arguably more than the first. The 2nd purchase can cement their loyalty, or, if they skip, pass them off as another one-time buyer.

Coupon Mentality

If there’s one key danger to coupon marketing, it’s that customers can grow dependent on deals. If their first two purchases involved coupons, they may expect discounts on all future purchases they make. If you’re an eCommerce store, for example, customers will likely be searching “coupon codes” when they reach the checkout page.

According to Jeremy Levi, this isn’t necessarily a bad problem to have. Coupons act as a continuous marketing stream for existing customers. Even small offers, like 5% off certain items, can motivate them. It helps ensure they keep choosing your business over the competitors.

If you’re a new business, or an existing business that’s sourcing new items, Jeremy recommends building discounts into your pricing structure. Expect a certain percentage of your customers to apply 5 or 10% off discounts. This will allow you to continue offering deals without losing out too much in the long run.

Store-Wide vs. Specific Product

A store-wide coupon will almost always perform better than a discount on a particular item. This is because it’s rare, if not impossible, to find an item that will appeal to every potential shopper.

There are some situations, however, where specific product discounts can be beneficial. Here are some examples:

  • Personalized Marketing. Jeremy Levi told us about one particularly succesfull coupon campaign at New customers were offered a discount on a belt that treats back pain. If they made the purchase, a follow up email offered coupons for more products that treat back pain.Because the first product signaled the customers niche, Levi could follow it up with a personalized message about treating back pain. Being highly relevant to the audience, and because additional discounts were offered, this resulted in a high retention rate for MarsMedSupply.
  • Clearance Items. Clearing out stock in your backroom? Before you put that item on sale, consider offering the discount as a coupon. A sale will get it off your shelf, but a coupon could potentially bring in new customers.

How to Distribute Your Coupon

What is the best media product to promote my offer?

You know who you want to target, and what your offer is going to be, now you must determine the correct media vehicle to deliver your message. In this day in age, you have plenty of options, and we suggest not putting all-of-your-eggs into one basket. Between Traditional media products (Shoppers, Coupon Books, TV, Radio, Newspapers, and Billboards), social media, display network, and direct mail, you have options. Most media companies offer more than one service, and can offer you a package deal to handle multiple media’s, and by doing so, you save money and expand your message. 

Newsprint Products

When choosing your options, make sure you explore CPM, Circulation & Distribution, Partnerships, and review the companies Audit Report. By doing so you know you are putting your message in front of the correct people. Most markets have several newsprint options, usually free versus subscription. Most subscription based newspapers have seen a huge decline in subscriptions, and over-all advertising as they have opted to promote their online appearance. Free publications (Shoppers, magazines, etc.) have benefitted from that transition because people still want to hold something in their hands.

Coupon Products

If you have a local coupon book in your market, find out who produces, promotes and distributes that product. If you are trying to offer a coupon to increase traffic, this may be your most affordable option. Some markets have free coupon books that are circulated extremely well, and have partnerships with local grocery stores, and others have fundraiser books, where you purchase the product in support of a local sports team, etc.

Digital Marketing

With social media marketing, you are able to expand and target exactly who you want to put your message in front of by selecting key words, key demographics, and a radius where you want the message delivered.

Direct Mail

Direct mail gives you options to saturate houses near your business, or you can select areas based on income, or even buy mailing lists that best fit your message. Every door direct mail is going to be your least expensive option when it comes to postage.

You should be all set by now. You know who you want to reach, the offer you want to promote, and the marketing media you want to use. Now, let’s put together a plan, and help get ROI (Return on Investment). If you’re ready to get started, click here contact one our great sales representatives.