Advantages and disadvantages of online coupons


Coupons are certificates that provide consumers with discounts on goods or services when they are redeemed with retailers or manufacturers. Offered mainly by retailers and manufacturers as sales promotion tools to accomplish specific sales and marketing goals, they are very popular with small business owners because they are so inexpensive to disseminate and because of their historical effectiveness.

Consumers are attracted to coupons because they offer immediate value and savings, but in recent years the proliferation of coupon distribution programs has produced a decided excess in the marketplace.

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This flood of coupon offers, commonly known as "coupon clutter," has resulted in falling redemption rates in recent years. Like other sales promotion tools, coupons have their advantages as well as their problems. On the plus side, they have the advantage of passing along savings directly to consumers, as opposed to trade allowances given to retailers by producers. Consumers perceive coupons as a temporary special offer rather than a price reduction, so the withdrawal of coupons usually does not have an adverse effect on sales. In addition, coupons often create added traffic for retailers, who have the option of doubling or even tripling the value of manufacturers coupons at their own expense to create even more store traffic.

Moreover, retailers often receive additional compensation from manufacturers for handling the coupons.

The Pros & Cons Of Using Coupons For Your Business

Critics of coupon-oriented sales promotions argue that coupon clutter has dramatically reduced their effectiveness. They question whether coupons actually generate incremental business from new users, pointing out that the increased quantity of distributed coupons has been paralleled by falling redemption rates. In addition, excessive coupon distribution also increases the likelihood of fraud and misredemption. Coupons that are issued for established brands, say critics, tend to be redeemed primarily by loyal users who would have purchased the product without a coupon. Coupons may be issued to serve a variety of different strategic marketing objectives.

One use is to encourage consumers to try new products; coupons have historically been fairly efficient at getting consumers to try new products by reducing the risk of trying something new.

Coupons - advantage, disadvantages

When you have diversity in your product portfolio, you could offer discounts for specific products which will attract customers to your store. Later, you could sell non-discounted products along with the discounted ones to the same customer. Remember not to give discounts on cheap products only; they are already cheap. Try to give minimal discounts on premium quality products.

BIBLIOGRAPHY

Coupons will drive business to your store. You can also create discount offers directly through Facebook. Offered mainly by retailers and manufacturers as sales promotion tools to accomplish specific sales and marketing goals, they are very popular with small business owners because they are so inexpensive to disseminate and because of their historical effectiveness. Offered mainly by retailers and manufacturers as sales promotion tools to accomplish specific sales and marketing goals, they are very popular with small business owners because they are so inexpensive to disseminate and because of their historical effectiveness. This is a common strategy used by food stores. Other articles you might like: For the printable ones, make sure that the local retail shop authorizes the use of them.

Chances are customers who ordered discounted products would want cheap products on the side as well. Coupons and discounts always mean less money for the seller and more money in the wallet of buyer.

Sunny-side Up

May 18, The pros of offering coupons include introducing new customers to your If your coupon is not an online coupon, require them to give their. Jul 10, Introduction. Pros and cons must accompany anything that has been instituted by man. It is these pros that makes such an item desirable and.

As you are using coupons for promotions, you need to balance your costs and revenues out by always including the cost of giving out coupons and discounts in your performance and revenue calculations. Due to lack of good strategy and realistic predictions, business owners end up offering discounts on products that customers would keep buying for their regular prices anyway. You could cut this loss by giving out discounts to particular target groups, like first-time buyers, the elderly, school-goers, residents of a particular geographical location, etc.

Online Coupons: Pros and Cons

Often people value products based on their prices. That means when you offer lower prices and discounts, you might tarnish your brand image by coming off as cheap. Go through some couponing sites like piucodicisconto.

FURTHER READING:

Regular customers might feel left out of the reward group if you are giving the coupons out to only first-time buyers. Like every business decision, offering coupons has to be done in ways that satisfy the needs of your customers — both new and old. How can you use coupons strategically to grow your business without giving up too much of your profit margin? The biggest con of using coupons is that they cost you money.

Any discount you offer will mean less money in your pocket.

Pros and Cons of Using Coupons

The key is to calculate whether that discount will make a difference to your profit margin by introducing new customers to your store or bringing back old customers who may have gone elsewhere chasing other coupons. Even your regular customers can get in the habit of waiting for coupons, which cannibalizes income that was already being generated before you introduced the coupon program.

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So you need to consider when and how to offer those coupons to avoid impacting your regular customer base. Coupons will always result in reduced profits on the item or items included in the coupon campaign, but the cost of purchasing that product will not change.

We talk more about how to use a coupon campaign strategically to grow your business below.

Carolyn Kmet

The pros of offering coupons include introducing new customers to your store, introducing new product lines, providing a way to get rid of unwanted inventory to make room in your warehouse or store for newer product, encouraging customers to try a new brand that is more profitable to you or getting customers to come back to your store. Coupons can become a crucial part of your social media marketing provided you use them strategically.

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For example, one of the best ways to turn coupons into a long-term marketing strategy to encourage repeat customers is to require them to provide their name and email address in order to get the coupon.