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How to Use Coupons to Build Your Business
Adapted from the U. S. Small Business Administration

A series of Notes will point out where and how the Grapevine coupon and discount programs differ from other coupon providers.

    There’s no doubt that we are a nation of coupon-clipping consumers and let’s face it: Who doesn't like a bargain?

    Note: Speaking of bargains, there is no charge for any coupons that are currently or will be offered by the Grapevine Coupon Center. Why? Because the merchant will be developing the coupon offer on his or her own at little cost to the Grapevine. It takes less than 10 minutes to create and less than five minutes to revise a coupon.

From print coupons in publications, to printed handout coupons, to online coupons to discount cards , consumers are literally bombarded with special offers. All this activity translates into a burgeoning demand and, even more important, emphasizes the need for merchants to give major consideration to this very effective marketing technique to maintain or gain a competitive advantage.

One major upfront decision is to determine which coupon distribution system works best for you:

  • Print Coupons In Publications are usually very expensive and require payment up front so that you’re at risk, often substantial , as to how well the coupon will pull. Changes are impossible after the print deadline and you are usually locked in until the next issue before you are able to make a change. You can restrict the coupon to a single use by requiring the coupon to be surrendered at the point-of-sale. This can often be avoided by the customer picking up several issues of the publication if stacked at a public distribution point.

  • Handout Coupons are usually cheaper if you prepare them yourself since they are not part of a publishing operation. However, the cost of distribution can vary greatly depending upon the number of distribution points and the method of delivery. You can more easily restrict the use to a single visit by requiring the coupon to be surrendered.

  • Online Coupons are also very expensive, with the coupon company usually taking 50% of the selling price. Changes to an online offer are usually easier list cost to make than to a printed offer. They are usually a nuisance for a customer to process and make online payment. Often, there will be a delay in processing so that the coupon will not be available immediately.

    Note: The online nuisance and delay factors do not exist with the Grapevine Coupon Center because all the customer need do is print out the coupon that appears on the Web page. There is no need to process an online payment or wait for the transaction to be processed

  • Discount Cards, which generally are tied to an online listing of merchants,are rare but perhaps the most advantageous for both merchants and consumers. The main benefits are that the customer can use the card immediately without any processing delay or “paperwork”  and eliminates the need to carry coupons.  While they can be used for multiple visits, this is usually not a negative for merchants who are not operating on razor-thin profit margins. Indeed, most merchants prefer repeat visits unless the “discount” (in the form of fees) cuts profit margins substantially.

    Note: The Discount Card will be especially beneficial in that a customer, when driving in a particular area, can access the Coupon Center through his or her Smartphone and get full information on merchants in the area which are participating in the Grapevine program (available by year-end).

    Note: Virtually all coupon companies offer only one of these four distribution methods. The Grapevine Coupon Center is now offering both Discount Cards and Online Coupons and plans to offer both Handout and Publication Coupons by the end of the year, thus providing a mix-and-match capability all under one roof.

But how do you make coupons work for your business without underselling your value and compromising your bottom line?
Here are some considerations and tips for determining whether coupons are right for your business and how to market your discounts and special offers correctly.

Are Coupons a Good Fit for Your Business?

Before you jump on the coupon bandwagon, or even use more traditional outlets to promote your latest coupon-based special, step back and consider whether coupons are the right marketing tactic for your business. Here are some points to consider:

  • Coupons are really another form of marketing. By themselves they are not money-spinners. Concentrate on using them to build awareness of your business among new markets and to new customers. From here you can hope to up-sell and generate repeat customers.

    Note: Grapevine coupons MUST be moneymakers, since they are FREE.  Generating up-sell opportunities and repeat business make them even GREATER moneymakers.

  • Coupons tend to work best for location-based, product-oriented businesses where local customers can realize quick and easy savings.

  • Can you business scale to meet the potential demand that the coupons may trigger? Whether you operate online or are a location-based business be sure that your staff are trained and your operations can scale quickly and seamlessly to deal with the new foot traffic.

    Note: With the Grapevine Coupon Center, you yourself can change the coupon’s terms instantaneously, in less than five minutes, allowing you to ratchet demand up or down as conditions suggest.

  • Make sure you can afford the discount for the duration of its validity. Weigh your long term goals and how coupons can benefit these.Do you have enough profitable business coming from other product lines or time periods to supplement the cost of offering a discount or special offer? This is a top consideration, especially if you are exploring coupon sites, such as Groupon, who take 50% of the revenue you get from your advertised offer.

     

Note: With the Grapevine Coupon Center, you need not be concerned about the cost since our program is free. Moreover, you yourself can change the coupon’s terms in less than five minutes, allowing you to ratchet demand up or down as conditions suggest.

What About Coupon Sites?

Because coupons are blasted out to subscribers on a daily basis, coupon sites are essentially coupons on steroids for the consumer and small business owner alike that, ill-managed, could inundate you with new customers and compromise your service.

    Note: The Grapevine Coupon Center allows you to avoid this problem by terminating your offer immediately and, when conditions allow, reinstating it.

  • Who uses these sites? Studies show that group-purchasing sites are dominated by a lucrative market of young, educated, female, above-income consumers.

  • What will it cost me? Most sites typically charge 50% of your special offer You can set a cap on how much you want to sell, the lower the better to prevent an onslaught of new customers. In reality, don't expect your estimated take home to be much more than 25% of your normal retail price once you’ve deducted your discounted offer price and the group buying sites cut of the offer.

    Note: This concern is completely irrelevant with the no-cost Grapevine Coupon Center, where your only “cost” is the discount to the customer. 

  • Are coupons right for your business? If you can scale your business up or down to handle a temporary flood of customers and you can afford to offer a product or service at less than 25% of its retail price, then a coupon program through one of the coupon giants may be workable for you.

    Note: The no-cost Grapevine coupon program, which delivers 80-90% of the retail price (after the 10-20% discount that brings in the customers), is more than workable. It is a no-brainer.          

Building a Successful Coupon-Based Campaign

If coupons are right for your business, here are some tips for using them successfully:

  • Look at your numbers and decide on the level of discount you can handle. How long should it run for and what changes you need to implement to support it.

    Note: This is an irrelevant consideration in the case of free coupons.

  • Put limits around your offer to help you cope with demand. Consider limiting redemption to certain days of the week or times of day and be clear on exclusions (e.g. dine-in only and alcohol exclusions).

  • Put in place a "one offer per customer" policy so that customers' can't share or re-use the same coupon.

    Note: With a no-cost coupon, you may want to encourage customers to return. Keep in mind that the discount is almost always less than the cost of traditional marketing, which ordinarily encourages repeat customers.

  • One-off coupons have a place but aim to promote repeat visits. For example, buy X and get Y free on your next visit.

  • Focus on shifting excess inventory or promoting under-utilized services.

  • If you can, focus on new customers, outside your current market or demographic. For example, a hair salon looking to attract more male customers, could offer a “Sharpen Up Your Business image” promotion targeted at new male customers.

  • Ask customers where they found your coupon and use web-analytics to track use of coupon codes and web banner click-throughs.

    Note: For merchants who feel uncomfortable with the computer, we will prepare the coupon offer for  $19. Non-routine situations will be charged at $29 an hour with a one-hour minimum


    Note: Because the technology of our Coupon Center allows merchants to post their coupons online in just a few minutes, with no material cost to us, we can thereby convert the many millions of dollars sent to out-of-county coupon providers by local merchants into direct savings for their customers -- a win-win-win for businesses, residents, workers and local government.


    Note: Palm Beach Grapevine will be offering free seminars throughout the year on “How to Use Coupons Effectively.”

 


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