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7 Business Strategies for Creating Discounts & Coupons (Without Hurting Profit)
Using discounts and coupons for boosting marketing for your business is a great strategy, because they can help to attract new customers or prompt existing ones to make a purchase. However, they have to be used wisely and strategically, as they can also have negative consequences if you do not implement them properly.
For example, if you offer discounts or coupons all the time, it can create the perception that the business is overpriced, or that the products or services being offered are of lower quality. Additionally, they can affect the overall financial health of your business and your profit, especially if you also make them too high. Imagine what giving an 80% discount constantly would do to your profit.
Therefore, it is important to strike a balance between offering discounts and coupons that are attractive to customers, while still ensuring that the business can operate sustainably and profitably. In this article, we will cover the best strategies you can implement for creating discounts and coupons for your business, that will not hurt your finances. Let's see how!
7 Best Strategies for Creating Coupons and Discounts
1. Segment your Shoppers & Create Different Offers
To create discounts that resonate with your customers, it is important to understand that not all customers are the same. For instance, you may have customers who buy from you frequently, those who started a purchase but then abandoned it, those who have not purchased from you in a while, and those who have only made a single purchase. Additionally, you may have potential customers that you can target. Offering the same discount to everyone may not be effective. By segmenting your customers, you can create discounts that are tailored to each audience, which not only benefits your customers but also your business.
Related: Use Bumpa Analytics to Understand your Customers & Segment them properly
2. Implement an Expiration Date
It is important to add an expiration date to every discount or promo you create to avoid losing money and to create a sense of urgency or Fear Of Missing Out (FOMO) among customers. Discounts or coupons without expiration dates can make customers believe that the discount will be available forever, which undermines the value of the product or service being sold. Therefore, it's essential to stick to the expiration date you set for each discount or promo you offer. On your Bumpa app for example, you can set a start and end date for each discount or coupon you create.
3. Create Goals for Each Discount
This is also very important. Your discounts and coupons can help you achieve your marketing goals. For instance, creating a discount to attract new customers can increase the chances of converting more website visitors into paying customers. You can also use coupons to build your email list and increase customer loyalty. However, it's important to set specific goals for each discount or coupon you offer. This will allow you to measure the effectiveness of your marketing campaigns and make improvements where necessary. By understanding your customers and their needs, you can create discounts that are tailored to each audience, which will not only benefit your customers but also your business.
Related: 15 Effective Ideas for Running Sales with Discounts & Coupons
4. Always Check out What your Competitors are Offering
A little bit of snooping can reveal the real scoop! Keeping an eye on your competitors' promotions can provide valuable insight into what types of discounts and coupons are most effective in your industry. You can then compare your discounts to theirs and see if you need to make any adjustments.
For instance, you might find that your discounts are not as generous as your competitors', or that your customers respond better to discounts on specific products or services. You might also discover that your competitors' discounts are timed or seasonal. All of this information can help you create more effective discounts and coupons for your business.
Remember, the goal is not to copy your competitors, but to learn from them and make your promotions even better. By doing that, you can create discounts and coupons that are more attractive to your customers.
5. Track Your Discounts and Coupons
You can track the performance of your marketing channels by creating specific discounts and coupons for each channel used. This allows you to identify which channels are performing better and which channels you may need to reduce investment in to optimize your marketing efforts.
Pro Tip: Use your Bumpa App to create and have all your discounts & coupons in one place for easy tracking of performance of each of them!
6. Position Full Price Products Beside Discounted Ones
This is a great way to showcase the value of the discount. When customers see the full price next to the discounted price, they can better understand the value of the deal. This also makes it easier for them to make a decision on whether or not to take advantage of the discount. Additionally, this strategy can encourage customers to purchase more than just the discounted item, and then you can make a full profit on the product with a full price.
7. Don’t Give Discounts too Often
Offering discounts too frequently can lead to negative consequences, such as customers becoming accustomed to the discounted price and being less willing to pay full price for products or services in the future. It can also harm the overall financial health of the business. To strike a balance between offering attractive discounts and maintaining a sustainable and profitable business model, it is important to limit the frequency of running discounts.
Conclusion
Discounts and coupons can be a powerful tool for boosting revenue and attracting new customers. However, you may be hesitant to use them due to fears of losing money. The key is to use them strategically and with purpose, such as to achieve specific marketing goals. By doing the things listed above, you can ensure that your discounts and coupons are effective and sustainable, will help you can scale your business faster and open up more opportunities for customers, referrals, and retargeting.
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