Why business needs digital coupons

Meal kits simplify homemade meals, while coupons are a powerful tool for attracting and engaging customers. Coupons encourage new purchases and influence customer behavior, with 60% of consumers willing to try a new product because of a coupon. However, while they can boost sales, they may also impact profit margins.

Platforms like Libersave make it easy to integrate coupons into your business strategy, helping you effectively manage discounts while maximizing customer engagement. This guide covers the pros, cons, and best practices for using coupons with tools.

The benefits of offering coupons for businesses

Coupons are a highly effective way to attract, engage, and retain customers. Here are some key advantages:

1. Attract new customers

Coupons can serve as a gateway to introduce your business to first-time customers, encouraging them to visit your store or website. With Libersave, a platform designed for business coupons, you can effectively lower the financial barrier and make it easier for customers to try your products or services.

2. Promote new products and clear inventory

Coupons are a great way to launch new product lines or sell off excess inventory. They help create excitement around new arrivals while freeing up space for fresh stock.

3. Boost profit margins strategically

By incentivizing customers to purchase more profitable products, coupons can indirectly increase your profit margin. For example, offering discounts on bundles or upselling complementary items can maximize revenue.

4. Build customer loyalty

Coupons work as a reward system for your existing customers, fostering loyalty and encouraging repeat purchases. A well-timed discount can strengthen the bond between your brand and its audience.

Using coupons in digital marketing

In a world driven by technology, businesses can leverage coupons to build a robust digital marketing strategy. Here’s how:

1. Email marketing

Coupons are a powerful tool for growing your email list. For instance, you can ask customers to provide their email address in exchange for a discount. Over time, this strategy allows you to build a database for long-term marketing efforts. Through email campaigns, you can promote new products, announce special offers, and encourage repeat business.

2. Social media promotions

Platforms like Facebook (Meta) offer an excellent opportunity to share discounts and coupons. Posting on your business page not only drives traffic but also creates urgency through limited-time offers. An expiration date on your coupon can encourage immediate action, driving both new and returning customers to purchase. Additionally, consistent engagement on social media helps build stronger relationships and provides insights into your customers’ preferences.

The challenges of using coupons for businesses

While coupons offer undeniable benefits, they also come with potential downsides that businesses must consider carefully.

1. Reduced profit margins

Offering discounts naturally reduces the profit made per sale. It’s essential to calculate whether the increased sales volume generated by coupons will outweigh the loss in margin. For example, Jay Goltz, a contributor to The New York Times, developed a formula to analyze the profitability of coupon campaigns, helping businesses determine if the strategy is worth the investment.

2. Cannibalizing revenue

Coupons can unintentionally train loyal customers to wait for discounts instead of purchasing at full price. This “coupon culture” may cannibalize your existing revenue, particularly if customers were already planning to buy without a discount. Timing and frequency are critical to avoid this pitfall.

Strategic considerations for coupon campaigns

To maximize the value of your coupon strategy, consider these tips:

1. Drive additional sales: Use coupons to bring customers into your store, where they may purchase other full-priced items. Grocery stores often use this strategy effectively.
2. Re-engage lapsed customers: Target customers who haven’t visited in a while with personalized offers, such as a discount after 60 days of inactivity.
3. Foster long-term relationships: Use email and social media to maintain communication with new customers, ensuring they remain engaged even after using their initial coupon.

Where and how to offer coupons

1. Traditional paper coupons: Paper coupons are still a popular choice, distributed through mail, catalogs, or with receipts to encourage repeat business.
2. Digital coupons and codes: Online retailers can issue coupon codes via email campaigns, websites, or promotions on platforms like Facebook. Many e-commerce platforms, such as Square, provide built-in tools to create and manage coupon codes.
3. Finding and using coupon codes: Customers have more ways than ever to find discounts, thanks to websites like RetailMeNot, Slickdeals, and DealsPlus. These platforms aggregate promo codes from various retailers while browser extensions like Honey or Wikibuy automatically apply discounts at checkout. For businesses, partnering with these platforms can expand reach and attract new customers.