The power of coupons: How discounts can boost your revenue.


The power of coupons: How discounts can boost your revenue

Implementing coupons or discounts is a strategy to attract customers and increase revenue. Coupons offer your customers a product or service at a reduced price. There are various types of coupons you can use for your business, including:

  • Percentage discount: A certain percentage is deducted from the original price, such as 10% or 20% off.

  • Fixed amount discount: A fixed amount is subtracted from the price, such as €5 or €10 off.

  • Free product: A free product is offered with the purchase of another product.

How coupons work

Coupons are designed to attract potential customers who might not otherwise consider your brand. By lowering the price barrier, especially for higher-priced items, you encourage more people to purchase your product. Additionally, you can strategically use discounts to target specific customer groups. For instance, an electronics store might offer exclusive coupons for accessories or new releases to customers who frequently buy tech gadgets. This stimulates repeat purchases and increases customer satisfaction.

Using coupons in your marketing strategy not only helps stimulate repeat purchases but also allows you to gather valuable customer insights and benefit from higher purchase volumes. Coupons are often part of broader marketing campaigns, such as product launches, seasonal promotions, or loyalty programs. They can help increase brand awareness and customer engagement.

However, despite the benefits, some businesses hesitate to offer discounts due to concerns such as:

  • Margin Pressure

  • Perceived Value

  • Negative Impact on Brand Value

  • Risk of Cannibalization

  • Execution Costs

  • Long-term Impact

Nevertheless, studies and practical examples show that well-thought-out discount campaigns can significantly contribute to business growth. Let’s explore why and how coupons can be so effective.

Why are coupons effective?

  • Attract new customers: Coupons draw in new customers who might not otherwise consider buying from you.

  • Reward loyalty: Existing customers appreciate discounts as a reward for their loyalty.

  • Seasonal sales boost: Discounts can provide seasonal sales incentives, such as during holidays or slow sales periods.

How can discounts increase your revenue?

  • Change price perception: By altering price perception and attracting more customers, you can increase overall sales volumes. Even if the profit margin per unit is lower, total revenue can rise due to increased sales.

  • Encourage additional purchases: Discounts can motivate customers to add extra products or more expensive variants to their purchase.

  • Gather valuable data: Using online discount codes allows you to collect valuable customer data, which can help refine your marketing strategies and better understand your audience.

Effective coupon implementation

To effectively implement coupons, target specific customer segments to reach the right audience. Timing is also crucial. For example, use coupons during a product launch to ensure as many people as possible try the new product. Lastly, make sure the terms and conditions are clear to prevent misuse. By smartly utilizing discount campaigns, you can not only boost your direct sales but also strengthen your brand and grow your customer base. This strategy, when executed well, can deliver significant benefits for both small businesses and large enterprises across various industries.

Interested in starting a coupon strategy for your business? Contact us today!