last word

Why Coupons Don't Work

Bob Phibbs

As a retail consultant, the first thing I do when I take on a new client is discontinue discount marketing programs. In fact, I often raise their prices to help them become profitable.

Online daily deal sites tout how they can get people to your doors, but that's not really the point if you aren't meeting expenses.

SEVEN REASONS

Here are a few reasons coupons shouldn't be used for marketing:

1 Coupons are looked at as an ongoing effort. In effect, they become the whole marketing plan.

2 By the time you factor in your time in creating, printing, and distributing them, and the actual discounting itself, you have an expensive promotion.

3 You have taught the customer that your product is not worth its price. In fact, you may have given the illusion you are raking in big bucks on their backs.

4 The people who found you through coupons will wait for your next one.

5 You are rewarding people who have no relationship to the success of your business.

6 Staff will sometimes keep a copy of the coupon to offer to their own customers or friends.

7 If your regular customers who have supported you find out someone who's never been there is getting a better deal than they are, they might not return.

Instead of couponing, reward those who buy from you 24/7, 365 days a year. That is, those who buy from you regardless of the coupon, deal, or steal. EB

Bob Phibbs is a business strategy and marketing expert based in Coxsackie, N.Y. He has operated his consulting company, The Retail Doctor®, since 1994. For info, visit retaildoc.com.

IMPACT ON …

If you repeatedly market your business with coupons to people who don't know you…

STAFF…

you'd better cut staff because profit is what suffers.

RETURN CUSTOMERS…

once they find out others get a better deal than regulars, they may be alienated and stay away.