If you are a retailer, now is the time to take advantage of the consumer couponing trend. Social networking sites like FaceBook and Twitter can be key tools for merchants that want to connect with their customers and acquire new ones in a cost-effective way. Coupon sites like Groupon, Living Social and others have become very successful, sometimes at the expense of the very merchants providing discounts on their goods and services. Read on for tips that can help prevent that from happening to you.
Some retailers offer their own online deals, which can help protect their margins and focus on “problem” merchandise. However, the advantage of coupon sites is their wide reach to potential shoppers who may not be on the merchants’ contact list.
Why Do Consumers Like Daily Deals?
Research shows Daily Deals extend beyond merely saving consumers money; they provide a layer of emotional and social satisfaction for consumers such as:
• Sophistication: Daily Deals make consumers feel like they’re in on an exclusive secret because the daily deal sites require membership and consumers feel that they’re in the know.
• Empowerment: Consumers are empowered to do what they love more often because the daily deal allows them to indulge in more luxuries on a regular basis.
• Higher Perceived Value: Consumers felt these deals provided better value than coupons and other discounts because they are more meaningful, relevant and convenient.
Following are the implications based on what the consumers said:
• Daily Deals are here to stay because consumers love them. Therefore, they should be part of the discussion when brands are planning marketing initiatives.
• Daily Deals are enabling consumer to feel spontaneously indulgent, so brands should use them as a way to surprise and delight, while understanding how, where, when and how much.
• Daily Deals are about much more than short-term sales. They provide consumers with social and emotional benefits and therefore, brands need to take into account all the intangible benefits and not just look at dollars and cents.
Leveraging Coupon and Daily Deal Sites
Wouldn’t you like to learn more on how to leverage these coupon and daily deal sites to your benefit? First, it’s important take inventory of the requirements and your assets to ensure you are ready for this kind of promotion. You must determine if it’s consistent with your business plan, if the idea is relevant to your target audience, and if you have the staff to execute and deliver high volume orders without losing margin.
If it’s a go, you might want to offer a coupon or daily deal through a company like Groupon or Living Social. Concentrate on the tips below to ensure profitable sales with these promotional tools.
Provide a Compelling Offer: Get the attention of the coupon company first, and then the consumer. For instance, rumor has it that one coupon provider has more merchants competing for its offers than it can handle, so you might want to try several providers to close the best deal. PayPal, the payments division of eBay, plans to start offering daily deals in the first quarter of 2012, so that’s another option.
Offer something in your inventory that will drive significant sales volume. Make the offer profitable, both for your company and the coupon site, as some retailers and service providers have actually lost money on deals after the coupon site takes its commission. Focus on ways to encourage the new customers to come back for more and partner with key vendors on the margin consequences of the offer.
Prepare for High Volume Sales: First, make sure you have enough inventories to support the offer, especially in the initial rush. Secondly, make sure you have a trained staff to accommodate a rush of orders. Prepare for high-volume days to make a good impression on your new customers.
Collect Contact Information: A successful coupon promotion will drive a lot of new customers into your store or website. Be prepared to capture contact information such as names and email addresses. Then use this data to drive repeat business, long-term loyalty and higher-profit sales. It’s okay to work on a slim margin on a narrow offering, but only if you can get these bargain-hunters back on a regular basis.
There’s a lot to consider before stepping into online couponing, and the key is to have a plan and the necessary support in place before generating your coupon ideas. Make sure your product/service offer attracts sales and brings the coupon customers back so your venture into couponing delivers future sales and profitability.