“A Satisfied Customer is the best strategy of all.”
Starting your own business is a tough but gratifying task, and keeping your business going is always going to be a challenge. This guide can help you maintain customers, attract new buyers, and keep your business on the fast track to continual success using discounts and coupons.
To start, knowing the difference between a coupon and a discount helps you understand when and how to use them to your advantage. Some discounts can be offered on a continual basis, while coupons operate on a set time sale model.
What is a Coupon?
A Coupon is defined as “a voucher entitling the holder to a discount for a particular product”, which is great information, but does not really tell you what to do for your own use. Especially since online coupons seem completely different from the ones you watched your grandparents clip out of the newspaper.
An online coupon uses a code specific to the item you choose to put on sale that is added to your checkout step. Most systems have an option to add coupon codes or discounts, and help guides to assist in setting up these sales.
Coupons are a great way to promote your business- “Try our new product! Enter this code for $5.00 off this specific purchase” or “For a limited time only, take $10.00 off your entire purchase! Use this code here: xxxx”.
Using a coupon pulls in new customers and allows them to dip their toes into your online store without feeling like they are spending too much on something new. Current customers feel special; they can get the products they already love for a lower price. Additionally, coupon codes can help you track your new customers, see what products sell better than others, and show how well your promotions are working.
What is a Discount?
Discounts are slightly different. A discount is to “deduct a specific amount of money from the original price.” These can be used on a continual basis or for a limited amount of time. Free shipping, clearance items and bulk purchases are all examples of a discount for selling online.
Reducing the price on an item is a great way to pull in new and old customers-everyone loves a deal! Coupons usually attract new customers, but discounts keep those customers returning again and again. Discounts do offer less on the actual price, but usually those costs are easily recoverable.
For example, offering discounts on bulk means that you sell more of your product, and bulk costs on your item mean that you can turn around and get bulk costs on the items needed to make your product. Discounts can help you save money in the long run, and also gain money by selling more of your product faster.
Okay, so now you know what a coupon and discount are, and how they can be used selling online products. The next question you probably have is “yeah, but is it worth it? It sounds like I’m losing money” or “That sounds like a lot of extra work, and running my online store is hard enough”.
Both of these questions are valid concerns. The answers are yes, it is worth it, and yes it is a lot of work. The first few coupons and discounts you do will probably give you some trouble, especially with all the steps and promoting you will need to learn. However, after the initial learning period, which this guide helps you with, you’ll be a pro, earning more income from your online store than ever before!
You might also be asking, “Why should I offer a discount or coupon if people are already buying my product at my set price?” or “I’m not a big business, do I really need to have discounts and coupons?”
Offering discounts and coupons brings in new customers and inspires previous customers to purchase from you again. Creating a coupon, such as instant money no matter the purchase, makes new customers willing to take a chance on your product without feeling like they have invested a ton of money.
If your product or service is satisfying, then the customers will return and be willing to spend more with or without a sale price, making more money for you in the long run. Discounts, such as free shipping, make the customer think that they are special, and often incite them to spend more if shipping is not an extra expense.
How do coupons and discounts earn you more money from your online store?
Coupons are used to attract customers, specifically new customers, but they can attract your current customers as well. A coupon gets people to come see what your website has to offer. It gets your name and product out into the internet online selling universe, and even after coupons have expired people still see your online store name, promoting traffic to your website.
Purchasing or creating a significant amount of bulk product is a must, and making your coupon available to a lower priced item still attracts customers. For example, making the travel size of a perfume $2.00 off with a coupon gives customers a practice run with the scent, and will incite them to buy the larger everyday bottle of perfume at $60.00/ a bottle. It is a slight gamble, but if you mark your larger bottle up the 2 dollars you lose, you’ll get more profit in the long run.
Discounts work on a similar principle. As mentioned above, most discounts are used for free shipping or on a percentage off when customers are purchasing in bulk. Free shipping is a common and oft mentioned discount, especially since customers are used to most online stores offering free shipping.
To get more money out of a customer to cover the cost of free shipping online sellers usually set a price range for free shipping. For example, spend $50 and receive free shipping on all items! Discounts boost your sales and the customer feels like they got a great deal, while in reality the customer is probably spending more than they may have originally planned.
This Founder’s Guide to Discounts and Coupons will help your online store grow. Chapters for this guide include types of discounts and coupons, where and how to promote your sales, how to create discount clubs & coupon booklets, and how to continue your use of discounts and coupons without feeling stale, so stay tuned.