For savvy retailers, e-coupons have become an explosive business builder—but the operative word is “savvy.” If you're a CPG retailer who hasn't added online couponing to your marketing mix, you need to. According to a recent Forrester Research report, E-Coupons Engage Customers Beyond Discounts:
But before you pick up the phone and ask to talk to a Groupon sales rep, know this:
Online couponing is fraught with pitfalls. For instance, depending on expiration dates and unused amounts of the coupon face value, your friendly state tax collector may consider your e-coupons as gift certificates. Remember also that couponing, online or off, is an expense. If you're in a low-margin business, it could be a ruinous expense. Living Social and the like typically keep up to half the coupon purchase price. So if you offer 50% off a product or service, you're really selling it for only 25% of your normal asking price. And you may well wait up to 90 days to receive payment from the couponing website.
Can your cash-flow requirements stand that? My point is that while you probably can't afford not to get into the e-couponing game, you absolutely can't afford to do so without objective expert advice (i.e., not a sales rep's.) Before you offer your first coupon, you need a strategy that, at a minimum, addresses these areas:
The last thing most retailers want is to devalue their brand by training customers to always expect a discount on everything. Another area you'll need to address is the backend. Your POS, credit card processing, shopping cart and accounting system absolutely must be ready to accept, process and fulfill your e-coupons. Be sure that the discount appears as a line item in the shopping cart so the customer can see that the discount has been applied. And always, always, always create a coupon-specific landing page on your website.
Okay, you've formulated your strategy and gotten your technology together. Now what about the coupons themselves? Here are three things I believe in: # Online shoppers don't read; they scan, so be as clear and brief as you can. The offer should be big and bold, and all terms and conditions should be easy to read and understand.
Make it easy to get the coupons. No required software downloads, just a simple PDF. Avoid coupon codes with letters and numbers that are easily confused. No 1's and l's, no 0's and O's. Better yet, set up your process so that customers can redeem the coupon with a single click instead of having to bother with entering a code at all. As far as the offer itself is concerned, it all depends on your business. However, at least some of these best practices will probably apply to you:
Forget about brand exclusions; offer the discount across the entire product category. I've barely scratched the surface of all the considerations that must go into a successful online coupon program. Done right it can pay huge dividends; done wrong it can be a painful experience. To avoid the pain and reap the benefits, consult an expert who is knowledgeable on both the frontend and backend of e-couponing—and who knows how to make it work within the context of your entire marketing campaign.