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Use a Coupon

Coupons are great for retaining key customers or attracting new ones to your business. They appeal to customers because of the savings they perceive they will make. However, in reality, it is likely that they will be spending more money.

Discover how coupons can be used in your business to advertise your brand and bring customers to you.


Are Coupons Cost Effective?

The effectiveness of coupons is often questioned because of the cost involved in producing them and the lower revenue each product is sold for. However, vouchers and coupons can be used as a method to attract customers to your business and delight them with the quality of the product and service.

Once you have hooked your new customers they will become loyal and buy more of your product, at the normal cost.

Therefore while coupons may cost your business in the short run, in the long term your revenues can be increased significantly.

Coupons can also be effective when you are looking to reward customers for participating in market research. By offering a 5% or $5 voucher you can attract more people to partake in important surveys to refine marketing materials or new products.

Other businesses have used coupons as a way to sign people up to mailing lists or make a purchase over a certain amount. For instance, offering customers a $5 voucher if they spend over $50 in store on a particular day.

Vouchers can also increase the brand loyalty in long term subscription customers. Mobile phone operators do this by offering discount vouchers to events, experiences and products from third parties as a way to reward long contract users.

If the experience has been good enough, the memory of the positive experience will be with the customer forever and who provided that opportunity.


The Attraction of Coupons

Whether coupons attract customers cannot be questioned. There are numerous websites which actively seek out, promote and distribute coupons to bargain hunters. Some of these bargain hunters will use coupons as a way to find a new brand or product.

In this manner coupons can be particularly useful. Getting your brand featured on one of these websites will expose it to countless members of your target audience. The value of the coupon will also be significantly increased to the target audience as it comes from an independent source. This will increase the uptake of the offer as well.

You can increase the attraction of the coupon by aligning the design of the voucher to match your brand image. There is also the option to add a use-by date on the voucher to create urgency and encourage quick use.


Digital Or Physical Coupons?

With the rise of the internet and email there has been an increase in the issue of e-coupons. These can be very effective because they can take advantage of the coupon hunting websites and social media. This allows you to attract a large audience through viral marketing.

However, digital vouchers cannot be touched by the target customer and therefore an important physical connection cannot be established. Audiences who are able to develop a physical connection have a higher uptake.


In What Instances Should You Use A Coupon?

There are many opportunities which you can issue coupons. Here are some of the best scenarios:

  1. Attracting New Customers

If you are looking to expand your brand’s reach and attract lifelong customers – coupons can be highly effective.

Placing coupons inside publications or with local businesses, where your target audience might visit, can be one effective method of distribution. Coupons in this case should be such that the cost of producing them and the discount offered does not mean you will make a loss on the sale, but can still be significant enough to be meaningful to your customers.

This does not discount you from offering a coupon for a free product, as long as the cost of producing (or buying) the free product can be covered by the profits of the qualifying purchase.

  1. Increasing Value of Purchases

Attract customers to purchase more by offering them a voucher when they increase their spending. This is particularly useful if you know the average spend is below a certain point.

In this case you want to ensure the value of the voucher offered is less than the profit you would make on the extra purchases.

For example, if you have an average spend of $30 per customer and want to offer a $5 voucher for every $50 then you have to have a profit margin of at least 25% on the additional $20.

  1. For Customer Service

Customers aren’t always happy with the service they receive. Offering a voucher to retain their custom can be one option for your brand.

Supermarkets, including global brand Tesco, often use this. They even offer an automatic comparison of their price compared to that of their major rivals. If the shopping trip would have come to less elsewhere, they issue a voucher for the difference. Alternatively, if the customer is unhappy with a product, Tesco will often issue vouchers worth up to $10 depending on country.

This style of voucher allows the brand to retain key customers who they might have lost otherwise. However, they can only afford to do this because of the bulk of purchases the average customer makes. They know that another bulk purchase will more than make up the voucher value they have issued.

  1. As A (Loyalty) Reward

It is often good to reward your key customers by giving them something free every so often. This doesn’t have to be something sold by your business but could be a low cost option such as an ebook.

The idea of this voucher system is to surprise and delight your audience. It also creates a scenario where they spread word about your brand to their peers on social media or offline.

Another reward might be when they have signed up for your mailing list. Email contributes up to 25% of online purchases and therefore you can often make up the cost of the voucher.

Alternatively, place a condition within the voucher where the customer has to spend a certain amount to claim.



Vouchers are an effective sales tool for attracting your audience to your brand and encouraging them to become loyal customers. They can also be used to entice back customers who are unhappy with your product / service.

With a well crafted voucher which has value to your customers, you can create excitement for your brand by using peer-to-peer promotion and social media. This will increase the traffic to your website or store and allow you to increase your revenue.


Action Steps

  • Calculate your average spend per customer and profit margins.
  • Offer a voucher to new customers that still allows you to make a profit.
  • Create a voucher system where if customers sign up to your newsletter, they are rewarded on their next purchase.
  • Offer a voucher for those customers who increase the amount they spend.

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