When you give out coupons, the people who tend to use them are … people who like coupons.

Duh!

In general, coupon clippers are people who like to get the lowest price on each purchase, who have little loyalty to the actual product or your company. I talked about a good example in this article in the Small Fish newsletter.

Here’s what this means:

If you think you’re “buying” new customers by giving out coupons, you’re probably kidding yourself.  Customers will love the discount, and then immediately flee to the next company that offers one.  Loyalty is low.

That said, there’s a few exceptions that can work:

  • If you’re the new kid in town and you want visibility for your business, you can get some people to walk in the door on the basis of a coupon.  But you’ll have to deliver a pretty exceptional experience if you want them to mention it to their friends.
  • If you’re introducing a new product that you’d like to get your current customers to try, a discount might cause them to give it a try.  Sometimes this might look like a coupon, or a package discount, or even a “great customer discount.”

This concept is especially relevant with people who are thinking about social purchasing sites like GroupOn or Social Mention.  There’s been some horror stories about how companies were ruined by offering deep, deep discounts, and then getting no loyal customers out of the bargain.

Make sure that the discount deal makes sense in its own right, as a money-maker in its own right or to get publicity. But don’t expect loyalty unless you deliver a truly exceptional experience for those coupon-clippers.

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