Online Sites Pitfalls

While giving coupons is a very good and effective way rewarding loyal customers as well as attract new ones, it is good to checklist for you to be able to identify if it is the best promotional tool to use in your business. Before you decide to employ coupons as a promotional tool, there are a number of factors that ought to be considered such as the model of your business, the goal set to be achieved at the end of the promotion among others. This may not always be easy to sort, though using coupons is an excellent way of advertising, fixing the various aspects of your business may not be a straight forward thing. Think through the whole process, the cost you may incur among other factors before you employ it.

Some of the pitfalls include.

Always make sure what your business is giving away is what it is able to afford to protect you from incurring unpredicted costs. Always set the amounts that are collected from the various coupons are kept separate from the other amounts or calculations of your business.

The use of coupons may not be the best promotional tool as at certain times customers may tend to purchase only the products which are on offer. New customer who came as a result of the promotion may fail to come back after the promotion is over. According to research, over 25% of organizations that employed the use of coupons for promotion reasons have reported that it was not successful. Only a small percentage of consumers who came due to the coupons purchased goods or services that were beyond the value of the coupon and an even lesser percentage of the group came a second time to get the same products at what is full price. According to the same research, restaurants seem to be the ones more susceptible to the outcomes which are negative, with over 40% of the ones that took part in the study reporting losses from the coupon promotions.

Cannibalization of the normal revenue. This occurs when you are made to sell products at a discount to consumers who would have bought from you on a regular basis and at full price anyway. The best way to avoid this is by limiting the offer only to consumers who are purchasing for the first time or buy making the promotion runs in areas that are outside the area you normally target.

The employment of the P.O. factor may help alienate the group of people who do not qualify to get the discount. For instance those customers who are loyal may feel like they want to get a reward, instead of catering only to new customers.

Your customers may opt against paying the regular prices and instead wait for the promotion or coupons.

The use of coupons as a promotional tool may tend to lessen the known quality or value of the products that are on offer with the products consumers base their value according to their prices suffering the most.

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