Discount Dilemma: How to Take Advantage of Coupon Websites Without Hurting Your Brand / Starting a Business / Last Modified: February 22, 2017

Don't get caught in a discount dilemma! Coupons can be a great benefit to your business—if you know your way around them. Here's how.

Coupon websites are essentially online advertising sites which use direct marketing to achieve their goal. They develop a large database of customers by gathering their names, contact details and locations.

When they launch an offer, that offer appears on the coupon website or is sent directly to the e-mail of the subscribers via newsletter.

When someone likes the offer, they click on a button that leads them to an ad on the coupon website.

The advertisement usually provides the cost of the coupon, the amount of money saved by using that coupon, and how long customers have for purchasing until the coupon's expiration.

If there aren't enough customers who clicked on the "buy now" button until the coupon’s expiry date, the deal does not go through and customers aren't billed.

The main idea is that if customers like the deal, they will do anything for it to go through, and they will make an effort to gather the number of customers needed.

In order to do this, people are going to promote deals through their own websites and media such as Facebook or Twitter. This way, coupon websites will get the attention needed and they will attract new customers, meaning more money for them, as well as more money for people who made offers in the first place.

Digital coupons are getting more and more popular with time, but many retailers still think coupons might hurt their brand more than help its sales. That’s not true. Coupons can help a great deal if one knows their way around them.

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Benefits and tips for online stores using coupon websites

Targeting People in Your Area

As stated before, coupon websites compile entire databases of customer information, including their location. This way, they make it easier for small companies to reach the people in their area and advertise their brand to the larger local audience. It could prove valuable in gaining repeat customers.

Distributing Through Partners

When startup businesses want to participate in coupon website, they have to offer some benefits to their partners if they want everything to go smooth. It’s a good idea to provide a partner with special discount offers that they could distribute to their audiences while setting a quantity-based limit. Also, they could provide partners with commissions on sales, to incentivize advertisement of their brand. But the partners must be chosen carefully, and the number of partners too, because when you over-stretch the business, it'd be hard to monitor all of the websites at once.

Get Your Competitor's Audience

It is a proven fact that people generally stop shopping wherever they have been shopping for many years and bounce over to the store with coupons which are an obvious attraction. At the end of the day, everybody wants to save money and coupons are extremely effective at creating the impression that using them is the best way to save. So, once you dive into the coupon partner search, choose rightly like, they have built a strong Brand specific, and category specific customer’s database to promote SME to their big brand's customers.

Quick Promotion

Online coupons are all the more effective because their offers can get to the mailboxes of thousands of people with just one click. Also, thanks to their nature, customers play much bigger role than in other types of shopping. Here, it is in the customer's interest to get enough people to buy something because that's the only way they'll get it as well. People will start talking about an offer as soon as they like it, and by doing this, they will try to attract as many people as they can. This is practically a win-win situation.

Pay Attention to Compliance Managing

One of the most important parts of using coupon sites for your business is the way you monitor them. So keep checking with your bigger partners frequently. Make sure that everything is all right and whether there isn't something else you could do to maximize business development in certain cases.

Surprise Them With Kindness

It's a cheap price to pay for loyalty. Try to surprise customers by giving them discount codes in various places, and they won't hesitate to thank you by buying your product. This can prove to be of great importance because this way, you build a connection with your customers and boost loyalty toward your brand.

Look Beyond Conversions

Always look beyond simple conversions. You should develop your brand to be more than mere chasing of profit. Explore your target audience, and make codes that can be used through a great number of channels, and then create custom codes, for partners only. Also, you don’t be afraid to learn something new. Test different discount formats and find the best way to make conversions reach their full potential.

No Upfront Paid Advertising

Online coupon websites usually don't require payment for placing your offer. However, you should always have enough money to cover up for all the coupons sold.

Boosting Profits

Online stores will still be able to make some profit even when online coupon websites take their share of the sales. Perhaps one thing to consider is enabling some discount when a certain amount of money is spent. For example, for all purchases above $200 customers, have a discount of $50, etc.

Earn More by Being Wise in Your Offerings

Heard of up-selling and cross-selling? Here are some examples:

  • Up-selling: Say, a customer wants to buy some item from your store, and that item costs $20, but it is the lowest grade of quality. Then, what you do is offer them a higher-quality brand of the same item that costs $30 with a discount. Just do some simple math, and this is going to leave you at the profits of $10 per item in this case.
  • Cross-selling: When you offer one type of product that has a discount, e.g. you offer pillows at a discount, and your customer calls to make an inquiry, you also offer them bed sheets and mattresses. By selling these other two products, you can cover up the losses made by selling things at a discount.

For using up-selling and cross-selling, remember that you should be smart in what and how are you offering because it can backfire and if customers think you are being too pushy, they can easily go away.

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Don't Make One Code to Rule Them All

It would be a reckless move to make only one code and expect it to stay forever in the magazines. Today, it is highly probable that your code is going to get viral in a matter of minutes. Because of this, you should always make single-use codes, and limit their duration. This way, you'll be sure that your code won't show up on those coupon websites that it wasn't made for.

Improve Your Technology

There are now some companies who developed a type of technology that verifies coupon codes. This way, customers can be sure that the offers they bet on aren't outdated or invalid.

Be Generous When Offering Discounts

If you want this whole online coupon website thing to work, prepare to be more than generous. Today's volatile Internet shopper is highly averse to gamble on the discounts below 20 percent. So make sure that your products are tight enough and your budget is big enough to bring you some profit even when 20 percent or more of the price is cut off. Believe fully in your marketing, and be careful to make the right choices.

Don't Be Afraid to Experiment

This means that you should sometimes focus on increasing your sales beyond just coupon sales. For example, a lot of garages offer a free wheel balance. This way there is a big chance that their customers will agree to add an oil change or full service at the normal price. If you own a cosmetics salon, offer free manicures. You can offer that your customers pay full price in order to get a pedicure, too.

All of the above said, there are certain considerations to be kept in mind with the use of online coupons.

Take Care How Often You Place Discounts

When you use discounting as a marketing strategy, there is a risk that your customers will get used to these discounts. This means that they will develop enough resistance (or may have bought enough supply of your product) to patiently wait for the next sale or discount to buy again. Of course, in many cases, buying now or later may not make much of a difference. But for every business, there is a sweet spot it would ideally like to hit, and this spot will differ depending on factors like your pricing strategy, growth targets, brand positioning and others.

It is true that coupons bring paying customers in, but as a result of the discounts, profit margins often tend to be pretty thin, and the customers aren't as loyal as you would like them to be. After all, people that use online coupon websites are only loyal to the coupon. For example, people will often choose their lunch or traveling destination based on discounts rather than their needs.

Still, online coupon websites could be a great way to spread the word about your business quickly and get a lot of customers quickly. Just be wary of getting your business labeled as one of those "sale, discount, sale, discount" shops. Bear in mind that higher prices are usually being perceived as the offering of higher quality.

So place your discounts from time to time, not too often but not too rarely, either. You especially have to be careful not to coupon constantly.

Take Your Time When Picking the Right Network

Generally, networks are the best source for your business to determine the going commission rate among all the competitors. Prior to joining the network, most online stores sign up with a couple of the larger ones as an affiliate.

This way, they make sure that they have access to the network’s database, and they can do a search for the starting commissions being paid out by other businesses in their industry. Feel free to explore, and don't be afraid of trying again and again. Some of the trusted networks working with big brands are CommisionJunction, ShareaSale, Rakuten Network (previously LinkShare). You don't have to join any networks if you don't want to because maybe the right thing for you will come out tomorrow. It is always better to wait a few days or even a couple of weeks before deciding which network to join, rather than rushing. You could ruin your business completely.

Be Sure to Keep Your Customers

One fact that is, surprising is that businesses don't have any kind of plan on how to keep customers once they have attracted them with discounts. As mentioned before, people tend to be loyal to the coupons, not to businesses. In order to solve this problem, you have to develop a long-term program for repeat customers. There are numerous ways to do that.

Be creative, explore the market and listen to what people need. You should try providing some experience that your customers won't get anywhere else. For example, you can give them free chocolate bars or a glass of wine first time they come to your office. Also, you can provide some incentives for repeat purchases. This means that, for example, if you are holding a bakery, you could give your customers every tenth cupcake for free.

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One study revealed that affiliate coupon sites are positioned to market brands in ways those brands can't. This gives them a unique place on the Internet, and knowing this fact, we shouldn't be surprised to see that online coupon websites are growing rapidly and that today lots of people tend to shop off them rather than buying at other places. E-commerce executives reported that through partners, they are able to experiment and do thorough research. This way, they can determine which types of offer suit customers the best.

Also remember that customers always have a final word. This means that a lot of businesses rely on getting good reviews from their customers because that will naturally attract more people. Improving customer experience should always be your main goal. There is going to be a lot of competitive companies, and you will have to prove that you are the best. Be sure that your customers are always satisfied, offer them refunds if everything doesn't go well and it's your fault.

Online coupon websites can be a great way to support your marketing campaigns, especially for small businesses with little brand awareness or even for some of the more established brands, in case the idea is to, say, jumpstart a successful buying season. The coupon world and its rules can be intimidating to a first-timer, but if one navigates it right, online coupon sites can be a surefire way to not just increase sales but do it without hurting the brand.

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