Why Businesses Give Coupons? Are They Effective As A Promotional Tool?


Coupon advertising has always been an attractive staple for every business. In fact, it is inarguably considered to be an indispensable tool to attract new customers and kick-start an effective marketing campaign.

Coupon advertising is not a simple way to appease those deal hunters that may be interested in purchasing your products, services, or solutions. Rather, it’s an essential way to entice new customers. Obviously, everyone appreciates a great deal, isn’t it?

However, the decision of offering lucrative money-off coupons may be a really tough call for all retailers, especially if you are a small business owner where the profit margin is low. But, certainly, this effective promotional tool has the potential to make your brand more appealing to the qualified patrons.

Apart from drawing new consumers and developing a brand image, coupon advertising will keep your existing customers coming back and even “re-activate” the former clients. It also gives your business a competitive edge and makes it easily stand out from your rivals.

Research studies have proved that more than 127 million adults in the USA (per year) redeem digital coupons and grab mind-boggling discounts. It’s even speculated that the number of coupon users will drastically increase in the upcoming years. Another research unit (Juniper Research) has projected that there will be more than 1.5 billion mobile coupon users by the end of 2019.

The aforementioned statistics certainly prove that coupon advertising will continue to remain an influential and highly effective promotional tool for both tangible and non-tangible products and services. In this context, let us now reveal what’s the purpose of giving coupons to customers.

Why Should Businesses Give Coupons?

  1. Attract more customers: The primary goal of offering money-saving coupons is to entice, encourage, and attract more consumers to try/purchase your products and services. In addition to this, coupons will confer you an excellent opportunity to persuade new consumers to switch into your brand. Thus, make it count!
  2. Increase Sales: As mentioned earlier, usage of lucrative coupons will attract more potential customers to try your service. As a result, our outlet will have increased sales and higher revenues.
  3. Free Up Room: “Discounting items on sale” will enable you to easily free up space in your store and showcase new products. For example, if you have products that are not getting sold for several months, then it’s the time to take a meaningful call. So, issue a discounted coupon so that those items seek the attention of your customers.
  4. Minimize advertising costs: The name of your company, address, and other appropriate information will be prominently featured on your coupons. Therefore, coupons can be used as a cost-effective marketing cum advertising tool to raise a brand awareness or create a unique brand image.
  5. Competitive positioning: Unless you’re selling a truly unique product, you are actually competing against a plethora of rival retailers. But, as you already know that your customers are deal-sensitive; so, if you can offer them great deals and coupons, they will surely make a choice of purchase. With this last one, you have five basic benefits for businesses to give out discount coupons.

Possible Downsides

Now, let’s quickly take a look at the possible dangers for a company to use discount coupons. What are the possible dangers of using discounted coupons for a company? The biggest con of using such coupons is that they will cost you money. Clearly, any discount that you’re offering will lead to less profit in your pocket. Hence, the key is to wisely calculate whether that discounted amount will make a difference to your profit margin by bringing back your old customers and introducing new customers to your outlet. In this way, you can analyze if using coupons is worth for your business or not.