Coupon marketing and loss leader advertising tips

One of the best methods of driving consumer traffic into the business is to entice them with a bargain. Creating an effective coupon marketing campaign can be an inexpensive method of driving traffic into the store compared with other expensive advertising methods like radio and television ads. Using coupons as a loss leader is often required to get a substantial amount of potential customers through the door.

Loss Leader Advertising Marketing Campaign

The basic premise for loss leader advertising is to create a marketing campaign that’s such a bargain that the consumer will jump at the chance to visit the store. Car dealers were notorious for this type of advertising. They would advertise certain vehicles, at or below their cost, to entice customers to visit the dealership. Once the consumer walks through the door, the dealer would try to talk them into another vehicle where they could make a decent profit.

The Pitfalls of Bait and Switch Advertising

Bait and switch is the practice of advertising a product and then switching the customer to another product with more profit potential. This type of advertising is deceitful and is not conducive to the long-term goals of growing a customer base. In fact the practice of bait and switch can be illegal in some areas if the advertised item was not available when the ad was placed.

Loss Leader Coupons and the Competition

In order to have an effective coupon marketing campaign, the advertised specials must have an element that attracts consumers. That element largely depends on the type of business, but in most cases an unbeatable bargain price is the most effective element of coupon advertising. Before creating a campaign, shop the competition and see what there doing.

What advertising media are they using?
What products or services are they advertising?
What is the advertised price of the coupons?

Increasing Market Share and Customer Retention

The whole premise of using a loss leader should be geared towards increasing market share with customer retention techniques. The old bait and switch tactic is used to make a quick sale where the customer will normally not return. When a customer is enticed to visit a business with a loss leader coupon, the WOW factor should be utilized to exceed their expectations.

When a customer’s expectations are exceeded, there is a better than average chance that they will visit the store time and time again. By creating a customer friendly environment, where the customer is awestruck by the service they receive, the company will increase customer retention and market share exponentially. Loss leader coupon advertising is all about getting the consumer in the door. More importantly is how the consumer is treated once they walk through the door.

Planning ahead for an influx of consumer traffic is important to increase customer satisfaction and retention. Discuss the coupon campaign details with the company employees that will have direct contact with the customers. Make sure processes and procedures are in place for better customer service and don’t forget the WOW factor.

Coupon Advertising and Marketing Campaigns

Radio and television ads can be expensive and it can be difficult to determine their effectiveness. Creating a marketing campaign using coupon advertising can be a cost effective way to increase business traffic. If a coupon campaign is done properly, the company can get an idea of its effectiveness compared to radio and television ads.

Coupon Advertising Targeting Methods

There are quite a few options when it comes to coupon advertising target methods. The best type of media methods for targeting customers largely depends on the business model. Some of the different types of media methods for coupon market targeting include:

Newspaper inserts – can be quite expensive. Normally larger retail stores use newspaper inserts due to the mass circulation. This method targets the masses and is not a good choice for niche type business.
Bargain classified print – is a much cheaper method than newspaper inserts that targets a large consumer base. Bargain classified print is usually mass mailed and has a large variety of advertisers in each publication. The business usually can pick certain zip codes or geographical areas of their choosing.
Company website – If a company has their own website and caters to a local area, using coupons on the website is extremely cost effective. If the Webmaster is an employee of the company, the cost is virtually zero. There should be a link to coupons or specials that is easy for the user to find.
Direct mail – can be expensive. Besides the print material there’s also the cost of postage to consider. If a company can procure a mailing list for consumers that are more apt to buy their product, direct mail can be a very effective form of coupon advertising. Procuring a mailing list of consumers from an outside source can also add to the cost of direct mail.

The Importance of a Coupon Expiration Date

One reason that an expiration date is printed on coupons is for price protection from inflationary price increases. The most important reason however is not for price protection but to create a sense of urgency. If an expiration date is months away, the consumer is more likely to throw the coupon in a junk drawer and forget about it. By using an expiration date of less than thirty days, the consumer is more likely to use the coupon.

Coupon Marketing Campaign and the Competition

Before creating a coupon campaign, see what the competition is doing. If the competition is using coupon advertising, there are three main points that should be considered.

What advertising media are they using?
What products or services are they advertising?
What is the advertised price of the coupons?

A decision has to be made whether or not a different advertising media should be used, what products or services should be advertised and what prices should be used to beat the competition. Once these decisions are made, it’s important to discuss the coupon campaign details with the company employees that will have direct contact with the customers. Once a campaign has run its course, the effectiveness of the coupon campaign should be analyzed.