Businesses use coupons to encourage more sales
By: Mark HaslanAugust 24th, 2010
One of the most important aspects of successful direct mail campaigns is the offer. By providing prospectss with appealing promotions, business owners can encourage consumers to make purchases they may have not committed to otherwise. In fact, one common rule of thumb that many marketers follow is the 40/40/20 guideline, which suggests entrepreneurs concentrate 40 percent of their effort on designing effective offers.
Now, it seems many businesses are relying solely on printing and mailing coupons to generate additional sales. The recent interest in coupons is driven primarily by the success of online startup Groupon, which sends coupons to consumers via email. As Bloomberg Businessweek notes, companies are now using direct mail to send offers, targeting a market that Groupon’s service is not.
Because of the reach that direct mail has in comparison to digital platforms, many businesses are finding success. “It’s a very large and quickly growing phenomenon. It’s so easy for advertisers to participate, and they get immediate, measurable results. They get a check, and they get customers,” Gordon Borrell, chief executive officer of research firm Borrell Associates told Bloomberg Businessweek. The firm estimates the direct mail market accounts for $38 billion marketing dollars per year in the United States.
For example, Angie’s List, a business review website, began its own print coupon campaign, targeting local consumers in Indianapolis. The firm told the source the campaign generated a tremendous boost in sales, and the site will soon be expanding to digital coupon emails and sites.
While many companies are contemplating using coupons, Deanna Willsey, a direct mail expert at Valpak, told Bloomberg Businessweek that these campaigns should complement, not replace, traditional direct mail initiatives. Coupons can provide a “short-term strategy” for companies with a small base of core consumers, but isn’t sustainable in the long term, says Willsey.
A recent article from Direct Magazine suggest the most effective promotions offer consumers free shipping. Other effective coupons could give consumers a specific dollar value off, a percent-based discount or free promotional items. The source observes that free shipping can boost sales by 20 percent in many cases, while gifts tend to be the least efficient.
Additionally, Direct Magazine suggests determining return on investment when designing a promotion. This enables entrepreneurs to run coupon campaigns that don’t negatively impact their companies’ bottom lines.
Related posts:
