How to Cash In on Digital Coupons
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Digital coupons are an easy, cost-effective way to attract local customers. But with so many coupon sites to choose from, how do you know which site is the best fit for your business?
There are hundreds of coupon websites out there, with more popping up every day. This is thanks to, in no small part, the number of consumers turning in droves to digital coupons. For the first time the growth of digital coupons has outpaced that of printed newspaper coupons, growing by nearly 60 percent in 2010 compared to 11 percent growth for printed free standard insert ads, according to an August 2010 report from Kantar Media.
There are several digital coupon models to choose from, but small to medium businesses that rely on foot traffic will benefit most from social-driven sites that require consumers to purchase local digital vouchers.
There are many benefits to using a social coupon website. First and foremost, it’s free advertising that’s targeted to customers in your area, and many of these sites do not charge a fee to run a promotion through their service. This means no upfront costs to you.
Second, it’s word-of-mouth on steroids. These sites rely on and encourage users to spread the word about a deal they like through e-mail, Facebook, or Twitter, often by offering incentives if friends buy a deal. Many businesses report substantial increases in foot traffic during a promotion period.
Finally, it's guaranteed money. These social coupon sites require consumers to purchase a deal upfront, which means you get paid whether or not they end up walking through the door.
Of course, digital coupons aren’t perfect. For one, there’s almost always a minimum deal amount in order to participate with the site. This means you must be willing to offer a service or product at sometimes 50 percent off or more. What’s more, social coupon sites can take as much as 50 percent commission on what is collected in addition to your already discounted offer. Be realistic about what your business can afford to offer and understand that these sites are best used as a marketing effort to attract new customers, not as a way to make money.
Another thing to consider when using digital coupons is that you may be attracting the wrong customers. The Internet is rife with stories of businesses (usually small businesses) that nearly broke the bank with a digital coupon offer because it attracted customers who were unwilling to spend additional money beyond what the discount voucher required. Other complaints are about the lack of repeat customers.
Again, the best way to avoid losing money is to only run a coupon discount that, on top of the site’s commission, you can afford to offer. Also, have a plan in place ahead of time about how to convert first-time customers into regulars. This can include, for example, collecting e-mails to build relationships and training staff to handle the influx of traffic so customer service is at its best. Finally, research the demographics that each social coupon site targets. Groupon, for example, mainly attracts singles, women, ages 18 to 34, with 29 percent of users making $100,000+ a year.
Now that you have a better idea of what to expect from using digital coupons, here are three local social coupon websites worth looking into.
How it works for consumers: Consumers enter their e-mail address to receive daily, local deals that are at least 50 percent off. If they like a deal, they purchase it on the spot and receive a digital voucher to redeem later.
How it works for businesses: Once you sign up, you’re assigned a local sales rep that works with you to create a compelling promotion that will drive customers through your doors. You choose how long your promotion will run (typically 24 hours), and you receive a check within 15 days after your promotion ends, minus a commission fee.
The bottom line: LivingSocial appears to be the most business-friendly coupon site in terms of customer support and freedom to control your promotion.
Getting started is as easy as filling out your name, e-mail, phone number, business name, website, and zip code. You’ll then be assigned a local representative who understands your market and will provide analytically driven counsel on what type of deal you should run based on your goals and capacity. The rep will even visit your business to provide face-to-face support.
Unlike most digital coupon sites, LivingSocial gives you more control over protecting your brand by allowing you to review promotional copy, limitations, and image use before your coupon is sent out to thousands of consumers.
How it works for consumers: Consumers buy a deal they’re interested in. If the minimum number of people buy the deal, they are charged and sent a link to print their Groupon. If not enough people join, no one gets the deal and nothing is charged. By requiring a minimum amount of people for the deal to be valid, businesses get a large stream of customers.
How it works for businesses: After you provide some basic information about your business, a Groupon representative will contact you and help you design an offer tailored to your needs that delivers on your performance goals, expectations, and service limitations. If your deal meets the minimum purchase requirement, you will be mailed a check minus a commission fee. Along with your check, you’ll also be provided an easy-to-use list that allows you to track your new customers as they redeem your Groupon.
The bottom line: Groupon is currently the most established and well-known social digital coupon site, which means you’ll be exposed to its huge customer base of more than 22 million. Groupon prepares you for the steady influx of traffic you’ll see by offering you and your staff advice through phone support, checklists, videos, webinars, and more.
Groupon is perhaps the best digital coupon site for providing information about your customers with tools to measure your marketing effectiveness. Groupon offers marketing advice on how to convert Groupon customers to your own, including how to collect e-mail addresses onsite and how to create an ongoing dialogue with customers to build strong relationships. A two-way ratings feature will even let you identify problem customers so Groupon can address issues quickly and prevent these customers from receiving Groupon e-mails.
Eversave
How it works for consumers: Consumers receive daily e-mails containing local and online deals. If they see a deal they like, they purchase the deal and receive a voucher redeemable with the merchant for the product or service specified on the voucher.
How it works for businesses: Eversave is similar to LivingSocial in that consumers purchase a voucher for your product or service and are encouraged to share their voucher with everyone they know. Deals may last for several days, as opposed to Groupon and LivingSocial’s deals, which typically last just 24 hours. Like the other sites, no fee is charged except for the commission that is deducted from sales made. If you still have questions, be sure to call or e-mail -- this goes for all of the above-mentioned sites (contact information can be found at the URLs provided).
The bottom line: Eversave is one of the top five coupon sites by unique visitors, according to comScore Media Metrix. Like with most of the social coupon sites, Eversave customers are encouraged to share their vouchers through e-mail, Facebook, or Twitter links, but Eversave also bribes users to promote your deal by offering a $12 savings reward for each first-time buyer that uses their personalized link, which means word-of-mouth will spread quickly about your deal.
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