Coupons: Are They Worth It?

[ChrisAllen]

I own a small paper goods and gift shop. Like most, our margin is 50%, given there is a Paper Source and another paper store both within 10 miles of my shop, I struggle to increase my margins. Now that we are heading into summer, which is typically slower, I am thinking about offering a coupon through Square to try and increase business. 

Is it worth it? Has anyone with similar margins successfully offered coupons that actually increased business?

Thanks! 

[isabelle]

Hey @ChrisAllen!

I'm going to tag some of our Super Sellers who may have experience using discounts/coupons with their own business: 

@pessosices @Ravenssong69 @shopfybr @LocavoreStore  @TCSlaguna @londontea @HC_Charlie @alexandriak @ber @ryanwanner @GourmetOnWheels @Doran @allwhowander @VanKalkerFarms @homeprogreen @jjgard

Hopefully they can offer some insight! 🤓✨

[homeprogreen]

I don’t send out very many coupons, normally when someone gives nice feedback on a purchase via the square link on rreceipt. But I have had really good response to using the Square loyalty program. I give 1 star for every 20 dollars of their purchase and when they have 10 stars on their account they can redeem them for 10% off their purchase. Since it doesn’t round up or include the sales tax in the calculation for a star it’s a good way to increase each sale. A customer will normally add to their purchase in order to avoid losing out on a star over a couple of bucks   

[HC_Charlie · Accepted solution]

Thanks for your question! I have tried coupons, and in most cases I don't seem to get much response...BUT I keep trying LOL! I have a small gift shop that focuses on greeting cards and stationery. There are many thoughts on offering coupons; some people say it chases after the value shopper (who you don't really want anyway in most cases), and some say it "cheapens" your offerings. I wish I had a formula that worked consistently. Sometimes I tried just GIVEing something away for a promotion, but I had people come in just for that so they did not become a repeat customer. I would recommend you try a few methods of implementing coupons and see what might work best for you.

Here are some approaches you could try:

• Try to find an item or two that you could purchase at a larger discount, so your margin would be over 50% on those items, and use those as incentives in your coupons.
• Offer a coupon that multiplies a customer's savings; for example, they could save 5% on their first visit or item purchase, and then increase the percent-off with each return visit...or by adding another item to their purchase. Buy one 5% off, but two 10% off etc.
• Use a coupon to give away a Welcome Gift or Summer Gift pack. Get some promotional pens or items made with your logo, find a slow moving item or make a special box set of items that you have a better margin with. And then offer that gift or welcome pack when shoppers spend over a certain amount, say Present this coupon with your $50 purchase and receive a FREE Welcome Gift.
• You can also create a "referral" coupon or program, where you offer a coupon if an existing customers brings in a new customer or refers your store to someone new.
• I've been using Square's Loyalty program for a few months and I think it's starting to generate repeat business. I like the loyalty program because it rewards people who spend the most money, versus just offering a deal to potentially a one-time customer

AND with any coupon or strategy to bring in new customers.....MAKE SURE YOU ARE CAPTURING EMAILS AND CONTACT INFO! This data a very valuable! If you use Square Loyalty / Marketing it makes it easy to capture this info. I also use the Square Register with a customer facing screening which makes implementing Loyalty and Marketing so easy and seamless. My customers love how quickly they can check out!

Hope these ideas help and please share if you find luck with a specific approach or idea. Happy retailing!

[YodieLadyWho]

I’m in food and beverage, but I think it’s probably the same across the board.  I’ve found that when we send out coupons we get an increase in business, but they don’t use the coupons.  It’s kinda funny.  I think people in general aren’t comfortable using coupons outside of a corporate business.  You’re a real person with a face and a smile and they don’t like to feel like they’re lowering your profit.  They’re happy to give you business and just needed a reminder that you’re there, so in that way a coupon is effective.  One thing I do that would do well for you too is donating gift cards for raffles and giveaways.  Sports teams, public school fundraisers, churches, other small businesses.  A couple of hours ago I opened a social media account to see I was tagged in a post from a local dentist who has a huge following because of donations.  I give an amount that is enough for a family of four to come once and have enough left to want to come again.  That way they’ve been twice and we have an opportunity to make a regular customer out of them.  It’s cheaper than advertising and most of it is a tax write off.

[Doran]

So I have a small boutique and a spa I've tried coupons in both settings without much luck.  But, I do have success with buy X get Y promos.  For example, this month we are doing buy a facial package receive an SPF for free.  In the boutique, we are doing buy 3 candles get a box of our signature horoscope matches for free.