I was wondering what everyone thought about offering discounts and coupons to drive more traffic to your shop. Pro or cons. I recently posted a new ad in a college paper offering a 10% discount if a student shows their ID. Good or bad idea?
This is an area we are asked about a lot from customers shopping POS. First, I'll say again that unless you are tracking (accurately) your discounts and specials, you are missing out on if they are working.
We have a lot of customers who use bounce back coupons and discounts to try and build loyalty. The goal is to give the customers another reason (besides quality, customer service etc) to come back. John P is right in that this can be a double edged sword - You don't want to be the shop in town that people only go to because the price is cheap.
On coupons - Brady - I agree. The nice thing about a coupon is that you can market it as a $3.00 drink and get a FREE $1.25 pastry. You as the owner are not out $1.25 but the customer feels they are saving a $1.25. People expect coupons to have expirations as well. A $1.00 discount just does not ring as well with me as a FREE item.
On the Loyalty Card - Jason, I agree this can be a great promotion. Any of the buy x get 1 free seem to work well. The only issue is controlling if the crew is only punching it one time for each drink instead of three (true story and happened recently to me). One note, I had a customer that told me a long time ago that they try to brand it as a REWARDS card instead of a LOYALTY card. He told me they wanted the customer to feel rewarded by the store as opposed to loyal to a store - Possibly just a bit of pop psychology but I thought it made sense.
"Loyalty card" buy 10 get one free is (at least) a perpetual 10% discount. Account for this in your margin projections, and understand what it will do before you begin to offer it. Discontinue at your peril! Honestly, there are lots of ways that you can build loyalty... this card is not going to do nearly as much as great quality, atmosphere, relationships, service, etc. It does reward your best customers though, which is nice. We do it.
With promotions, remember that your purpose is to drive increased traffic to your store. Mike's point is good - you want something that your prospective customer will notice but that you won't lose your shirt on.
On the subject of tracking, lots of people just don't use coupons. Your ad is more effective than it looks based on coupon returns. We've done a few coupon ads in publications and a few flyer distributions... in all cases, lots of people said they saw the flyer or ad but didn't redeem the coupon. The key is getting their attention and letting them know you are there.
Ideas For discount:
Buy 6 get 7 free
get 20% off of the second cup if customer buy another one at the same day
or you can do day time special when it slows at your business, like any coffee any size for $2.25 or whatever price.
Just a thought, instead of paying for an ad, you can have the college paper write an article about you and throw in a 10% discount in the article. Sometimes the numbers of coupons returned to the money payed for the ad don't justify it. If you get 15 coupons a day instead of 15 coupons a week, then it might be worth it.
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