6 Coupon Mistakes Businesses Must Avoid

When appropriately used, coupons are one of the most effective marketing and sales strategies a company can implement. They encourage new customers to make a purchase, instill loyalty in existing customers, and may even reactivate dormant customers. However, simple mistakes can render a coupon campaign useless. Even worse, a big mistake may damage your company’s image altogether. So how do you ensure you’re using safe and effective coupons that prosper, not harm, your business?

6 Coupon Mistakes You Can’t Afford to Make

While coupons may seem relatively minor in the grand scheme of your business’s operations, the reality is that they say a lot about your brand and what it stands for. Effective coupons backed by meticulous strategies will push your brand in a positive direction. On the other hand, hurried coupons with little planning can actually harm your brand’s perceived value and damage existing customer relationships.

In crowded marketplaces where dozens, or even hundreds, of different businesses are battling for the same customers, you can’t afford to damage your reputation or miss out on a sale. As such, it’s critical that you avoid the following coupon mistakes.

• Poor design. While the actual deal itself persuades customers to use a coupon, it might be the aesthetic appeal that gains their attention. You can’t design a coupon in a basic paint program and expect it to reflect your brand in a positive light. Spend the necessary time and money on designing attractive promotional materials that properly exemplify your brand’s values.
• Confusing or complicated offers. The offer needs to be short, concise, and simple. If you need to explain additional information or add a couple of exclusions, use the bottom of the coupon for fine print — but don’t overcomplicate things. Confusing deals frustrate customers and lead to frequent errors by cashiers and salespeople. It’s best to stick to buy-one-get-ones, percentage discounts, and dollar-off deals that customers already understand.
• Useless deals. Some companies operate under the notion that any coupon is better than no coupon. Useless deals cheapen your brand image and make you look greedy — very few customers care about saving 10 cents on an item that costs $20. Make sure customers will actually be receptive to the coupon before you implement it, and always proofread carefully before printing or publishing; the wrong number or decimal place can cost thousands of dollars.
• No expiration date or limits. An expiration date controls the length of the deal. You can always choose to accept expired coupons from time to time, but you should never run a promotion indefinitely, and any limits or restrictions should be clearly included in the fine print.
• Having no tracking strategy. Whether you’re dealing with physical or digital coupons, you need some sort of tracking strategy so you can gauge how effective a promotion has been, what it’s cost you, and whether your business has lost money, broken even, or profited.

2 Case Studies on Poor Coupon Strategy

These all sound like mistakes that could harm a company’s bottom line and reputation, but it’s sometimes challenging to understand the full effects without seeing how they play out in real life. Here are two real-world examples worth learning from.

JC Penney

In 2012, the struggling retailer decided it would put an end to coupons and promotions, claiming that most retailers used inflated pricing anyway just to make coupons seem like good deals. Instead of following the trend, JC Penney boldly introduced “real prices” — no coupons necessary.

That was a costly miscalculation. Sales dropped off, customers no longer felt the satisfaction of getting a deal, and JC Penney found itself reeling. The strategy didn’t last more than a year or two before the company reintroduced coupons, discounts, and other promotions.

Best Buy

In 2013, the popular electronics retailer promoted a coupon offering customers $50 off a purchase of $100 or more when they paid with a specific credit card. It sounded like a great deal — until Best Buy realized it had forgotten to put any limits on the coupon, and ended up losing a significant amount of money. Rather than owning up to the mistake, the company pulled the deal and lost a fair amount of customer goodwill in the process.