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Coupon Campaigns: Can They Work for Your Small Business?

Extreme couponing seems to be all the rage these days (not to mention the title of a popular show on […]

Extreme couponing seems to be all the rage these days (not to mention the title of a popular show on cable). Coupons can certainly pay off for consumers, but what about a small business owner like you? If you’re game enough to give coupon campaigns a try, there are some considerations you should keep in mind, courtesy of the U.S. Small Business Administration (SBA).

First, accept the fact that coupons will not be a money-maker for your business, but they may be a good tool for attracting new customers and building brand awareness, especially if you’re entering a new market. Once the customer is in the door or on your website, you can try to upsell and create a repeat customer, which will boost your bottom line in the long run.

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Determine if coupons are a good fit for your particular type of business. “Coupons work best for location-based, product-oriented businesses where local customers can realize quick and easy savings,” explains SBA, adding that good examples are restaurants, hair salons, hotels, spas, pet grooming services, yoga studios and the like.

Before you implement a coupon campaign, you should be ready to scale up your business to meet the potential demand surge it will (hopefully) generate. This requires that your operation is capable of expanding and your staff can be readied to handle additional traffic efficiently.

Finally, make sure you can afford to offer the discount for the duration of the campaign. Ask yourself if you have enough profitable business coming in from other product lines or time periods to overcome the costs of your special offer, SBA advises. “Weigh your long-term goals and how coupons can benefit them,” it adds. “This is a top consideration, especially if you are exploring social or group-buying coupon sites that typically take 50 percent of the revenue you get from your advertised offer.”

Before you proceed with a campaign, be sure to develop a firm couponing policy that keeps your losses to a minimum. SBA cites the following tips from The Retail Doctor’s Guide to Growing Your Business, written by Bob Phibbs:

Do not allow combined promotions, especially accepting buy-one-get-one-free (BOGO) promotions combined with other coupons. If you’re not careful, you may end up giving away merchandise, which is not the purpose of this exercise.

Eliminate identical coupons by limiting the number a consumer can use per purchase, the number per customer and the number that a consumer can use over a specific period of time. “If you can, use your point-of-sale system to track coupon code usage, and don’t forget to advertise your policy and the expiration date on the coupon,” notes Phibbs.

Accept your competitor’s coupons cautiously. If you choose to accept other retailers’ coupons, develop a policy that outlines the limits for their use at your store. Avoid being burned by out-of-date or invalid offers by checking expiration dates and other limitations that your competitors may have placed on the coupons.

Clearly post your policies and educate your staff to avoid confusion. Advertise your couponing policy right on the coupons themselves as well as at the point of sale. Train your staff to understand the policies and how to deal with potentially over-zealous coupon clippers.

With a lot of planning and a little luck, coupon campaigns can help create a new revenue stream for small business, making them worth the time and money invested. Just make sure that the discount you offer is offset by the sales it generates.

About the Author: Beth Longware Duff writes about small business practices for

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