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Running a successful small business can mean offering customers a reason to keep coming back. One way to help accomplish this is to strategically plan discounts and promotions and use them to your advantage throughout the year.
Here are some strategies from several entrepreneurs for leveraging discounts and promotions to help drive sales year-round.
Benefits of Leveraging Discounts and Promotions Year-Round
Many small-business owners agree that taking advantage of discounts and promotions helps make your small business stand out and stay competitive.
“Consistently using discounts and promotions can help maintain customer engagement and drive sales throughout the year,” says Chris Buitron, CEO of pest control companies Mosquito Authority and Pest Authority. “This strategy can attract new customers, retain existing ones, and create a sense of urgency for purchasing.”
“No matter the season, discounts are essential to incentivizing customers to engage with small businesses in ways that are mutually beneficial." —Matt Graber, co-owner, Cool Hand Movers
No matter your clientele, every customer likes a deal, says Bill Laurita, president of textile company Swans Island Company.
“Years ago, we never discounted, fearing it would diminish our brand,” says Laurita. “As we grew and took on more inventory costs, however, the need to turn product more quickly increased. In the process, we discovered that even those with significant disposable income like a deal.”
Discounts and bundled promotions can be key for small businesses, says Matt Graber, co-owner of Cool Hand Movers, which services the Greater New York area.
“No matter the season, discounts are essential to incentivizing customers to engage with small businesses in ways that are mutually beneficial,” he says.
Strategic Coupon Distribution
Coupons are a popular vehicle for leveraging discounts year-round. According to the 2023 Coupon and Promo Code Use Study by Coupon Science, 91% of respondents used coupons in the past year. The study was conducted between November 6, 2022 and December 15, 2022 among 1,894 U.S. residents ages 18 and over.
To be effective, however, it can be important to plan carefully when offering coupons.
“We distribute coupons strategically to enhance customer acquisition without diluting brand value,” says Buitron. “We offer seasonal discounts and special promotions, like $49 off the first treatment for new customers. To avoid brand devaluation, we limit the frequency and duration of these offers and target them to specific customer segments.”
Outdoor gear shop Outdoorplay combines promotions with major outdoor events and holidays.
“We give exclusive discounts to our newsletter subscribers and loyalty program members so they feel special,” says Erika Pacini, the company’s head of marketing.
Custom art company Pet Portraits takes a similar approach.
“We distribute coupons with purpose and ensure they’re targeted to specific customer segments via email marketing, social media, or our VIP Facebook group,” says co-founder Olivia Tapper. “This keeps our promotions exclusive and maintains our brand’s high standards.”
Lou Haverty, owner of Skid Retailer, which carries skid steer attachments for the construction industry, has found coupons give him a good way to help customers decide to buy.
“I offer first time customers discounts when they need a final incentive,” says Haverty. “I do this by offering a one-time discount code if they abandon their cart at checkout.”
How to Create Coupons that Build Brand Value
When developing coupon strategies, it can help to have specific goals in mind.
“Beginning with clear objectives – whether the purpose is to attract new customers, boost sales during slower periods, or promote specific products – is key,” says Dan Roland, co-founder and CEO of restaurant customer service platform Katalyst.
Roland and other experts utilize the following coupon strategies.
- Their strategies target specific customer groups with personalized coupons based on customer behavior and preferences. This can enhance goodwill with their clients and make the discounts more valuable.
- Their offers align with their brand’s image.
- They offer enticing discounts such as a percentage-off, limited time offer (LTO), or exclusive access to a new product to help drive quick action.
- They offer coupons via email, social media, website, and in-store promotions to help maximize reach and engagement.
- They monitor analytics like redemption rates, buying patterns, and customer preferences and adjust as needed.
- They avoid coupon overuse to maintain exclusivity.
- They ensure their discounts don’t negatively affect the bottom line.
- Their strategies make redeeming coupons easy.
Creating a Loyalty Program
Loyalty programs can provide another way to help leverage discounts and increase repeat business. Such programs have the added benefits of improving customer retention and satisfaction, creating brand awareness, and encouraging word-of-mouth advertising.
To foster customer loyalty, Pacini notes her company relies heavily on their Outdoorplay Rewards Program.
“Members are given a 250-point sign-up bonus, while points are earned through purchases, product reviews, and social media engagement,” says Pacini. “These points can be redeemed for discounts or environmental commitments such as tree planting. This fits our brand’s eco-conscious ethos.”
When developing a loyalty program, here are some tips to consider:
- Make opt-in easy and immediate. “Loyalty is strategically built into the Katalyst platform from the first purchase,” says Roland. “As soon as a customer makes a purchase online, we auto create a profile for them and ask if they want to confirm interest in participating in the loyalty program.”
- Define clear objectives. “Set goals like increasing repeat purchases or customer retention and decide on key performance indicators (KPIs) to measure success,” says Roland.
- Choose the platform that best fits your objectives. Loyalty program options can include a points system where rewards can be redeemed, a tiered system where better rewards are offered for higher spending, and a referral program.
- Make rewards immediate. You can offer a sign-up bonus to incentivize joining.
- Offer a variety of rewards. These can include discounts and free products.
- Personalize. You can tailor rewards to customer preferences and milestones.
- Provide excellent customer service.
Designing Attractive Bundle Deals and Package Discounts
Creating bundle deals and package discounts can increase the average ticket value by helping to encourage customers to purchase more services at once, says Buitron.
“We offer a clear value proposition that highlights the significant savings, convenience, and cost-effectiveness of the bundle,” says Buitron.
When creating bundle deals and packaged discounts, Pacini suggests also combining complementary products or services.
“Many customers buy more if kayaks come with accessories such as paddles, life vests, and waterproof bags,” she says.
Cary Lawrence, CEO of customer data and analytics platform Decile, says analytics can help decide what products to bundle.
“You’ll be able to see which products are a strong complement to each other, which compete with each other, and which have no correlation at all," Lawrence says. "By bundling complementary products, you’ll increase the likelihood of your customer purchasing the products together and increasing cart value.”
The Takeaway
Discounts can be a powerful way to increase business throughout the year. If you plan carefully, you can reap the rewards of strategically targeted promotions no matter the season.
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