Coupon Advertising & Ways to Make It Work for You

WRITTEN BY: Kelly Main for fitsmalbusiness.com. Original publication

As antiquated as coupon advertising may sound, coupons are still highly effective. Coupons present businesses with a huge marketing opportunity, which is why about 50% of all businesses use coupon advertising. And if you’re not using this (surprisingly modern) marketing method, you’re missing out. In fact, you’re missing as much as 46% more sales at checkout, brand loyalty, higher email open rates, and even more social media followers.

That’s right—over 70% of consumers follow a brand in order to receive coupons.

So whether you’re looking to attract new customers, leverage the power of social, decrease abandoned cart rate, increase email marketing campaign performance, or simply increase overall sales, coupon advertising might be your ticket to achieving any (and all) of these marketing goals.

Pros	Cons
Low-cost form of advertising	Customers may associate your product or service’s value with its sales price
Attract new customers and subscribers	If your only selling point is the lowest price, then you’re unlikely to generate long-term sales
Reduce abandoned cart rates
Build brand loyalty and incentivize repeat purchases
Can be used to acquire capital (e.g., with Groupon)

Is Coupon Advertising Right for Your Small Business?

Coupon advertising isn’t just a way to attract the price-driven deal hunters. In fact, chances are you don’t want to use coupon advertising for the sole purpose of acquiring one-off sales, unless you’re simply looking to move a lot of product. For most, the aim is to use coupons for brand discovery or to serve as reminder advertising to generate repeat sales from former customers. In short, coupons can be a small price to pay for building long-term, repeat customers.

Here are some of the common reasons businesses use coupon advertising:

To build brand discovery
To increase impulsive purchases
To stay top-of-mind (reminder advertising)
To generate loyalty
To incentivize an action, such a review

Of course, you can use coupon ads for a number of other purposes. For example, using an exit-intent pop-up coupon can decrease abandoned carts and increase conversions 5 to 10% on average. Or, a business trying to increase email campaign open rates might use coupons to incentivize contacts to open the email. That’s right—email campaigns with coupons see a 14% increase in open rate, as well as a 48% increase in revenue per email sent.

Coupon Advertising Costs

Coupon advertising can cost as little as $0 to several thousand dollars. How much it will cost your business will come down to factors such as coupon design cost and distribution costs. In addition to these expenses, you also have to add the cost of the discount itself, as well as consider the potential revenue you’ll gain from acquiring new customers or increasing brand loyalty from returning customers.

Here are the three main costs involved with coupon advertising:

Coupon design costs: From $0 to $350 and higher
Distribution costs: From $0 to thousands of dollars
Cost of promotion: Varies by business (sales, profit margin, customer lifetime value)

Think about whether your business can afford to offer discounts, not only in term of profit, but in terms of consumer behavior. In other words, if you’re using coupons to acquire new customers, will they remain loyal and continue to be a customer after the sale ends, or will they be on to the next lowest-priced option? Or, are you conditioning your customers to value your products or service at the lower rate, so that when you increase to the standard price, they think it’s overpriced?

Coupon Advertising Distribution

How you distribute your coupon will depend largely on the type of business you run, your audience, and your advertising objective. Whether you’re looking to connect with your existing customer base or reach new customers, are an online business or brick-and-mortar, you have a number of options when it comes to distributing your coupon:

Your website: Coupons are commonly deployed as a pop-up box on ecommerce websites. Reason being, it helps convert browsers into buyers by giving site visitors a reason to make the purchase immediately in order to receive that limited-time offer. Businesses see a lot of success with this strategy—some report as much as a 2X sales conversion rate from using exit-intent pop-up coupons on their website.
Coupon platforms: If you’re looking to build brand visibility, consider using a site such as Groupon or LivingSocial. People are visiting these platforms—over 34 million active users on Groupon alone—to find deals from businesses and brands they’ve never heard of. What’s more, this includes local businesses, such as a restaurant or hair salon, giving brick-and-mortars a way to leverage coupons online to attract new customers.
Email campaigns: If your business has an established contact list and is looking to use a coupon to generate sales from existing customers, then using email marketing might be a good option to distribute your coupon. In fact, a study found that 75% of consumers actually search for coupons in their inbox. If you go this route, make your life easy and use one of the best email marketing platforms to automate and track performance.
Social networks: Have an active following on social? Connect with your audience with your Facebook Business Page, Facebook Groups, Twitter, Instagram, or any other social platform you use and share your coupon with friends and followers. Social is a great way to share special promotional offers that aren’t available elsewhere as an incentive to follow your business, so keep that in mind when distributing coupons via social media.
Newspaper: Print coupons have been widely used since Coca Cola issued the first coupon in 1887 and, yes, newspapers are still used to distribute coupon ads today. Newspapers can provide local businesses with a great way of reaching customers in their area. Learn more about newspaper advertising and what costs are involved.
Mail: Snail mail is another classic way to share coupons. For example, postcards are a great medium to deliver coupon ads that are cost-effective and eye-catching. Get instant pricing for your postcard specs by visiting VistaPrint, or for more information, check out the best direct mail services.
In-person: Of course, every business with a physical location—or selling products in one—should also consider distributing their coupon in-person. This too can be done in a number of ways, depending on your business, but can include anything from coupons on receipts to coupons on product packaging (e.g., the $1 off sticker or tag on grocery store products).

As with any form of advertising, you want to choose the distribution channel that best aligns with your target audience and your advertising goal or objective. It may also be worth considering whether to use more than one channel of distribution for more ad exposure. For example, if you’re promoting your ad to serve as reminder advertising to an existing customer base, promote your coupon to your social followers as well as via email.

Components of Great Coupon Advertising

Coupon ad example

Not only do you need to have a marketing goal in place and the right platform to distribute your coupon ad to your target audience, but your coupon itself also involves some key components. For example, it needs to be eye-catching to draw people in, and it needs a clear message, with an enticing offer that is easy to acquire. Additionally, consider factors such as timing, scarcity, and exclusivity when designing your coupon advertising campaign.

Here are a few things to consider when designing a coupon ad for success:

Eye-catching design: Coupons depend on people seeing them, and in a noisy world flooded with adverts and stimuli coming from every direction, you need to create an eye-catching and visually appealing coupon. In many cases, it’s worth it to hire a graphic designer to ensure your coupon does just this. If you’re on a budget, try Fiverr.
Clear message: On top of looking good, it also needs to sound good. It’s key to have one clear marketing message. In short, people need to be able to quickly understand what your coupon is offering at a glance.
Call to action: OK, you’ve reeled your audience in and now it’s time to seal the deal. Include a call to action (CTA) to get people to take the next step, be that a live link to the product you’re promoting for a digital coupon, or a coupon code, or directions to show the ad to a cashier the next time they visit your business.
Timing: Running relevant holiday promotions is a good business move, just like what Payless did with their Easter coupon. People love a good holiday sale, no matter when it is. Keep an eye on upcoming events and create a coupon code to send out during those celebrations. Take advantage of the opportunities to run holiday promotions that your customers will look forward to year after year.
Scarcity: In order to incite action, coupons are meant to be a short-term offer, otherwise they would just be a pricing strategy, not a form of advertising. There are two main ways to implement scarcity: either by offering the coupon for a limited time, or offering a certain number of coupons.
Exclusivity: In addition to scarcity, exclusivity is another common component in coupon advertising. For example, a business may offer special coupons to its followers or loyalty program members in order to incentivize more followers or members.

When designing your coupon, try to put your target audience first. Think about which coupon distribution method (e.g., email, Groupon, website pop-up, social network, and so on) will best reach them, how your coupon can stand out within said distribution channel, what would be compelling to them, and what would get them to take advantage of your offer. For more insight, check out these coupon advertising ideas.

Ways to Design a Coupon

Now that you know what elements are needed to create an effective coupon, the next step is to design one. Depending on your experience and resources, you will ultimately choose to design the coupon in-house or outsource to the pros. If you or your team has design experience, then of course designing your own coupon will be the obvious choice. If not, or if you’re not overly confident in your own design abilities, hire a freelancer or use a design platform.

Here are the most popular ways to create a coupon:

Design your own: Even if you’re not a Photoshop expert, if you have an eye for design and some experience, you can easily design your own coupon using tools like Canva.
Hire a freelancer: If you don’t have the time to make your own coupon, but you’re on a tight budget, hire an ultra-affordable graphic designer for your project using a site like Fiverr.
Hire a pro designer: For a more professional design, you can use sites specifically dedicated to offering graphic design expertise, where you can submit your design request and receive dozens of design submissions from experts. To get the best designs for a flat fee, choose 99designs or DesignBro.

Before you design your coupon, start with ironing out the strategy behind it. What are you ultimately looking to achieve with it? What’s the best way to reach your target audience? And what marketing message and offer will best speak to your target audience? With these in mind, you can develop a strategic coupon design that does more than look good, but effectively reaches your goals.

Frequently Asked Questions (FAQs)

Is Groupon good for marketing?

Groupon can be a good marketing channel for businesses. However, it’s not just used to promote a product or service, to build brand visibility, or to land sales. What it’s actually great for is generating capital. For this reason, it’s commonly used by businesses in need of a sum of money (say a restaurant in need of a new grill) looking for alternative financing options.

How do I create a coupon on my Facebook Business Page?

Facebook Business Pages have a ton of features and capabilities, one of which is to create a coupon or discount that can be shared with your followers. To do this, log in to Facebook and navigate to Ads manager. Then, begin the process of creating a new ad, and when you find the section labeled “Offer,” switch the toggle button to on. Follow the steps from Facebook, or if you don’t yet have a business page, start with learning how to create a Facebook Business Page.

Which is better: coupons or discount codes?

Coupons and discount codes are more or less the same thing. The difference is that traditionally coupons have been distributed via print (e.g., newspapers and magazines), whereas the term discount code came about as a way to identify an online offer. However, in a digital world, online coupons do exist, and with the power of technology, in-person discount codes also exist.

Bottom Line

Of course, there’s a big difference between businesses that do coupon advertising well and those who do it poorly. And the level of success your coupon ad campaign sees will depend on the quality of your campaign and the strategy behind it. What’s great about it is that just about any type of business can use coupons to their advantage. However, if you’re not quite sure how to do this, consider finding a marketing pro to do it for you, such as on Fiverr or Upwork.

Coupon Advertising & Ways to Make It Work for You | Fit Small Business