Why Coupon Deals Give You ROI
Everyone loves a good deal – rewards, discounts, free items, whatever it may be – it’s in our DNA. When it comes to food (especially pizza), we want these deals, because it makes the pizza just a bit tastier than it would be at full price. So, what’s the easiest (and possibly one of the oldest) ways to promote great deals to discount-seeking customers? Coupons! Whether they’re digital or traditional – they’re part of our culture, and for that reason and many others, they’re an incredibly effective marketing tool.
Why Offer Coupons?
You may think it’s not necessary to implement coupons into your marketing (maybe you believe they’re outdated – something of the past) but they’re a way to promote and introduce new customers to your pizza shop every day. Not only are they a tool you can use to bring people in and get them excited about saving money, but they’re also a great way to introduce changes to your menu. For example, offering a combo meal with a free slice of your newest cauliflower crust pizza! This allows you to easily sneak in new items on your menu, while giving people incentive to try them. They’re a good tester to, one, see how people are liking new items and two, keep customers up to date on menu changes (in a fun way). And sure, coupons can be used in many ways, but the key to maximizing them in today’s digital world is by using them to build your customer base. But how?
If you have social media accounts, try sending these out to your followers, or customers who “like” your page. It’s a great way to reel in potential buyers and build relationships, showing them that you notice and appreciate their online connection to your shop.
How to Use Coupons as a Key Strategy
The most important tactic to using coupons is testing and analyzing them to see what really works for your shop and its customers. Especially when you’re just starting to use them, review which coupons seem to be driving in the most traffic. Bringing new customers into your shop, whether they use the coupon deals they received or not, is the main desired result. They could very likely buy something that wasn’t even on the coupon (a great win for pizza shop owners). Coupons work in magical ways. If you make them shiny and appealing enough, you’ll grab the attention of many prospective customers.
However, it’s important to point out that coupons should most often be used as a long-term strategy rather than short. What do we mean by this? Sending out coupons to customers for birthdays or holidays- through mail, email, social media, or in-store shows your sincere interest in your customers while also bringing them into your shop in a fun and more personalized way. What’s so great about this long rather than short-term strategy is that coupons can be used to not only bring in reoccurring customers but also bring back customers who haven’t been in for a while. Give your customer list a check, see who hasn’t been in store for the last 60-150 days, and send them a little note and coupon to show that you’re still thinking of them and would love to see them come back in. If you’re not seeing results right off the bat, keep in mind that 90% of customers already use coupons in one way or another, and in 2021, the number of adults using coupons is expected to surge to 145 million.
Lastly, when creating your coupons, remember to add a realistic expiration date so that your customers have enough time to come in and use the coupon without feeling too rushed. There’s nothing worse than receiving a great deal that expires in 24 hours.
Understanding Coupon ROI and How It’s Calculated
Now that you have a good understanding of how to use coupons and how they may work best for your shop, it’s important to think thoroughly about what can and should be on these coupons. Giving out inexpensive items or combining dishes creates greater appeal for your customers, but how does your shop benefit? It’s important to keep your customers happy and hungry, but it’s also important to make a profit. Let’s first look at how ROI (Return On Investment) is generally calculated.
Different shops have different variables for what constitutes for cost and profit on both sides of the calculation. However, if you track
the usage of coupons, you can better understand your return on investment. How? First, it’s very beneficial to keep yourself organized when producing coupons. Asking for your customers’ information before making coupons available to them puts you in a good spot to generate your customers’ information for future deals. Make it just a bit challenging to get coupons to create some excitement. Maybe consider having certain coupons exclusive to certain channels. For instance, if they follow your Facebook page or like a certain post, they’ll be sent a coupon. This tactic can also help you track which customers are downloading these coupons, and on which channels. Finally, as we said before, use expiration dates that are realistic. Build out a time frame for yourself to help you keep track of who (and how) is coming into your shop, and to be aware of the ROI you’re getting from your coupons.
How to Set Up Your Discounts
Let’s get into the nitty gritty of how to get these discounted items up and running. The key here is to make the perceived value higher than the actual discount. An example of what not to do? Let’s say your shop’s pepperoni slice costs $2.00. This is already pretty inexpensive, which keeps people coming back. There’s no reason to put a discount on this, because it’s not perceived as high value, and won’t catch your customers’ attention on a coupon. However, if you offer bundles or a two-for-one deal with the slices, it makes the coupon much more valuable. An example of what to do? Label the coupon as “$5 off a purchase of $20 or more”. This 25% off deal not only makes the customer happy, but can cause them to spend much more than they originally expected because they’re “saving money” (aka overbuying). 77% of consumers spend $10 to $50 more than intended when redeeming coupons. Knowing your overbuy in this situation is so important to your coupon’s success. When you begin to understand the average amount of money that is being spent at your shop per visit, you can start to offer more desirable discounts while making a profit.
Keep it Up & Track Your Success
Like we said, it takes time (and a bit of energy) to test out what coupons work for your shop and why. The hope is to create a good experience for customers while gaining profit for your shop. Keep working to track trends, customer behaviors, and the success of your coupons. If you’re not sure where to even start with your tracking and analytics, ZaHub can help! We make it easy to design direct mailers, implement custom coupons, launch a campaign and track coupon success with a few clicks of the button. Sound easy? It is! Click here to start your next direct mail coupon campaign!