Coupon Marketing – The Pros and Cons
Coupon marketing (Groupon, Scoopon, Cudo, etc.) has become a MASSIVE growth industry in the last few years, both here in Australia and in the USA, etc.
I’m fairly sure my girlfriend keeps them in business here, because she’s always buying stuff from coupon offers 
However, in speaking to businesses that trial this form of advertising, I hear some very “interesting” comments about its effectiveness, AND, as a customer of businesses using coupon marketing, I have some feedback that might be of value to businesses considering promoting their firm this way
Firstly, from the customer point of view, I am consistently surprised at how poor an experience you seem to get with coupon offers. In my case, we often purchase restaurant coupons, which both save us money and also allow us to try new restaurants we might not normally be willing to try due to the costs & unknown quality.
In fact, last night we went to Hippo Creek – a South African cuisine restaurant, which supposedly offers awesome steaks. Now, I’m a steak lover from way back, and had heard that this place was great, so when my partner brought a coupon ($150 value for $49), I was very keen to try them out. Long version short, a big disappointment. Great location, good service, but very uninspired food. I’ve had better steaks out of a $12/kg cryo pack from our local supermarket (and this was a Angus Beef 500gm Rump with +2 marbling). My partner’s ribs were dry and also disappointing. Plus, cold soggy chips!
From my point of view, if the business owner actually went to the trouble of getting us in the door at a massive discount like this, he should have ensured his staff went all-out to wow us with the food, so that we loved it enough to start coming back. After all, generating repeat business SHOULD be a MAJOR focus when using coupon marketing. It helps pay for the big discounts, and generates word-of-mouth, which is the ideal end result.
Instead, it was such a disappointment, I have written about it on Facebook, EatingWA & now here on my own site’s blog – all of which have the potential to reduce the number of clients they get.
Note: Business owners NEED to get to grips with the power of the internet and how it effects their business both directly & indirectly. Enough bad reviews online could kill a business and it’s exceedingly difficult to stop this happening if your business doesn’t please customers.
One Response to “Coupon Marketing – The Pros and Cons”
John Counsel on February 10, 2012
G’day Eran
We’ve heard the same kinds of stories from customers and local small businesses alike about the big group buying sites. They can be handy for customer acquisition — but the discounts are too high, the offer periods too long and the cost per customer acquired often close to ruining the business altogether.
But the concept is still a good one — IF it’s geared to the needs of local businesses and IF they can control all factors. And IF it can be kept within their local prime market areas! (My wife often complains about having to drive halfway across Melbourne just to redeem a coupon — and local businesses tell me regularly that it’s a waste of time and money promoting offers to people who are unlikely to become regular customers because of distance: they’re “oncers” simply because the business has been forced to discount prices by 70%-90%, and people from other areas come for the once-only deal.
We’ve created a solution (fully-integrated, affordable, local and controlled by local business owners) that still has the kind of reach that the BIG guys can offer: the SpendSmarter Canny Buyers Network.
Give me a call if you’d like to know more — we’ll be launching in Perth by mid-2012.