By MaryAnn Rivers
October 1, 2009

This holiday season will certainly be one of the most competitive in many years.  As our region strives to pull out of the recent economic tailspin, retailers and service companies will be battling for every disposable dollar, and that means discounting of all sorts to bring customers in the door.  The good news is that consumers now depend on couponing more than ever, the result of careful budget control during the long recession.  The bad news is that many businesses aren’t prepared to manage a coupon or discount campaign to their best advantage.

A buy-one-get-one (BOGO) deal or other high value discounts can make the difference between a couple’s choice to enjoy going out to a nice restaurant and a movie or to stay home and watch TV.  But couponing, when managed well, also can make a tremendous difference for businesses that find clientele shrinking or visiting less frequently in a poor economy.  They should keep three considerations in mind.

First, businesses need to ensure that the coupons or discounts they offer will help them make money, not take a loss.  A coupon for $10 off any purchase of $30 or more would be a great deal for the consumer, but it might only make financial sense to the business if bringing the customer into the shop or venue is likely to produce incremental sales.  For example, a family visiting a restaurant with a coupon also generally will buy one or several full-priced meals, often along with appetizers and drinks.  A consumer bringing in a suit to be dry cleaned and using a coupon may bring in several other items at the same time.  In these situations, coupons generate new revenue for businesses, beyond the expense of the discounted service they never would have seen if the consumer had not desired to use the coupon.

Next, businesses should be sure that the coupons or discounts they offer are relevant to their customers.  Targeting young couples who live in the bustling centers of major cities with an offer of one free meal with the purchase of another meal of equal or greater value makes sense.  It may be less sensible, however, to offer that same demographic a discount on an auto club membership, since many may not own a vehicle or may commute using public transit.

Finally, businesses should ensure that their employees are ready for a successful campaign.  Cashiers and sales staff should welcome and encourage customers to hand them coupons, rather than puzzling over them and asking management what to do with them.  Customers should feel no embarrassment or hassle when they take up a merchant’s offer. 

Discounts and coupons around the holiday season are especially valued by consumers, since people often are spending considerable amounts on gifts, food and travel during this time of year.  Expect to succeed with coupons year-around, but especially now.  Merchants have told us about some remarkable results they’ve obtained, even during the economic downturn.  One restaurant owner told us his business takes in 50 to 60 coupons a week, and 70 percent are from people who have not tried his business before.  Another said that for the past three to four years, he’s recorded $100,000 of additional gross sales annually because of accepting coupons. 

Moreover, merchants find it easy to determine the true value of couponing to their business because, at the end of the week, they can tally up exactly how many people took advantage of the discounts just by counting the coupons in the cash drawer.  They can’t do that with radio or TV, which offer results that are very difficult to measure.  Did someone come in because they heard a particular radio spot?  Or was it the TV spot that caught their attention?  Or a newspaper ad, a neighbor’s recommendation, etc.?

Businesses have everything to gain and really nothing to lose by participating in couponing in a strategic manner. Offering high value discounts can bring new customers that may never have visited the business without the coupon and turn them into repeat customers based on their experience. They should establish clear goals at the outset and then measure the results.  Participation is good for their business, good for the customer and good for the economy of local communities.  It’s a three-for-one offer no business should overlook.

MaryAnn Rivers oversees the strategic operations for Entertainment Publications’ flagship product, the Entertainment book, Entertainment.com, cookie dough and Sally Foster gift wrap and gift products.  Entertainment Publications is a privately held company, acquired in June 2008 by MH Equity Investors, a subsidiary of MHE Private Equity Fund, LLC. She may be reached at EPICommunications@Entertainment.com.