Coupons don’t work … even if Groupon delivers them for you

Discount coupons attract current customers (who now pay less) and price shoppers/switchers. Whether they are FSIs or Groupons they still produce the same result: the coupon distributor makes money, the retailer or product/service provider of the discount, hoping to induce trial to create a new customer, is disappointed. But, they do get a blip in sales, which must look good on those new-fangled marketing accountability reports.

According to a recent article in the New York Times, “Coupon sites are fizzling out.” They note that while daily deals were all the rage, it is now so yesterday. Once more retailers and product suppliers are re-learning that discount coupons do not attract the right new customers for your business. Even if they were attracted using Web 2.0 (or 3.0 or whatever).

The Internet coupon sites are even a worse deal for the merchant. Offering a 50% discount and then keeping 50% of that, so the merchant gets 25% of normal revenue on the sale. But it is less expensive than other marketing methods to attract new customers. That would be true if it actually attracted new customers. But read some studies on who uses coupons and you’ll see why that is a pipe dream.

If it seems too good to be true…

Mitch

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