Discounts attract new customers, introduce new products, and generate revenue. Coupons and promotional codes offer discounted prices to customers whether they purchase at a pharmacy, retail, or any other type of business. Almost 90% of consumers use coupons, and some even collect them to save more money. There are physical and digital coupons and codes that can be introduced in stores or through websites and social media promotions.

It’s important to have a good marketing strategy as coupons can lead to lower profits per sale and cannibalize existing revenue. So, look at a few pros and cons of using coupons and find out whether they’re a good strategy for your business.

Pros of using coupons

New customers

One of the biggest pros of using coupons is to attract more customers to your store or website. You can also introduce new products and boost your profit margin. Some businesses use coupons to create loyalty with existing customers to ensure they continue to purchase from their stores. Offering customers to find the lowest discounted prices for expensive products such as medicine, is essential.   

Even if you have insurance, prescription prices can vary among pharmacies. That’s why many existing and new customers decide on using coupons, so they can purchase their medicine at a reasonable price. Many online services help them compare prices at pharmacies across the country and offer great discounts.

Make room for new products and increase brand awareness

One of the simplest reasons for lowering prices on products is to sell them faster. Incorporating coupons will help you get rid of unwanted and excess inventory and make room for newer products. Although incorporating coupons usually solves the problem easily, keep in mind that some items may be difficult to sell.

Businesses have to constantly work on their brand image by providing customers with great offers. This will encourage customers to talk about it with their acquaintances, thus increasing profit. Don’t forget to meet your customers’ expectations by supplying them with good opportunities that they wouldn’t want to miss.

Cons of using coupons

Reduced profits

Offering coupons on certain products can result in reduced profits, and it may cost you more money. You should calculate whether the discount makes a difference in your profit margin. You can do this by bringing back old customers who may have chased other coupons elsewhere or introducing new customers to your store.

Remember, there are always some customers that purchase certain products even without a coupon. If you want to control the outcome and make a balance, you should decide which products need discounts and whether they’ll help your business grow or not. Finding the right coupon strategy is crucial.

Affect the value of your products in a negative way

Some people think that expensive products are better in every sense. By giving coupons you may signal that your product doesn’t have good quality, which may negatively affect your revenue. Emphasizing the quality of your products at all times, and giving out coupons may provide a counter effect among your customers.

Also, repetitive discounts can cause negative expectations from consumers. For example, they might think your regular prices are a rip-off, or that your store is only worth shopping from when there’s a promotional coupon. This might mean they’ll refuse to buy when you’re selling at normal prices, and only wait for the next discount.

Consider a marketing strategy

Building your social media marketing strategy is another way to maximize the advantage of using coupons. By requiring customers to leave their name and email address to get a coupon, you’re building an email marketing base. This will develop a long-term marketing strategy that can be used to encourage consumers to purchase new products.

Consider creating different coupon codes for different campaigns, which will allow you to follow their progress. Use certain tools to make it easier for your visitors to subscribe to your website, so they can get new offers and coupons. Also, make sure your customers can redeem their couponing in the store or online. Don’t forget that one of the best ways to promote and distribute coupons is through social media platforms such as Instagram, Facebook, etc.

In closing

Customers enjoy promotional codes and coupons, and if you want your business to progress you must incorporate them. It allows you to create a new customer base and encourages your existing ones to purchase more items and recommend your store to their close family and friends. When a coupon drives traffic to your store, those customers may also purchase non-discounted products. Just make sure you use an appropriate marketing strategy for your business.