How to Tailor Your Coupon Campaign on Social Media
You have many ways to refine and tailor your coupon campaign on social media sites, within limits. You do want customers, but you don’t want to lose your shirt, either. To limit your discount-exposure, you may be able to tweak the coupon vendor’s share of revenue, the time frame during which the offer will be honored, the numbers of deals, and more.
Read the fine print before you sign with a coupon service.
The depth of the discount
Typically, the buyer receives 30–50 percent (or more) off the standard price. Then, the coupon service gets its slice: sometimes as high as an additional half of how much the buyer pays. So, as the merchant, you receive only 25 percent of your list price.
The scope of the deal
Consider how you will establish the parameters of an offer to best meet your goals and objectives:
Min meets max: Be sure to set the minimum number of sales high enough to mitigate your risk (bring in adequate volume), but the maximum number of sales low enough to keep from going broke (reduce your cost exposure).
If the minimum number of deals is sold, the coupon company takes its cut off the revenue first. The coupon firm collects payments from customers by credit card and sends you a check for your share afterward. The schedule of payments varies by coupon company.
Watch the schedule of payments carefully. Delayed payments from the coupon service can create a totally unnecessary cash flow crisis for your company.
Max meets max: Set a maximum number of deals to limit both your financial and service exposure. A cap makes sense. For example, your small theater company may have a fixed number of seats, you may have room for only a certain number of people in a dance class.
How long: You specify the time frame over which buyers can exercise a deal, usually several months to a year. Plan ahead, keeping in mind how much product, space, and staff you’ll need to fulfill your end of the deal.
Timing is everything: Schedule the term of your offer so you don’t have buyers showing up on your doorstep all at one time. Most merchants see a peak in redemptions the first 30 days after an offer and the last 30 days before expiration.
How to grapple with the gotchas
Watch for landmines like these before signing up for a deal:
Fashionably late? The fine print on some deals allows buyers to receive a discount equal to the amount paid for the coupon — even if the deal has expired. Suppose someone paid $6 for coffee costing $12 on a deal that expired on 12/31/11. If they come into your store a year later, you may have to give them $6 off of coffee, whose price has now increased to $15.
Special package deals. Many companies create a unique package or service just for their deal offer. You are usually not required to continue to offer that product or service beyond the term of the deal.
Bookkeeping nightmares. These deals can leave you with a record-keeping headache from tracking outstanding and redeemed offers at the register to holding potential entries on your books. Talk to your accountant about the impact on your financial statements.
Where’s my money? Payment isn’t swift, either. Some coupon services divide your payments into three installments paid over 60 days, which could create cash flow problems if large numbers of buyers redeem their coupons quickly.
Be prepared. If you can’t provide high-quality service to meet the demand with the staff or space you have, you may lose not only the customer but also your reputation, if poor reviews appear online.
How to measure success
Good coupon sites offer detailed analytics stating the number of offers e-mailed, number and percent of offers opened, number and percent of viewers who clicked for details, and the number and percent of viewers who purchased the deal. Additionally, they can provide how many viewers purchased more than one deal, total number of deals sold, and total dollar value received. Copy this information to a spreadsheet to:
Assess whether the offer was financially successful for your business
Obtain clues about what factors might have affected an offer that didn’t succeed in meeting the minimum number of sales
Compare the success and parameters of offers that you have sent out through the same company to see which offers are the most successful
Compare what happens with the same offer distributed through different companies
If you can’t figure out how to do this, ask your bookkeeper or accountant. They eat numbers for lunch.
Further leverages for your deal
Many companies offer extra options to their coupon buyers in the hope that deals will go viral:
Opportunities to share opinions and photos: Coupon buyers on Zozi or Yelp, for example, have the opportunity to enter comments about a company offering a deal. Other sites encourage participation in a social activity. These actions are often perceived as testimonials by other prospective buyers and encourage them to purchase coupons. Almost all have share buttons to facilitate users sharing deals with others.
Easy-to-share links to send deals to friends: If three or more friends share a deal, the referrer receives a freebie. Include this element as an allowance in your revenue calculations. If someone organizes a share campaign, total revenues may decline.
This share-this-deal functionality encourages people who receive a daily coupon e-mail, or people who visit your site, to tell their friends about the deal on Facebook and Twitter and by e-mail.
Affiliate options: Recommending a deal to others or signing up to promote offers on a commission basis usually generates internal deal bucks (not cash).
Easy integration with Facebook, Twitter, and e-mail to share deals: Most services offer mobile apps for iPhone, iPad, Droid, and BlackBerry.