Coupons, Coupons, Coupons

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Coupons, Coupons, Coupons Powered By Docstoc
					                             Coupons can be a great way to promote,
increase, and improveyour business. They can be used to entice new
customers,move hard-to-sell merchandise, "time-shift" your customersby
getting them to come in during traditionally slow times,or as a stand-
alone product when sold as gift certificates.And, what could be simpler?
Print a piece of paper and it'sdone. Right?Maybe.Coupons can get much
more complicated than you might think.What restrictions do you want to
impose? Good on certaindays? Certain hours? Is there a minimum purchase
required?What about 'rain-checks' if the promoted merchandise
istemporarily unavailable?What about the structure of the offer?Buy-one-
get-one-free? Percentage discount, flatdollar-amount discount, or special
one-time only price?Should the coupon expire?Lots of questions, but how
should you go about making all ofthese decisions?Start at the beginning:
before you do anything else, decideexactly what you want to accomplish
with your offer. Do youwant to increase sales, get new customers,
introduce a newproduct or service, use the coupon as a product in and
ofitself (as in "gift certificate"), or ??? It is imperativethat you make
this determination first because all of theother coupon-related decisions
depend on it.When you finally do come up with the parameters of
youroffer, be sure that it is reasonable and easy to takeadvantage of. I
remember seeing a restaurant coupon for $2off the bill, but there were so
many restrictions that Ialmost laughed out loud. You practically had to
be anattorney to decipher the offer; it was good during certainhours on
certain days of the week, for parties of 4 or more(adults only, kids
don't count), meals must meet certainminimums, and so on. It was
ludicrous. They apparentlywanted to stimulate business, but I can't
imagine thatANYone EVER took advantage of the offer. (It may
besignificant to note that the restaurant in question failed.)If you are
selling gift certificates, they cannot expire.Someone has given you money
for a product or service thatyou have not yet delivered; to allow that to
expire isunethical in my opinion, unless you return the money to
thepurchaser after the expiration date.Accounting for them, however, can
be a problem. A friend ofmine received landscaping gift certificates for
severalyears. She accumulated them until she had a big project todo, and
the nursery that issued them was mortified that theywere going to have to
honor them all at once. If you thinkabout it, though, they got a better
deal because they haduse of the money for all of that time, and the
buying powerof the money they received has diminished over time; a
$100certificate, for example, issued 5 years ago won't buy asmuch today
as it would have then. Gift certificates shouldbe carried on your books
as a liability. That way, youdon't realize the revenue or take the profit
until thecertificates are redeemed.Some people have the feeling that gift
certificates are toomuch trouble because of the liability and accounting,
but myfeeling is that you should do what's best for your customer,not
what's best for you.Coupons and gift certificates are good tools. Use
them, butbe smart about it.

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