Coupons, Coupons, Coupons
By Dave Balch, Sat Dec 10th

Coupons can be a great way to promote, increase, and improveyour business. They can be used to entice new customers, movehard-to-sell merchandise, "time-shift" your customers by gettingthem to come in during traditionally slow times, or as astand-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. Whatrestrictions do you want to impose? Good on certain days?Certain hours? Is there a minimum purchase required? What about'rain-checks' if the promoted merchandise is temporarilyunavailable?

What about the structure of the offer? Buy-one-get-one-free?Percentage discount, flat dollar-amount discount, or specialone-time only price? Should the 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 you wantto increase sales, get new customers, introduce a new product orservice, use the as a product in and of itself (as in"gift certificate"), or ??? It is imperative that you make thisdetermination first because all of the other coupon-relateddecisions depend on it.

When you finally do come up with the parameters of your offer,be sure that it is reasonable and easy to take advantage of. Iremember seeing a restaurant for $2 off the bill, butthere were so many restrictions that I almost laughed out loud.You practically had to be an attorney to decipher the offer; itwas good during certain hours on certain days of the week, forparties of 4 or more (adults only, kids don't count),

meals mustmeet certain minimums, and so on. It was ludicrous. Theyapparently wanted to stimulate business, but I can't imaginethat ANYone 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 that youhave not yet delivered; to allow that to expire is unethical inmy opinion, unless you return the money to the purchaser afterthe expiration date.

Accounting for them, however, can be a problem. A friend of minereceived landscaping gift certificates for several years. Sheaccumulated them until she had a big project to do, and thenursery that issued them was mortified that they were going tohave to honor them all at once. If you think about it, though,they got a better deal because they had use of the money for allof that time, and the buying power of the money they receivedhas diminished over time; a $100 certificate, for example,issued 5 years ago won't buy as much today as it would havethen. Gift certificates should be carried on your books as aliability. That way, you don't realize the revenue or take theprofit until the certificates are redeemed.

Some people have the feeling that gift certificates are too muchtrouble because of the liability and accounting, but my feelingis that you should do what's best for your customer, not what'sbest for you.

Coupons and gift certificates are good tools. Use them, but besmart about it.

About the author:"Make More Money and Have More Fun" with your small business!Dave will show you how with his FREE newsletter, or his FREE'Min-E-Seminar': "Secrets of an Actual $5 Million HomeBusiness." Comments and/or questions are always welcome at1-800-366-2347 or Dave@DaveBalch.com. (c) Copyright 2002, DaveBalch.