Effective Coupons and Repeat Business

About a month ago (to the day in fact) I wrote an article about saving your customers money to get them to spend more with your business.

The thinking is that if you save them money, they will have more to spend, and if they realize that they are saving money when they buy from you, they are likely to give you more business.

I talked about offering discounts in the forms of coupons, sales, and promotional giveaways. The article got some feedback, but the conversation inevitably died until this morning when I got a comment from Ken McCormick, who raised a great point that I didn’t really delve into in the article.

Ken says, "Build loyalty by giving the discounts to your returning customers…your loyal customers."

This is a great idea that can be really effective in earning repeat business, and Ken’s comment couldn’t have been timed any better, because it just happens to coincide with a real life experience that I am about to be involved with.

Last year, I had some work done on the brakes of my car, and the mechanic I went to gave me a coupon for 20% off my next service. Now, I’m having another bit of trouble with my car, and guess where I’m about to take it.

There’s a couple interesting things worth noting about the particular coupon the mechanic gave me. First of all, it has no expiration date. This signifies that the coupon is more than just for show, because he intends to give me that discount no matter what as long as I come back. It’s hard to put an expiration date on auto repair and he wants to make sure he gets my business again. That’s smart. Much smarter than if he would’ve given me a coupon that expired a month later that would have never gotten used, and hence given me no real reason to go back to his shop.

The other thing about the coupon is that while it offers me a 20% discount, it also says "up to $30". This is also smart because while it is still incentive enough for a customer to utilize it, the mechanic is not going to have to give up too large amount of profit on a bigger more expensive job. He set a limit that he is comfortable with. I would still be ecstatic to get $30 knocked off of my bill (because we all know auto repair isn’t cheap), and he is happy to have earned my business without giving up an arm and a leg.

I think this is an interesting case study about effective coupons and how they can build customer loyalty, which in the end should be one of your highest priorities.

Have you seen an increase in customer loyalty based upon coupons you have offered?