Advertising
Advertising

4 Common Mistakes to Avoid While Offering Coupon Codes

4 Common Mistakes to Avoid While Offering Coupon Codes

The coupon codes are an excellent tool for the business, and that is why almost every company is using them. Promo codes for shopping help in bringing new customers and make them loyal. But it is important to use these coupons carefully because if you use this tool, incorrectly it can cost you a lot. It can set back your business, and you could lose some serious money. That is why is essential that you consider the advantages and disadvantages of these coupons before you using them.

Some mistakes are pretty standard. It is important to avoid then if you want to benefit from these coupons. Here are some of the common mistakes that you should avoid at all costs while creating the coupon codes.

Advertising

1. Unable to Comprehend the Cost of Customer Acquisition

Customer acquisition is a concept that is pretty fundamental. It is also the principle that drives the campaigns for coupons. It is the cost of the amount of money that you will require to spend to gain the customers. It is important that you think carefully about the CAC that is suitable for the business. The finances of the company are an important deciding factor in determining the CAC. You should be careful and avoid setting the price that is too high because it will harm the financial condition of the company. If the price is too high, then it is like paying too much for advertisement. It is important to crunch the numbers carefully. You should also understand what are going to gain and what you may lose. Know the price of offering coupons before you make the offer.

2. Offering A Steep Discount

Before providing a discount, it is essential that you do careful calculations. Always provide a percentage of premium that is going to work out well for the finances of the company. You should take your time and analyse the financial condition of the firm before deciding on a discount. If you set a large cut, it will help in bringing a lot of customers even the ones who do not usually shop at your place. But a significant discount can end up putting strain unnecessary strain on the logistics and shipping. It will also put extra pressure on the sales team and it will affect their performance. To make sure that the work of the team stays efficient and the finances of the firm are not strained you need to set the discount percentage carefully.

Advertising

3. Offering Unlimited Discount

If you are looking forward to offering discounts that are store-wide, then it is important that you offer it to a limited number of users. If you do not take this precaution, then the shoppers can end up taking too much advantage of the sale and buy more products than you have anticipated. If it happens then it can result in high sales but small revenue which is not good for the business at all.

Giving too much discount will also result in emptying your inventory. If this happens, it will set back the firm. If you are designing the coupon campaign to get rid of older stock, then it is possible that unlimited discount will lead you to order more of the old stock. It will not be beneficial for your business. It will just end up costing you more money than you initially estimated.

Advertising

4. Not Offering a Good Enough Discount

Most of the time the mistake is made by providing too much to gain customers, but it is possible that you are guilty of not providing enough. You may lose clientele because you fail to provide the best deals. You do not lose much if your coupon deal is not the best one out there, but it can cause your customers to switch to other places with better deals so it is better to come up with good deals. You can experiment with different deals and determine which one is best for you. It may take some time but in the end, it will be worth all the effort as it will increase the sales and bring in more profit.

By keeping these common mistakes in mind while planning coupon deals and discounts, you can come up with the best offers.

Advertising

More by this author

6 Reasons Why French Press Makes the Best Coffee 9 Things To Remember If You Love Someone Who Doesn’t Easily Show Affection 12 Ways To Earn More Money While You Have A Full-Time Job 7 Steps to Reduce Your Laptop’s Fan Noise & Increase Speed 7 Ideas To Decorate Your Home Using LED Strip Lights

Trending in Money

1 How to Use Credit Cards While Staying Out of Debt 2 How to Use Debt Snowball to Get out from a Financial Avalanche 3 How Personal Finance Software Helps You Get More Out of Your Money 4 The Best Ways to Save Money Even Impulsive Spenders Can Get Behind 5 How to Answer the Tough Question: What are Your Salary Requirements?

Read Next

Advertising
Advertising
Advertising

Last Updated on March 4, 2019

How to Use Credit Cards While Staying Out of Debt

How to Use Credit Cards While Staying Out of Debt

Many people will suggest that the best thing to do with your credit cards during these tough economic times is to cut them up with a pair of scissors. Indeed, if you are already in huge debt, you probably should stop using them and begin a payback strategy immediately. However, if you are not currently in trouble with your credit cards, there are wise ways to use them.

I happen to really love my credit cards so I will share with you my approach to how I use mine without getting into deep financial trouble.

Ever since about 1983 when I got my first Visa card, I continue to charge as many of my purchases as possible on credit. Everything from gas, groceries and monthly payments for services like my cable and home security monitoring are charged on credit. Despite my heavy usage, I have maintained the joy of never paying any interest fees at all on any of my credit cards.

Advertising

Here are some tips on how best to use your credit cards without falling into the trap of paying those nasty double-digit interest fees.

Do Not Treat Credit Cards as Your Funding Sources

Too many people treat their credit cards as funding sources for major purchases. Do not do this if you want to stay out of trouble. I use my credit cards as convenient financial instruments so I do not have to carry around much cash. In fact, I hate carrying cash, especially coins. When you buy things on credit, the purchases are clean and you will not get annoying coins back as change.

I do not rely on my Visa, MasterCard or American Express to fund any of my purchases, large or small. This brings me to my golden rule when it comes to whether I will pull out any of my credit cards either at a retail or online store.

Advertising

I never purchase anything with my credit cards if I do not have the actual cash on hand in my bank account.

If I really cannot pay for the item or service with cash that I already have at the bank, then I simply will not make the purchase. Remember, my credit cards are not used as funding sources. They are just convenient alternatives to actual cash in my pocket.

Make Sure to Always Pay Off Balances in Full Each Month

The next very important part of my overall strategy is to make absolutely sure that I pay the balances in full each and every month no matter how large they are. This should never be a problem if the cash has been budgeted for my purchases and secured in the bank. I have always paid my full balances each month ever since my very first credit card and this is why I never pay interest charges.

Advertising

Using Credit Cards with Rewards

Most of my credit cards are of the “no annual fees” type, including one MasterCard on a separate account I keep at home as a spare in case I lose my wallet or incur any fraudulent charges. However, I do use a main Visa card which does have an annual fee because all purchases on that card reward me with airline frequent flyer points. For me, the annual fee is worth it since I do travel and I get enough points to redeem many free flights.

You have to decide for yourself if you will charge enough purchases on credit each year without paying interest charges to warrant a credit card that rewards you with airline points (or other rewards). In my case, the answer is “yes” but that might not be the case for you.

I occasionally use a MasterCard or American Express card on small purchases just to keep those accounts active. Also, I have been to the odd retailer that accepted only a certain type of credit card, so I find that having one from each major company is quite handy. Aside from my main Visa card which earns the airline points, the rest of my cards are of the “no annual fees” variety.

Advertising

So this is how I use my credit cards without getting into any financial trouble with them. This strategy is recommended only if you are not in debt, of course. In fact, it is worth keeping in mind once you’re out of debt so that you can keep your credit cards active and treat them responsibly.

What are your credit card usage strategies? Let me know in the comments — I’d love to hear what methods you use.

Featured photo credit: Artem Bali via unsplash.com

Read Next