Creating Holiday Coupons

Coupons may seem like a thing of the past—who sits down on Sunday to do their weekly clipping anymore, anyway?

Well, as with everything in business, coupons have evolved.

Now people are using online coupon codes or even going into the store with short discount codes that the cashier uses to deduct from the total at check out.

Not only are coupons still valuable to and used regularly by consumers, but they can also increase revenue for retailers by up to 40 percent, according to a 2016 CouponBox survey.  CouponBox also found that the surveyed retailers earned $29,435 per month on coupon sales alone.

[bctt tweet=”Coupons can increase revenue for retailers by up to 40%. #ecommerce” username=”hostgator”]

The holidays are the best time for your business to take advantage of this opportunity, when everyone is looking for a deal to save on the next present on their list.

However, not all coupons are created equal. Just because you offer a discount of some sort, doesn’t mean that you’ll automatically drive sales.

Here’s what you need to know to create epic coupons that drive the sales you need this holiday season.

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Do the Math

Before deciding on any coupon discount, you have to stop and do the math. You risk losing more money than is necessary if you don’t plan your discounts thoughtfully. The first step is to determine the regular profit margin of the product that you’re discounting. A simple equation for that is:

(Retail price – Cost) / Retail price = profit margin

This profit margin number is your baseline. Because coupons naturally cut into profits, you want to make sure you aren’t selling items for too low a cost that splits your profits in half, or worse.

Figure out how many more of the item you need to sell to break even, and put a plan in place to ensure that happens.

[bctt tweet=”Discover your profit margin. The formula is simple: (Retail Price – Cost) / Retail Price” username=”hostgator”]


Don’t Undervalue Your Business

When you want to get the most out of your coupons, it’s easy to jump in with the biggest discount, but this can backfire quickly. Once a discount has been given, customers expect it every single time, which of course will not be the case.

Instead of offering one large coupon, segment your current and potential customers and offer them a smaller, more exclusive discount: “20% off for returning customers” or “$50 off for new customers.” Continue varying the discount and audience you offer it to so you don’t train your customers to expect to pay little for your high-quality products every time.

These lower-discounted coupons can be just as valuable if you create a sense of urgency as well. While that customer may not have planned to shop with you that day, a good deal is a good deal, and they may go out of their way to take advantage before it’s over.

In fact, 83 percent of shoppers admitted to making a purchase that wasn’t planned because of a promotion, according to Market Track. This tactic puts you in the driver’s seat, not your customers, while still encouraging sales and avoiding the danger of undervaluing your business.

[bctt tweet=”Create urgency with your coupons. 83% of shoppers made an unplanned purchase due to a promo.” username=”hostgator”]


Offer a Variety of Coupons

The holiday season is a long and busy one, so instead of offering one deep discount, spread your coupons out throughout the month of December. You can even do something fun like, “12 Days of Discounts” to help people remember. The benefit of this is two-fold:

  • By spreading your discounts out, you increase the chances that someone will be able to use one (or more) of them. Great promotion or not: the holidays are busy and a packed schedule can stop even the savviest shopper from taking advantage of a great deal.
  • This tactic gives you a chance to encourage another purchase. A whopping 96 percent of shoppers use coupons, according to RetailMeNot. If they have a great experience the first time, and you can put another great coupon in front of them, they’re like to come back and shop with you again.

Ultimately, however, the key to making the most of your coupons is distribution—if your customers don’t see them, they won’t use them.

[bctt tweet=”Offer coupons multiple times throughout the holidays so your shoppers don’t miss out.” username=”hostgator”]


Distribute, Distribute, Distribute

You have a mailing list, you’re on social media—these are two of the best ways to get coupons in front of current and potential customers. But, before emailing or sharing your coupons, always segment your distribution.

More than 80 percent of customers want to receive promotional opportunities that are tailored to their needs, according to Precima. The best way to ensure this happens is to segment your audience, whether you’re emailing or promoting on social media.

Most email clients make this easy to do, with customizable segmenting options. For example, you may want to separate your email list by past purchases, geographic location, or another general status. You can do the same with most paid social media ads including those on Facebook, Pinterest and Twitter.

There’s even a Facebook feature called Offers, which allows you to create your offer directly through the platform.


Do the math to make smart discount decisions. Put your offers in front of the right people. Get the most out of your holiday coupons.

Jessica Thiefels has been writing and editing for more than 10 years and spent the last six years in marketing. She’s worked with a number of small businesses and security clients, and you can find her work on publications like Virgin, Forbes, and Manta.