Everyone appreciates getting a good deal, and for businesses looking to attract new customers or encourage repeat purchases, promotions and coupons can be effective marketing tools.
However, offering a discount doesn’t automatically make good business sense. A promotion that generates a significant number of sales may sound successful, but if the discount substantially reduces your profits, the results may be less impressive than expected.
Over the years, I’ve assisted clients with creating promotional graphics, website banners, coupons, and other marketing materials. What I’ve found is that you don’t necessarily need an expensive advertising campaign or specialized coupon software to get results. For many small businesses, a well-planned promotion, featured on their website and shared through existing marketing channels, can be a practical and affordable option.
Let’s look at some of the promotional strategies worth considering, how to implement them, and a few things to watch out for.
1. Determine What You Want Your Promotion to Accomplish
Before deciding how much of a discount to offer, consider what you’re trying to achieve.
For example, you may want to:
- Attract new customers who haven’t previously used your services.
- Encourage existing customers to return or purchase additional products.
- Generate business during a traditionally slow season.
- Introduce a new product or service.
- Promote seasonal services or special events.
- Increase sales of products that have been slow to move.
These are different objectives, and they don’t necessarily require the same approach.
For example, a swimming pool service company might offer a preseason equipment inspection at a special rate, while a retailer might discount selected merchandise to make room for new inventory.
A contractor might offer a modest discount on a specific service during a slower period, rather than discounting every project throughout the year.
The important thing is to have a defined purpose. Offering discounts simply because your competition is doing so isn’t necessarily a good strategy.
2. Choose the Right Type of Promotion
There are several ways to provide customers with an incentive to make a purchase. The best choice will depend on your business, your profit margins, and the type of customers you’re trying to attract.
Percentage Discounts: These are among the most familiar promotions. An offer such as “Save 15% on Selected Services” is easy to understand. However, percentage discounts can become expensive when applied to higher-priced services or products.
Fixed-Dollar Discounts: Offering “$50 Off a Service of $500 or More” establishes a clear savings amount while allowing the business to set a minimum purchase requirement.
Bundled Services: Combining related products or services can provide customers with additional value without requiring a substantial discount. For example, a landscaping company might offer a seasonal maintenance package that includes several services at a combined price.
Seasonal Promotions: Promotions tied to the time of year can be particularly effective for businesses with seasonal demand. Examples include spring cleaning, summer maintenance, holiday shopping, and year-end specials.
Referral Incentives: Encouraging existing customers to recommend your business can be another option. A discount on a future service or a small referral credit may help generate new business. Just be sure to consider any applicable disclosure requirements, particularly if customers are encouraged to post public endorsements.
Limited-Time Offers: A promotion available for a defined period can encourage customers to make a decision sooner. However, the deadline should be genuine, not an artificial attempt to pressure customers.
Not every promotion needs to involve a price reduction. Sometimes additional service, an extended warranty, or a complimentary upgrade may provide more perceived value than a discount.
3. Use Your Website to Feature Promotions
Your website is one of the best places to feature your promotions because you control the content, presentation, and information provided to prospective customers.
For many small businesses, there are several relatively simple ways to do this.
Homepage Banners: A promotional banner near the top of your homepage can draw attention to a special offer. The design should be consistent with your website’s branding, with a clear message and a link to additional information.
Dedicated Promotional Pages: If the offer requires explanation, consider creating a separate page that describes the promotion, its benefits, eligibility requirements, and how to redeem it. This is particularly useful when you’re sharing the offer through email or social media.
Service Page Promotions: If a promotion applies to a particular service, feature it directly on that service’s page. Visitors who are already interested in the service may be more likely to take advantage of the offer.
Printable or Digital Coupons: A simple promotional graphic can include the offer details, expiration date, and a redemption code if needed. Customers can save it to their phones or print a copy.
Online Coupon Codes: For e-commerce websites, coupon codes can be applied during checkout. Most established shopping cart platforms provide discount functionality, so there’s often no need for additional software.
For service businesses, a coupon doesn’t necessarily need to be automated. A unique promotional code can be entered into a contact form or provided when scheduling an appointment.
Whatever approach you choose, make sure visitors can easily understand the offer and know what to do next. A prominent “View Offer,” “Request an Estimate,” or “Schedule an Appointment” button can be more effective than a promotional image with no clear action.
4. Promote Your Offers Through Existing Marketing Channels
Creating a promotion is only part of the process. You also need to make sure prospective customers know about it.
Fortunately, there are several ways to promote your offers without committing to expensive advertising campaigns.
Google Business Profile
If your business serves a local market, your Google Business Profile is an excellent place to consider featuring special offers.
Google provides an option for businesses to publish promotional posts, including offers with start and end dates, coupon codes, website links, and terms and conditions.
These posts can appear on your Business Profile in Google Search and Maps, helping customers learn about current specials while researching your business.
Google explains how to create these posts in its Business Profile Posts Guide.
Facebook and Instagram
Social media provides another opportunity to promote your specials, particularly when you already have an established following.
A well-designed promotional graphic, accompanied by a brief description and a link to your website, can help communicate the offer.
For Facebook, you may also be able to feature an important promotional post prominently on your business page. Instagram promotions can use posts, Stories, or short videos to draw attention to the offer.
My suggestion is to direct interested visitors to a page on your website where they can review the full details and contact your business or make a purchase.
This also makes it easier to manage your promotion, since you can update the website page without having to revise every social media post.
Email Newsletters
If you maintain a customer mailing list, email can be an effective way to announce promotions, particularly those intended to encourage repeat business.
An occasional newsletter featuring a seasonal special, new service, or customer appreciation offer can help keep your business in mind.
However, don’t overwhelm your subscribers with constant promotional messages. Your email communications should provide useful information, not simply become a series of advertisements.
Be sure to follow applicable commercial email requirements, including providing a way for recipients to unsubscribe. The FTC’s CAN-SPAM Compliance Guide explains the requirements for businesses sending promotional email.
5. Be Careful With Third-Party Coupon and Daily-Deal Services
Websites that specialize in coupons, promotional offers, and daily deals can provide businesses with exposure to customers who might not otherwise discover them.
However, these services aren’t necessarily the best option for every business.
Some promotional platforms require substantial discounts to make an offer attractive to their audience. The provider may also charge a commission or retain a portion of the sale.
For example, suppose you normally charge $200 for a service. If you offer that service at a 40% discount, the customer pays $120. If a promotional platform also retains a portion of that payment, your actual revenue will be even lower.
Once you account for labor, materials, travel, and other business expenses, there may be little profit remaining.
There’s also the question of customer loyalty. Someone attracted primarily by a substantial discount may not necessarily return when the promotion ends.
I’m not suggesting these services should always be avoided. For some businesses, particularly those with unused capacity or products they need to move, the additional exposure may be worthwhile.
However, I would carefully evaluate the commission structure, the number of discounted purchases you can reasonably accommodate, and whether the promotion is likely to produce profitable long-term customers.
For many small businesses, promoting an offer through their own website, Google Business Profile, and existing customer relationships may be more economical.
6. Calculate the Actual Cost Before Offering a Discount
One of the most important considerations is understanding how much a promotion will cost your business.
Let’s use a simple example.
Suppose a service normally sells for $200, and the direct cost of providing it is $120. That leaves $80 before accounting for overhead and other expenses.
If you offer customers a $30 discount, your revenue drops to $170, leaving $50 before overhead.
Although the discount represents only 15% of the selling price, it reduces the amount remaining after direct costs from $80 to $50, a decrease of 37.5%.
This doesn’t necessarily mean the promotion is a bad idea. If it attracts customers during a slow period or leads to repeat business, it may still be worthwhile.
However, it’s important to understand the numbers before committing to an offer.
Another consideration is whether you could provide additional value without substantially reducing your price.
For example, a business might offer a complimentary inspection with a paid service or bundle several related services together. Depending on the actual costs involved, this may be more profitable than a large percentage discount.
The U.S. Small Business Administration’s Marketing and Sales Guide provides useful information about marketing budgets, promotional strategies, and evaluating return on investment.
7. Make Your Promotions Clear and Credible
Customers should be able to understand exactly what they’re getting and whether any restrictions apply.
A promotion should clearly identify:
- What product or service is included.
- The amount of the discount or promotional benefit.
- When the promotion begins and ends, if applicable.
- Any minimum purchase requirements.
- Whether the offer applies to new customers, existing customers, or both.
- Any geographic or service limitations.
- How the offer can be redeemed.
- Any important exclusions or restrictions.
Avoid advertising a substantial discount when the original price doesn’t represent what you normally charge. Likewise, don’t advertise a limited-time offer that is continually renewed simply to create a false sense of urgency.
For example, advertising “50% Off This Week Only” when the same discount is available every week can be misleading.
Clear terms and accurate pricing help establish trust and reduce misunderstandings when customers attempt to redeem an offer.
The Federal Trade Commission’s Advertising Guide for Small Businesses explains important requirements regarding pricing, advertising claims, and promotional offers.
8. Measure the Results of Your Promotion
Once your promotion ends, take some time to determine whether it accomplished what you intended.
For an online promotion, you may be able to measure the number of visitors who viewed the offer, submitted a contact form, made a purchase, or used a promotional code.
For service businesses, the evaluation may be as simple as tracking how many customers mentioned the promotion when scheduling an appointment.
Some useful questions to ask include:
- How many customers responded to the promotion?
- How many were new customers?
- What was the total revenue generated?
- How much did the discounts and advertising cost?
- Was the additional business profitable?
- Did any of those customers return or purchase additional services?
Don’t place too much emphasis on how many people viewed or liked a promotional post. While those numbers can be useful, they don’t necessarily translate into paying customers.
A promotion that attracts ten profitable customers may be more valuable than one that generates a hundred inquiries but very few worthwhile sales.
Tracking results also provides information you can use when planning future offers. Over time, you may discover that certain promotions, seasons, or marketing channels are consistently more effective than others.
Final Thoughts
Promotions and coupons can be effective ways to attract new customers, encourage repeat business, and generate additional sales. However, they work best when they’re planned with a specific purpose and a clear understanding of the costs involved.
For most small businesses, I recommend starting with relatively simple offers that can be promoted through an existing website, Google Business Profile, social media, or customer newsletter.
You don’t necessarily need expensive coupon software or a third-party promotional service. In many cases, a well-designed website banner, a dedicated promotional page, or a simple coupon graphic will accomplish what you need.
Above all, remember that the goal isn’t simply to generate more sales by offering the biggest discount. It’s to attract worthwhile customers, provide good value, and create additional business without unnecessarily sacrificing your profits.
With a little planning, promotions can become a useful part of your marketing strategy rather than an expense that produces disappointing results.
