Who is Worthy of a Deal?

I got this question recently: Why would I give coupons to my Facebook fans? They will pay full price. This question can be framed in several ways. For example, you could argue that it’s akin to this question: Is it true that the closer a consumer gets to actually parting with money, the dumber it is to offer them a deal?

 

But let’s stick with the original. A couple of responses come to mind:

  • You don’t know that a Facebook fan is willing to pay full price, especially if you’ve ever asked Facebook users to Like your page in order to get access to deals
  • Your understanding of the power of  promotions is too narrow — you might be willing to trade “paying full price” for trying a new product, bringing a friend, writing a positive review…
  • You might give a coupon to someone willing to pay full price to increase their loyalty and advocacy

Let’s take this scenario.  You are a local restaurant owner using Four51′s FanTools platform.  Every table in the joint features a table-tent that asks customers to login to Facebook from their mobile phone and get the SmartDeal (offer) available on your Facebook.  The offer is $2.00 off any appetizer.  Many people ask why you would just “give” them this deal when they are already planning to spend money in your restaurant.  The possible reasons?  Trial, cross-sell high-margin items, and up-sell to boost average ticket size.

Here are some other reasons to offer a deal to in-store customers:

  1. Promote a special event or a loyalty program
  2. Advertise a new store opening
  3. Promote restaurant services (catering, delivery, take-out, ect.)
  4. Encourage visits during other day-parts — i.e. come back later today for X or come in this weekend for Y

Finally, let’s say you did forgo $2 in sales because you gave a discount to someone who was poised to pay full price. Is that such a terrible thing? Don’t offer discounts and then hope no one hears about it. Instead, be smart and have a plan. Be excited about the opportunities to use promotions to drive your business and your brand, and shrug off the handful of customers who (you think) would have paid full price.

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