Are Coupons a Good Marketing Tool?

If you are considering offering a coupon to you customers to increase your sales, think again. Internet coupons are not as profitable and popular as they used to be.

Business owners are reporting that people are calling in to ask if the company would match a coupon from another company. Because of the many deals available, there is no loyalty among the customers. If a customer took advantage of a price discount, they often would find a similar offer with another company and buy the same product or service again. Business owners have found that the people who use coupons are hard to please and complain about their purchases on the review sites on the Internet.

Groupon, which is the largest coupon site on the Internet, is now facing financial woes, because their business is no longer profitable. Eighty percent of the people who subscribed to the site never made a purchase. At one time, Google offered Groupon $6 billion dollars to purchase the company, but they turned it down, believing the company is worth more.

Compounding its troubles is the appearance of copycat coupon sites which have saturated the coupon market making it difficult for Groupon to make a profit. These copycat sites have closed, reformulated, or merged and Facebook and Yelp are no longer interested in entering the market.

Although the daily deal coupons do create brand awareness, they are not cost-effective, because the coupon site has to share the profits with the merchant. The future of Groupon is uncertain as they struggle to make profits.

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