Price is often a major factor in the purchase of any service or product. But it’s important to separate perceived price and received value. For example, $5 for a bottle of water might seem expensive, but that’s a deal if you’re walking through a desert. And there’s nothing blatantly wrong with paying more for quality (or perceived quality)––just look at businesses like Apple®, Nordstrom, and Jaguar.
However, this has given rise to the idea that lower prices mean lower quality, and discounts such as coupons diminish products and services even more. While it’s true that some people might think that way, there’s no evidence supporting this. In fact, coupons add value for some customers, bringing them back to your store. And coupons aren’t just for those struggling to make ends meet: 90% of consumers use coupons in some way. Whether you want to offer coupons or not, it’s important to approach your Service Department’s discounts and value-adds strategically.
How to use coupons effectively
There are several factors that come into play in creating effective coupons, and it can get overwhelming. Here’s a short list of coupon best practices to drive business.
The coupon should specify what it can (and can’t) be used for. Include the original price to show how significant the discount is. And try to use flat-dollar discounts rather than percent-off discounts when possible––they’re easier for customers to understand. Be sure to include any usage disclaimers such as “Limit: one per customer” and the expiration date if there is one.
Add value without lowering cost
Informational coupons describing unique offerings are very effective at driving customer traffic. Also, coupons offering something free with purchase, such as a small gift, a car wash and vacuum, or other additional service will allow you to entice customers without discounting your current products.
Save your best coupon offers for your slowest times. And if you’re targeting a special event, season, or holiday, make sure you send your coupons out early enough that they’re usable, but not so early that they get forgotten.
Target specific customers
Sending everybody the same offer doesn’t do your business any favors. Segment your customer lists to reach the right people with the right message. Usually it’s wise to offer larger discounts to prospective customers to draw them in, and smaller discounts to your regular customers to keep them coming back.
Keep a couple for a rainy day
Ensure you have coupons readily available for your best customers—or offer them in instances where a coupon makes a difference between them completing a needed service or having to wait. It shows your customers that you’re dedicated to their experience, and helping them takes priority over making money.
These tips will help jumpstart your coupon marketing strategy. Of course, it helps to have a marketing ally you can count on to assist you.
How to drive traffic without using coupons
In a recent AutoLoop study, we discovered that the biggest reasons customers avoid going to the dealer for service were related to comfort and cost. To overcome the price hurdle, your store could offer a price match guarantee or publish customer price comparisons on your website. This allows consumers to compare pricing before their appointments and avoid sticker shock when they arrive. If you’re not the lowest price in your area, it’s doubly important to explain the value your Service Department provides customers that they won’t get elsewhere. Tackle the comfort sticking point by highlighting standout perks such as OEM-trained service technicians, a guaranteed quick transaction time, reliable shuttle service, or a well-appointed waiting room. Calling out these value-adds shows customers that, while your shop might cost more, it’s well worth it, even if it isn’t the Ritz.
Finally, customers want options. Providing customers with good/better/best menus for common services or parts can go a long way toward earning their returning business. Ever visited a restaurant where the host forgot to give you menus? It’s hard to know where to start without knowing what the restaurant offers. Immediately making visitors aware of the services and pricing you offer is one of the most basic conveniences you can provide. And it’s beneficial for you, too: we’ve found that customers who are given several pricing choices and service levels are more likely to take your recommendations and encourage more ROs. That’s why it’s essential to promote these menus, both when customers schedule service and when they visit.
When in doubt, do what makes sense for you
Whether coupons are right for your store is a question only you can answer. Whatever you decide is right for your Service Department, there are a variety of ways you can draw customers to your store that will enhance their experience and drive more business.