How to take advantage of a hot trend: coupons
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The news has been reporting that consumers are using coupons again. Coupon use is at an all time high. Dismissed as a 90’s fad, coupons haven’t been popular in recent years. However coupons are tied to economic cycles and they become very hot in downturns. A household budget can save almost 30% of their food expenses alone. Buyers can save in other areas as well. How can your business take advantage of this trend?
Coupons promote a business - even if they are never used - a mini ad that doesn’t cost anything to distribute on-line. Coupons will get referrals from your existing customers. Coupons will motivate buyers to buy even when they are worried about the economy. Perhaps that best part is that you control the timing and the offer. Have slow days - make an offer to encourage shopping during those time. Have some hard to move inventory - make a 2 for 1 offer. Use coupons for contents, bonuses and rewards.
Discount coupons give cost savings to customers while providing valuable data and inventory control to the seller. Here are five reasons that creating discount coupons can benefit a business:
- Bring in new customers. When a consumer is ready to buy and knows of multiple sources for the product, price is often the deciding factor. Consumers are attracted to a good deal. Offering a discount coupon to new customers provides an added reason to shop at a particular business over all other options.
- Encourage repeat business. Satisfied customers will be more likely to shop again when they are reminded to do so, and given a compelling reason to return. A special discount coupon can be sent via email at specific intervals as a thank-you for past purchases and to encourage repeat business.
- Increase order size. Time-limited offers create a sense of urgency and give customers a reason to buy more than they originally intended. Discount coupons can be offered for a percentage off the purchase price of a second item, for example, or for free shipping on orders totaling a specific amount.
- Tracking. Gathering data on customer trends is imperative for every seller. Issuing separate discount coupons for different mailings, website promotions and affiliate partners, for instance, provides important information on where customers come from and which marketing campaigns are most effective. This data can then be used to make decisions about future marketing programs.
- Control inventory flow. Physical stores manage inventory flow by marking down items they want to move. Coupons can be used for the same purpose. The discount can be offered across the board, or used to bring in new customers with an interest in that particular product category, or sent to previous customers who bought similar products.
There are several ways discount coupons can be applied. Businesses generally offer a set dollar amount off the normal price of a product, a percentage off the price of a single item, a discount on the order total, or free shipping on orders that exceed a minimum dollar amount.
Discount offers can be extended through a number of vehicles. They can be posted on the landing page of the storefront. They can be emailed to select past or potential customers. They can be introduced on the order summary page to encourage the customer to add items to the shopping cart. Or they can be listed at various coupon sites on the Internet.
Many retailers determine the effectiveness of their marketing strategies by tracking the use of discount coupons. The information can help businesses achieve the highest possible ROI and sales at the best available rates.
Is Accepting Credit Card Payments Necessary for Online Business Owners
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There are two ways that sites can arrange to accept credit card payments. One is by establishing a merchant account through the business owner’s own bank. Another is to use a third-party service to process the payments.
Bank Merchant Accounts – Most banks offer merchant accounts and processing gateways to their account holders. Funds from credit card purchases, less the agreed-upon fees, are deposited into the merchant account, then moved to the owner’s business or personal account on a regular basis (usually within 24 hours). The primary disadvantage is that approval for merchant accounts is more difficult to obtain for internet businesses than for standard retail businesses. Every bank has its own qualification guidelines and fee schedules.
Third-party services such as PayPal eliminate the need for a merchant account. They offer real-time processing of payments and transfer of funds to the business owner’s account for a fee, usually a small flat rate plus a percentage of the sale total per transaction.
Other features available might include a shopping cart that the business owner can install on the website, conversion from U.S. dollars to foreign currency, the ability to accept multiple forms of payment (such as electronic debits or echecks), customer service, and set-up assistance.
PayPal offers three account types, two of which can be used by merchants to accept credit card payments: the Premier Account and the Business Account. An individual can open a Premier Account, but a Business Account can only be opened by a registered business. A 2.9 percent fee is charged for receiving a payment, but as the dollar volume increases, the rate drops. Premier and Merchant Account holders can incorporate special html code into their website to create a “Buy Now” button. With one click, the customer is taken to a payment page to complete the transaction.
PayPal also provides a shopping cart to merchants. This software lets the consumer select multiple items for purchase, then proceed to the payment page to pay for all selections at once.
The cost for setting up a merchant account, processing gateway, and shopping cart can range from $500 to $1,500. For the start-up or small business owner, third-party services such as PayPal may provide a more accessible, affordable alternative to traditional banking options.
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