Creative Couponing: The Best Friend of Small Business
, By 
BOGO. BOGOHO. BTGOF. No, I’m not speaking in tween. Anyone with an email account has probably been spammed at least a hundred times with similar acronym-ed subject lines. The Buy One Get One Free deal is the O.G. of the retail world—a “come one, come all” to the deal-hungry. I know it well. Just last week I was influenced into buying several shirts I don’t really like that much, but what a deal.
Coupons and deals are great. They achieve their basic purpose—bringing in customers—almost without flaw. And in the many, many years businesses have been putting them to work, they haven’t evolved much. Sure, there are new incentives, new channels, and new technology, but the core function has always been getting people through the door (or, nowadays, onto your site/app).
With the explosion of social media since the turn of the millenium, that’s all begun to change, and no one stands to benefit more than small businesses. In came “The Share.” While coupons were once straightforward revenue-generators, the end goal being direct return on investment, they were now suddenly incentives for customers to run businesses’ marketing campaigns for them. Coupon profits became a byproduct of a much bigger goal: visibility. Businesses began to realize this whole thing could be done better than “Spend $ to Get $” and the scope was much larger than one customer’s cash.
This is news to no one. We’ve all checked in on Yelp or liked a Facebook page to get the free dessert. The thing is, very few businesses do it right. How many shares and check-ins have you deleted right after you redeemed the deal? Personally, 100%. Like many, I hate spamming social media but love a good deal. But take a company like Groupon that reimburses you for the full price of your coupon if you get friends to purchase the same one. This incentivizes me to share well, and after me, the friends I bring on board, and then my friends’ friends, till we’ve created a whole little army of redemption warriors, sharing well till our fingers cramp.
The beauty of this trickle effect is that it encourages consumers to target receptive friends who are more likely to take advantage, essentially taking you out of the equation and putting the marketing power in the hands of your (paying) customers. Have you ever heard of a marketing team that pays you to work for you? Ours certainly doesn’t. To hire your warriors, you just need a channel. Social media works, but not as well as communities that revolve around your business and encourage new recruits to continue engaging after they’ve reaped their rewards.
Example
If my business has an app and I offer an exclusive, in-app coupon to users who get 3 other friends to download, compare the results to what I’d get from a standard coupon.
Standard:
- Reward and please my existing customer.
- Earn profits from them redeeming.
- And, sure, reap the benefits of a happy customer, like word-of-mouth.
Shared:
- Reward my existing customer.
- Earn profits from them redeeming.
- Gain 3 potential new customers.
- If they accept, reward my 3 new customers.
- Earn profits from 3 new customers redeeming.
- Gain 9 potential new customers when those 3 share.
- You get it. It’s more like numbers 7-100.
There are endless way to do it, but it all comes down to one purpose, and that purpose is no longer the profit; it’s the profit times infinity.
Jana, great idea. I’m just finishing up an APP for a car wash and have been working on a loyalty program. They are an almost totally automated set up (only one person on site), so anything that reduces the work for that person is good. Do you have any demo or live APPs that use this referral program so that I can see it in practice? Thanks.
That’s a great system, and part of what I’m working to build with my business. I hope to help local businesses actually build their business using apps and growing their fan bases while offering programs just like this.
I believe this is the future of business. Bringing more of what I envision being old time customer service and engagement to modern times.
It seems as if we’ve become numbers and I’d like to help change that. And heck, it’ll be a lot of fun, too.
Excellent stuff, Tracy. Looking forward to working with you!
How can you keep track of how the person had 3 friends download app?
Also what if 5 people send out messages to friends to download app how can you keep track on a large scale?
Hey Rob, check out my response to Tony below! If you expect large numbers of shares, I’d recommend opting for the 1st alternative I mentioned to Tony, where you have the user who shared the app supply the email addresses of the people they got to download (instead of the new users listing who referred them). This way, you have each user’s full share list and can just scan your subscribers to verify they’ve all downloaded and signed up for your mailing list.
I love the idea. I just cant figure out how to set it up so that my app knows when the offer to have 3 friends download the app is completed and unlocks the coupon automatically. I might just be missing something. If anyone can enlighten me on how to set that up I will send good karma your way.
Hey Tony, it’s not automatic, but my favorite way is through a combination of the Email Collection feature, an Email Form, and a QR Coupon. (And the Tell Friend feature, of course!) In this scenario, email or SMS sharing is best so you can get the unique email address or phone number of the sharer, but I’m sure there are creative ways to achieve this through social media sharing as well. Email Collection also serves the extra purpose of boosting up your email subscriber list (just another way to keep people tuned in on other deals, promotions, and events).
Your steps:
1. Set up the Email Collection feature through the Promote section of your dashboard, so new users are prompted to supply their email address.
2. Create an Email Form that new users fill out with a field for the email address, phone number, or name of the person who referred them to the app. (Which one you request depends on how you choose to set this up, but I prefer email.)
3. Add a QR Coupon with 1 scan necessary to redeem the coupon.
4. If you want to make it easy on your users, add linked slider images that detail each step of their redemption process, taking them straight to the appropriate tab when clicked. (Ex: Step 1: Share this app with 3 friends. Tell them to list you as their referee once they download!)
User steps:
1. I download your app. When I open it, I’m prompted to supply my email address.
2. I fill out a form that asks me how I heard about the app.
3. I share the app over email or SMS, telling my friends there’s an exclusive in-app deal they can redeem when they share the app with their friends. They need to list me as their referee.
4. My friends download the app and go through the same process above. They list me as their referee.
5. The business gets 3 new submissions (with my email/phone/name listed as the referee) and sends me a QR code to scan and redeem my deal.
Alternatives:
– To cut down on the business’ work, you can instead ask the sharer to fill out a form once they’ve gotten 3 friends to download. They’ll need to confirm the email addresses the friends supplied. This means you don’t need to keep track of how many referrals each user gets you, because they do it for you and tell you when they’re done. You just cross-reference your subscriber list.
– To eliminate the hassle of emailing QR codes, you can instead just require users to come into the business to redeem their coupon, then keep the QR code printed at your location. (We recommend behind the desk/somewhere only you can access.) You’ll still need to reference the subscriber list to confirm.
– The Loyalty feature is also an excellent option if you want your users to redeem at your location. With this option, you can also totally eliminate the user’s extra steps by having them simply get the friend they’re with to download the app and supply their email. When you see that they’ve both downloaded and supplied their emails, you can plug in the secret code (or have them scan the QR).
There are tons of possibilities here, so I recommend giving a couple different set-ups a try to see what works best for you. It obviously depends a lot on the business’ specific needs and what kind of deals they plan to offer!