Offering Coupons to Increase Sales

Have you ever wanted to sell a product on your website, but as hard as you tried, you were unable to get people to buy it? It was a great product and people expressed interest in it, but not enough were buying? The problem isn’t your product—it might be, but I doubt it—but instead, the problem is your overall sales concept. You are not appealing to people’s psyche and that is limiting your sales.

People like to believe that they are going to get something for less than everyone else. In other words, people want to think that if they buy the product, they are getting it for cheaper than someone else. They want to think that they gamed the system and that they are “special.”

Understanding that psychological aspect to the game makes it so that the seller can increase the number of products that they sell. By understanding that the buyer wants the most bang for their buck, and that a coupon reduces the price and therefore provides that increased bank, a seller can increase the amount of money they’re going to make from selling their product.

Take for example, two coupons that I offer on one of my websites. One of them is a 10% coupon for Island Surf and the other is a 20% coupon for Navteq. Now, these two companies are not making as much potential profit on the sale of their items because they are cutting their revenue by 10-20%. However, they are actually making more money because they are giving away the coupon. Here’s why…

In economics, there’s a fine line between price and revenue. If you price something too high, sure, you make a lot of money for every one item sold, but you don’t sell as many products. If you price something too low, sure, you sell a ton of items, but you don’t really make all that much money per item. If you price it just right—that happy medium between high and low—then you make the most because you are selling the optimal amount of product for its price.

Another reason that you might give a coupon away is because you want to increase the overall purchase size. It’s better if a customer spends $125 instead of $100, even if you had to take 25% off the overall purchase. If you’ve got that extra $25 coming in, that’s good. What a coupon does is create a scenario where more money is being spent because the customer believes they are getting a better deal. So, they spend more which means you bring in more money…

If you’re pricing items correctly and the coupon isn’t too great, that means more profit. Just because the profit per item is lower, the total profit is actually higher because you generated more revenue.

Your best bet is to price your item and see how it does. If it is selling like mad, you might have priced the item too low or you’ve already found your perfect price range. However, if you’re not getting very many sales, release a coupon. Maybe it’s 10% or maybe it’s more. But, release the coupon and see what it does for your sales.

Chances are, you’ll see more people buying it because it falls into their price range and suddenly, they are more excited. And since they are “gaming the system,” they’ll feel that emotional and psychological connection to getting it. And that’s where you walk away with more sales.

Why else do you think so many companies around the world utilize coupons? They work!

Jay is an Internet marketer who specializes in helping businesses increases sales. One of the sites he runs often times has coupons and discounts for products such as Navteq and Island Surf. Visitors are able to find islandsurf.com coupons and navteq promo that really help users save money.