1. Treat the discount as another form of advertising. I have spoken with many small businesses who don’t give a discount because they have their own customer reward program, but they then spend on advertising to attract new customers. Local discount programs or reward programs should be viewed as advertising you pay for only when it works. It’s like a brick-and-mortar version of Google AdSense in that you are only giving a discount away when someone uses the discount coupon or member card.
2. Structure discounts around your personal circumstances. For example, if you are a restaurant and you are fully booked every lunch and dinner then you don’t need to offer a discount. If you are only fully booked on weekends then offer a discount that is applicable during the week. If your store or restaurant is quiet then you have nothing to lose!
3. Maintain Control. Make sure you understand where, when and to whom the discount is going to be offered. The discount should be appropriate to your area and your desired customer base. You should always have an understanding of the terms of the expiry of the deal. Ensure the local reward program is legitimate and test their claims. Ask about the members that they will be providing discounts to.
4. Consider your branding strategy. Many business brands prefer not to discount if it’s not consistent with their branding philosophy.
5. Can you afford it? Review your product margins and make sure you can afford to give away the discount you are offering.
6. Don’t be bullied. Some local discount programs will only promote your business if you provide a discount they nominate. Ensure you can afford to offer the discount under their terms, or don’t participate.
7. Test and test again. If you provide a discount and nobody is redeeming the offer it may be because (1) the discount is not attractive enough or (2) customers from the reward program are not the right target market for your product or service. In my next post I’ll run through some approaches to testing and assessing if your discount is appropriate.
8. Communicate the discount to your staff. The benefits of the discount can quickly turn into a negative experience for the customer if staff are not aware of the discount. Ensure you are able to communicate the discount to staff as part of your internal marketing process.

As a general rule, unless you are turning away customers I think it’s worth giving promotions in local discount programs a go. Members of discount programs will select or try merchants based on their participation. So long as there are no costs to participate and you can afford the discount it’s advertising you pay for only when it works.

Technorati Tags: Discount Marketing Plan, Local Discount Programs, Small Business Marketing