Discounts and Coupons are Not Always the Best Form of Marketing in a Down Economy

A coupon or discount strategy, especially in a down economy,  might seem like a logical and sure-fire way to draw new people into your doors. I would have to disagree with this way of thinking for many reasons. Take a look at this example:

The List, A New Business Intelligence company that helps businesses with lead generation and business prospecting based out of Atlanta, Georgia put out a great publication entitled: Prevailing: Strategies for Marketing in a Recession. In this article, Mark Mears the CMO of the Cheesecake Factory was discussing the ways their company has remained strong with their restaurant’s marketing efforts in this economy.

According to this article, “One way the company has reemphasized its unique points in a non-traditional fashion is through the celebration of its 30th anniversary. Instead of doing direct mail, or a coupon or advertisement in the newspaper, The Cheesecake Factory reached out individually to guests through a multi-paneled print piece detailing its heritage, signature cheesecake and philanthropic efforts. The company has also offered destination sweepstakes contests and instant win games, where guests can win free meals at The Cheesecake Factory restaurants in various cities.

‘Instead of dropping a coupon, we’re telling a story. We’re trying to get them to understand how special they are by inviting them to celebrate our 30^th anniversary with us, engaging them in online sweepstakes and having them come in on future visits and receiving something that we know they love,’ Mears said. ‘A non-traditional way we’re marketing The Cheesecake Factory brand is in a way that builds on the brand’s heritage and unique culture as opposed to discounting the brand.’”

Remember when you are tempted to use price as your draw:

• You do not create any unique value propositions: Instead of selling based on price, if you sell based on what makes you unique you will be extremely more competitive.

• When you create a low price mentality, people are not loyal: As soon as another coupon from a competitor rolls around, your business will be lost to your competition.

• You miss out on word-of mouth advertising opportunities: Instead of focusing on the “one-time hit” of someone using a coupon, focus your efforts on “wow-ing” your current customers and turning those people into your biggest fans.

• You are missing out on long-term benefits: Discounts and couponing are short-sighted methods. Once the coupons go away, you run the risk of your business going with them. Long-term value and unique experiences will last much longer and foster repeat business.

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