Are $1 Coupons Enough?

I was at the post office the other day, and this guy was passing out $1 off coupons for a local barbershop. I'm thinking to myself: "What the heck are you doing?"

"Why would I (or anybody else) visit your barbershop to take advantage of a measly $1 discount?"

"Nearly everyone who gets haircuts already belongs to a barbershop of some sort. And your game plan to get them to switch to yours, is to save them a $1?"

Don't get me wrong. A $1 coupon is worthwhile using if I'm going to the grocery store to buy some $2 waffles. That's a 50% discount. Even if I were at the mall buying some $3 sunglasses, a $1 off is a 33% discount.

But $1 off a haircut is an insult. Haircuts these days cost at least $15, but sometimes up to $20. So handing me a $1 off coupon is only offering me a savings of about 5% or less. That's not enough to motivate anyone to take action.

If you're going to use coupons or discounts in your marketing strategy, make sure to make people feel that they are actually getting a deal. Ideally, the savings should be at least 15% - but never below 10%. The more savings, the better response you will get.

If done correctly, you will always make any loss revenue back through the increase of new customers.