Traditional Coupon Redemption Rates: Are They Worth It?


The entrepreneurial spirit in you has germinated and thrived. You've built your own business, or at least have been instrumental in building one, from the ground up. There is a basic rule covered in most first year Economics courses: every business exists to be profitable. It is an ultimatum that looms over every decision, from the largest to the smallest.

And to achieve that ultimatum, every business owner must have a strategy that includes an advertisement budget. This article is primarily geared toward the already established business owner who is experimenting with different ad strategies. Your initial budget may only allow for one of many traditional methods. The good thing about this is that each method is well established and there are usually corporations out there designed to help you meet with success.

Please note, advertisement is one of those areas that will push you to the brink of your comfortable spending limit. Sometimes you will be forced to choose whether to invest heavily in an ad campaign for long-term results; other times you will come across a less expensive method that pays quicker dividends. Fortunately for you the Internet has forever changed the advertisement landscape.

Still, should you choose to use a more traditional coupon promotion, there are some things to consider, namely the coupon redemption rate. Basically, the redemption rate refers to how many people actually bring in your coupon versus how many people you've mailed it to.

For example, say you mailed one hundred coupons and one person brings it in for redemption. Your redemption rate, then, would be 1/100 or 1%. Of course, there are a number of variables that will sway this percentage either way, depending on the nature both of your business and/or your target market. As with anything, you usually get out of it what you put into it. So, be adventurous; with some market savvy you may be able to strike the right mixture of enticing promotion and properly targeted customer base.

Regardless, the rule of thumb is typically around 1% for most coupon promotions. This knowledge is crucial as you budget and prepare to launch your promotion. For, you must always be diligently aware of the costs, if you wish to maintain a profitable business for years to come.

There is an old adage that states: "there are many fish in the sea." Nowhere is it more pertinent than in the business world. In other words, a diversity of people out there need what you offer, the challenge is finding the most affordable way to put it in their hands.