In the fierce competition for customer attention, retailers pursue a wide variety of strategies to get shoppers into stores and keep them coming back over the long-term. 

In particular, coupon platforms have recently increased in popularity. Although they hold some short-term growth potential and might increase your store’s visibility, the blanket promotions offered by these programs end up costing you more in the long run — and largely fail to boost your same-store profits.

Let's explore where these coupon platforms fall short, how you can measurably change customer behavior and create loyal customers, and what to look for in a partner to guarantee a return on investment for your business.

The downsides of discounts

Whether you’re handling discounting in-house or partnering with a couponing product, the practice usually favors customers or retailers, rather than driving equal benefit to both parties. Many of those products have guided retailers to strategies that unnecessarily discount products when a customer would have paid full price, giving away margin for little to no return. Here’s where they’ve gone wrong:

1. Broad-based promotions that don’t speak to customers

One-size-fits-all discounting is administered with little to no measurement or precision. Instead, retailers either provide blanket discounts to their user base or they bucket and target customers in segments based on some kind of demographic or spending criteria. A net-new or infrequent customer might jump on an occasional promotion, but these promotions rarely inspire loyalty. It’s also impossible for retailers to know whether these views, clicks, or discounts result in any real behavior change or bottom-line profit.

2. Unnecessary discounting that cannibalizes expected profit

Say that you’ve got a regular customer who always buys their household essentials from your store, but she gets their beauty and personal care products elsewhere. That’s not uncommon — in the quest for value, shoppers spread their trips around and visit up to five banners per month. A blanket promotion on body lotion might influence that specific shopper to forgo her other trip and get personal care products at your store — but your customers who always purchase body lotion from your locations can also access that promotion. Blanket discounting cuts into your expected profit, and that’s bad for business.

3. Double discounting with your current customer programming

Many retail chains have loyalty programs already in place, but coupon platforms are rarely built to work in tandem with them. When sales are stacked on top of one another or customers are incentivized to purchase the same marked-down products, your profit will shrink even further. To make your loyalty program more effective, you should layer on additional (profitable) tools that will boost your program’s reach, not coupon platforms that will cannibalize your profits.

What your stores really need

One-time coupons and segmented promotions aren’t exactly the silver bullet to creating regular customers. Instead, let’s explore three tactics that can really change customers’ behavior and get them to consistently choose your stores over others.

1. Wider reach for more exposure

Loyalty programs are ideal for customer retention but not acquisition. Great loyalty programs get about 30% of their existing customers to sign up and about 10% to 15% of those customers to remain loyal. Coupon platforms are designed for just that — coupons. They’re not made to increase your brand’s visibility or awareness in a local region. Instead, go after the 70% and look for a location-based marketplace that keeps your store at the top of customers’ minds, making sure your brand is the first one they think of when it comes time to make their purchases, large or small.

2. Zero-cost access to digital marketplaces with strong customer bases — which helps you find new or lapsed customers

Some marketplaces and platforms come at either an upfront cost to you or take a significant portion of every sale. The best marketplaces avoid those added costs by listing your business for free and focusing on driving measurable, incremental profit to your bottom line. ‍

3. Personalized incentives that keep customers coming back

Some marketplaces and platforms come at either an upfront cost to you or take a significant portion of every sale. The best marketplaces avoid those added costs by listing your business for free and focusing on driving measurable, incremental profit to your bottom line. 

The right platform for retailers

Amidst a sea of options, marketplaces like Upside provide personalized promotions that customers love. More importantly, they offer retailers substantial growth by attracting new customers, improving trip frequency, and increasing money spent per visit. Upside uses your own anonymized transaction data to provide targeted promotions that scale with your business and complement your existing strategies and loyalty programs. 

The time is now for grocery stores to improve their customer retention.