More often than not, providing discounts to all customers is not a good idea. Such a strategy typically cuts deep into the company's margin without bringing sufficient benefits. Discounting may also hurt your brand equity.
There's one way to use discounts correctly though, by targeting only those customers who need the extra push. Never resort to long-term discounting, especially with those customers that are willing to pay full price. Segmentation is therefore crucial for your loyalty program.
Identify customers who used to visit often and now "dropped out". Address them and offer an incentive to come back.Benefit:
Coupons targeted to a well-focused group can offer bigger value without destroying profitability & brand image.Example:
„Dear Jane, we've missed you lately… a free drink on us?"