Specialty Coupon Business Idea
You’d be hard-pressed to find someone who doesn’t like a deal. Everyone likes to think they’re saving money (even if they may not). Starting a specialty coupon business not only caters to the saving-money crowd, it can also be a highly profitable small business.
Let’s get back to the saving money thing. As a kid I remember my Dad driving all over town trying to find a gas station where he could save a cent or two on a gallon of gas. I would constantly argue with him saying that he was spending more money driving around than he was actually saving to fill his tank. It didn’t matter – I think it was the thrill of the pursuit. Had to find a discount.
Rewinding my years I also remember my Mom coming home from shopping trips excitedly telling my Dad, “Look how much I saved! I saved over $200 on these (insert whatever you want: clothes, furniture, antiques, dishes, etc).” I know my Dad thought this but I was typically the one who would ask my Mom the question, “Mom – how much money did you have to spend in order to save your $200?” This question didn’t seem to compute. And I’m positive it isn’t just my Mom.
Starting A Specialty Coupon Business
Okay, enough with the childhood anecdotes and back to the coupon business. But I did bring up my personal family experiences for a reason. Everybody likes to feel like they’re getting a deal. I think value (perceived or real) is hard-wired into our genes.
What this article focuses on is a specialty small business that consolidates themed coupons into a coupon booklet that you can sell to a niche market – hence the name Specialty Coupon Business.
So what is a specialty coupon business? Let me provide a few examples…
- Discounts at local retail stores and service providers
- Cheaper green fees to local golf courses
- Specialty coupons for new home owners (furniture stores, lawn care providers, babysitters, etc)
- Themed discount booklets (travel, food, hobbies, etc)
- Coupons for repeating services such as dry cleaning, car maintenance, household services, etc.
You’ve all probably gotten in the mail the typical ValPak coupons. This coupon business idea is similar but more highly targeted to a niche. This niche will not only help you target advertisers for your coupon business, it will also help you focus on a more narrow customer segment.
The first step in this business is to decide on what niche market you want to serve. Perhaps you live in Northern California and want to focus on wineries. Maybe you like golf and want to focus on golf course discounts. Perhaps you’re a gourmet food fanatic and also like online business – you could focus on online cooking store coupons.
Regardless of your niche, the question you need to answer regarding your business model is: do you charge your retailers for advertising (essentially creating a double charge for retailers – their explicit advertising fee and implicit discount) and/or charge your customers for the booklet. This question serves as the foundation for your business cash flow.
Finding Customers For Your Coupon Book Business
In the specialty coupon business, you’re essentially an advertiser – a matchmaker of sorts. Your business goal is to match your advertisers with the customers who will buy their goods and services. In other words, you have two customers – your advertisers and the customers you target for your coupon booklet.
Let’s assume you plan to sell a specialty coupon booklet geared at new homeowners in your area. To find potential advertisers, ask yourself the question, “If I bought a home in a new area, what products and services would I need?“. Potential advertisers that come to my mind would include:
- Lawncare providers and landscapers
- House and pet sitting services
- Professional services such as doctors, dentists, accountants, lawyers, etc.
- Movie theaters
- Chimney sweeping
- Automotive care
- Elder care and hospice services
- Artwork and framing services
- Pool cleaning
The list above serves as an example target for your advertiser customers. You’ll also need to define your other set of customers – those people who will buy and/or use your coupon booklet. Before trying to sell to advertisers, you should have an answer to this question. If an advertiser is going to work with you, they’ll want to know how many people will see their ads so they can get a sense of their potential return on investment.
Finding advertiser customers for your coupon business will likely be easier than finding customers to buy or use your coupon booklet. For the latter, you first need to figure out how you will isolate your target market. As a new business, you should narrow down your end user segment. Simply blasting your specialty coupon booklet to everyone in your town will not only be expensive (printing costs, distribution, etc), it will also defeat the purpose of assembling coupons that serve a specialty niche. You need to spend the time to understand how will you find and distribute to your ultimate customer segment.
How Much Should I Charge?
Finding out how much you should charge for advertisers in your coupon business is pretty simple. Simply call a similar coupon provider in your area and ask for their advertiser rates. They’ll likely provide you with a media kit that outlines their consumer demographic and rates. Keep these kits on file. Not only will they help you define your pricing, the kits will also help you prepare your own media kit for your prospective advertisers.
Figuring out what to charge the end users of your coupon business booklet may be a little more difficult. Since you’ll be operating in a specialized niche, this question isn’t one-size-fits-all. Your best bet is a bit math and trial and error. For starters, add up the total discounts in your booklet. If a typical customer will take advantage of 5% of the offers provided, simply multiply the total discounts by 5% for your starting price for the booklet. This will be your high end price and you can work down from there. It’s generally always easier to start high on price and work down than the other way around.
In other words, if your new home owner booklet provides a total of $1,000 potential savings, you’d multiply $1,000 by 5%. This results in a $50 starting price. You’ll probably have to work down from there but it at least provides a starting point. You’ll also need to factor in your revenue from advertisers but you get the picture.
A speciality coupon business is a great way to bring advertisers and customers together. As the broker of this relationship, you have a great deal of control over the pricing and distribution of your product. Make sure you find a niche that interests you and also has a following in your local market. This interest will help you not only identify advertisers, it will also serve you well selling to your ultimate end customers.