Using coupons to sell tours and activities is very common, and is a really popular way to raise brand awareness and increase revenue. With a lot of tourism businesses competing to get customers attention, using coupons is a great way to draw customers in.
There is a lot of different terminology around ‘coupons’, so just to make sure we are all talking about the same thing – ‘coupons’ are also known as ‘vouchers’ or ‘discount codes’. As the name suggests they typically offer a discount off the final price or a promotional price. They are different from ‘gift vouchers’, which are typically sold directly for fixed amounts and do not offer any discount on the price.
For example, take this Bike Tour offering a coupon to their customers with $20 off their next bike tour.
The customer receives this via an online promotion on social media such as your Facebook Page or on your website. You could even place these codes on printed flyers that you place in hotels.
Most tour booking systems will allow your customer to redeem these directly through your website, where the customer simply enters the voucher code (in this case: biketour_spring15) in the booking process and the discount is automatically applied. The added benefit of doing it this way is that you can limit the numbers of discounts available to 50, for example. Once this number has been breached the discount will no longer be available and the customer will have to pay full price. This is a great way to promote scarcity!
Why use coupons?
Get more bookings
The most obvious reason why tour operators or tour guides would use coupons is to get more bookings. When offering money off it will lead to more people booking with you, so it’s a good tourism marketing strategy.
Let’s look at an example: say you issue a coupon offering $20 off your latest tour, representing a 50% off the normal price of the tour. Now lets assume that for every voucher used that leads to 1 additional full priced customer – leading to an additional $500 in bookings (people tend not to like doing tours on their own). Now let’s assume that for every person that attends, they will directly lead to at least one other person purchasing a tour in the future. That would lead to another $2,500 in revenue, leading to total revenue of $4,000 from just one promotion! Of course, you won’t achieve these numbers without follow up emails asking for referrals, reviews and social media shares of photos on the tour. But if you do it right, it’s certainly worth it.
Brand awareness is also a really big benefit of using coupons. This is especially the case if you use third party sites like Groupon or Living Social as you are getting your offer and brand in front of a lot of people. You need to be careful when using these sites as they take a large chunk of the purchase price. Make sure to only allow redemption in slow periods of business and be confident you can deliver on the offer. You don’t want to have heavily discounted customers preventing full priced customers from taking your tour on a busy Saturday afternoon, for example.
The cost aside. These campaigns can be great for getting your tourism business exposure, particularly in your local market. Using third party coupon sites, your social media accounts (local Facebook Groups) are great ways to get the offer out there and known to potential customers.
Quite often when a customer goes to redeem a voucher they will purchase something else from you. Offering a complimentary product to the tour can lead to a consistent revenue stream. A typical example of this is lunch. Another good example, is offering something that will improve the experience such as a wetsuit for a kayaking trip.
Boost business during low season
It doesn’t really make much sense offering big discounts or offers to get customers in the door during peak season but it certainly does once things begin to slow down. Businesses can struggle to generate interest particularly during the Winter months, so offering coupons or even free gifts is a great way to get the bookings flowing. The free gift doesn’t have to be anything too expensive, it’s more to make people feel that they are getting something that they wouldn’t normally get.
So what coupon strategy should I use?
Selling through local businesses: One of the best ways to get reach for your coupons is to start selling through other local businesses. This could be by arrangement with a local hotel or tourist office, where they give their customer coupons to redeem when booking with you. It could also be done where you print out coupon cards that can be placed at the reception desks of local hotels, restaurants, cafes, tourist information. If you are doing this, make sure your cards stand out from the others and clearly display the discount where the person can see it.
Existing customers: A lot of people go back to the same place year after year, so if you haven’t started, you should keep in contact with your past customers. You might be offering something new, or it might be a case where they ran out of time on their last vacation and want to book in with you this time around. Send them email updates on what’s new and of course any new deals that you are running. Even if they don’t want to go back to you again, they might send on the coupon to family or friends.
Third party sites: These are the likes of Groupon or Living Social. Tour operators might sell coupons on these sites to get in front of more people and are willing to take the commission hit to do this. They are a good way to raise brand awareness and get your name out there. As your business grows though the number one aim for most tour operators is to sell primarily from their own website, commission free.
Whatever way you approach getting your coupons out there, they will undoubtedly have a positive impact on your business, resulting in more bookings. Another factor not to forget is to make sure that your online booking software can create and process the redemption of coupon codes.
You will want to make it as easy as possible for the customer when they go to redeem the coupon, and having somewhere to capture the discount code and reflect this in the price is essential. Likewise you will need the facility to create discount codes within your booking software. I have seen a lot of instances where tour businesses have created their own coupon codes manually and crossed these off once redeemed – the customer also had to ring or email to do this. This is one of the bottlenecks faced by businesses and can be very time consuming if not done automatically.
If you would like more information on how to set up a coupon strategy for your tour business, get in touch – Free consultation.