To attract local customers, a growing number of small business owners are using mobile coupons and loyalty programs to attract foot and online traffic, and to introduce themselves to profitable customers.

Small business owners have a variety of ways to promote their companies through special offers, and many are finding that offering attractive discounts to new or loyal customers can increase sales and profitability.

One of the easiest ways to distribute a special discount to existing customers is by inviting them to register for your email list, and periodically sending them a coupon. This technique can be a valuable way to make customers feel like an important and appreciated part of a select group.

Attractive discount offers can reduce the profitability of your new customer's initial purchase, but could establish a long-term relationship that offers considerable profits down the road. In addition, even aggressive coupon offers are likely to be more cost-effective than expensive advertising efforts that are difficult to measure.

Don't overlook the potential value of offering discount coupons through Facebook, Twitter or other social networking sites. Many small businesses that serve local markets have had success, for instance, in promoting offers to their Twitter followers or to people who check in via location-based services such as Foursquare.

Location-aware apps give merchants a low-cost way to reward loyal customers while also providing detailed, real-time insights into the behavior of their most frequent visitors.

Loyalty Cards Going Mobile

Punch cards, coupons and similar incentives that reward loyalty customers for repeat patronage are making their way into the mobile arena. While most of the efforts so far are experimental, mobile loyalty programs may shortly deliver strong benefits to customers and merchants alike.

For consumers, mobile loyalty cards offer a number of advantages. Since people don't have to keep track of paper cards, they're more likely to take advantage of their various loyalty programs, and to receive the discounts and offers they're earning through regular purchases.

In addition, mobile loyalty programs are likely to be more secure than paper-based punch cards or coupons. Merchants won't have to worry about storing paper cards, and mobile loyalty programs are less susceptible to double-punching or other forms of employee fraud.