The Coupon’s Purpose is to Build More Sales, not Erode Profits
Have your coupon marketing campaigns been increasingly less effective? You’re not alone. Couponing is more competitive and requires better strategy today. And that’s not something that comes easily to small and medium sized businesses.
As these coupon infographics below reveal, consumers love coupons. So how about creating a coupon campaign that will help you catch attention, improve your call to action, and increase your sales? Your POP campaigns can really be powered up with coupons. And notice we’re not using the phrase discount coupons. Let’s call them upsell coupons or added value coupons. Relying on the power of a discount (check out our post on shopper resentment) is likely not going to cut it for you.
In this post, we’re taking a closer look at consumer attitudes toward coupon marketing today, coupon user profiles, couponing behaviour, benefits of coupon marketing, and how we might evolve a better couponing strategy.
Major retailers and manufacturers have had to scale back their coupon offerings in the face of discount-hungry consumers who push the limits of coupon redemption and alter their buying habits in response to discounts. The point is, is that couponing is valuable and there’s a huge base of eager consumers waiting for yours. The coupon is your promotional tool.
Beat The Competition
Despite potential liabilities, coupon promotions power up POP campaigns, product launches, or lubricate sales channels. With so many consumer goods and services companies using coupons as part of their promotions, you need a smart strategy. And look at some startling facts about coupon usage and coupon redeemer profiles (such as affluents usage).
There is even value in the high percentage of coupons that aren’t redeemed. The brand impression of a coupon is powerful. This exerpt is from the Harvard Business Review:
In an experiment with eight national retailers, we analyzed campaigns involving more than 500,000 targeted coupons, for items representing more than 300 brands, mailed out over 16 months. We found that consumers who received but did not redeem coupons still typically increased their purchases in the associated stores. In fact, as a group the nonredeemers accounted for 60% of the coupons’ “sales lift”—the additional amount spent on both promoted and unpromoted items. Customers who did not receive coupons served as the control group to establish that the observed lift came from the coupons and not something else.
There is Hope with Strategy
If you’ve failed in couponing don’t give up the faith, JC Penney gave up the faith with their new CEO and it almost bankrupted the company. He believed couponing was a liability only, but soon discovered it was a pivotal part of their ability to market. The benefits are underappreciated. Do you think Proctor & Gamble would give up on coupon marketing? Improve your coupon marketing strategy, get over your doubts and you may get the results you need.
Go Digital If Only To Learn
With digital media, you can target very carefully and avoid giving discounts to the wrong audience, and collect valuable sales data.
Mobile digital coupons have some impressive redemption rates and they are perhaps the most measurable and accountable promotional tool. Digital couponing allows you to collect demographic/psychographic info and feedback you need to optimize your traditional print coupon distribution. Distribute digital coupons massively via your website, Facebook or Pinterest page, or coupon sites such as coupons.com, groupon.com, and smartsource.com. Online coupons have almost zero cost so you’ll save considerably on your print costs.
Customer Profile Based Targeting
You can improve performance and distribute your coupons in a timely fashion to those segments most likely to redeem them and also be persuaded for the cross sale or upsell. The coupon should be an upsell tool to increase revenue, retain customers, and unload tough to move stock.
If you’re relying on paper coupons in traditional media, you’re not recognizing changes in consumer preference. You really need to gauge your coupon discount more carefully, and discover your customer’s coupon redemption profile. Promotional media are more complex now and you may have to think in terms of multi-channel marketing and how your coupon strategy will work within an array of media — particularly digital.
Shoppers Redeeming $11.42 per Shopping Trip
Shoppers still like coupons a lot. For some, it’s almost a lifestyle and you should discover more about each of these coupon redemption profiles.
Researchers discovered that consumers “save $11.20 on average per shopping trip with coupons (11.5% of the basket total), with 15 minutes of seeking, clipping and planning their shopping with coupons.”
See what this infographic shows about the US consumer’s coupon craze:
Perceptive Analytics has released an excellent whitepaper on couponing strategies. Perceptive Analytics is a data analytics company, offering specialized services in marketing analytics, and web Marketing Analytics. This whitepaper discusses face value, expiration date, purchase requirement, timing and distribution of coupons as the key factors in optimizing a modern coupon campaign.
Armed with your new insight into the benefits of coupons and coupon redemption profiles, and benefits of improved coupon marketing strategy, you’re ready to launch a campaign that works.
Discover more about POP and the power of shelf display and floor display promotion. Point of Purchase is the battlefield and Ravenshoe Packaging can help you win it. From secondary packaging design, blister packs, clamshells, to graphic design to packaging fulfillment, you’ll enjoy the advantage of full service marketing and fulfillment. It’s worth exploring.