Marketing With Coupons To Have a Double Impact for Quad State Businesses in 2014

As a business owner and as a customer, we all have our own attitudes about coupons. We know that some businesses cannot seem to exist without coupons and some never use the things.

In various sources, including a Harvard Business Review treatment of the subject, researchers have found that merchants could relax any negative attitude merchants may have towards coupons.

It seems that coupons can provide both retail, and some other business types, a double bonus with both the coupons that are redeemed and with those that are not redeemed.

According to the most recent and most complete figures that were analyzed, customers redeemed 3.3 billion coupons in 2010. A considerable number redeemed for sure.

All those coupons, as to dollars saved, represented right at $3.7 billion from regular purchase prices. Exact figures on the dollars-saved amount cannot be figured precisely as some coupons represented percentages.

However, those figures represent only about 1% of the total number of coupons actually manufactured. So is the remaining 99% a big waste?

Hold on. New research seems to suggest that unredeemed coupons are 'highly valuable' and, amazingly, the research says that coupons that end up in the trash ultimately deliver 'greater returns than the coupons that are redeemed' to quote one study.

Trashed Coupons Build Brands—Huh?

In a fascinating experiment that would tickle any marketer's fancy, eight national retailers' coupon campaigns were analyzed. The study involved more than 500,000 specifically-targeted coupons. Those targeted coupons represented over 300 brands. The coupons were mailed out over 16 months.

The research found that those 'consumers' who received the coupons but did NOT redeem them (aka non-redeemers) actually INCREASED their purchases in the sending stores.

The non-redeemers' activity was actually followed and logged. The coupon non-redeemers [again, non-redeemers were those who RECEIVED the coupons but did not redeem them] increased their purchases in the sending stores.

In fact, the research shows that fully 60% of the 'sales lift' of the amount spent on BOTH promoted and non-promoted items occurring in the sending stores were from the non-redeeming group.

The control group in the research did not receive any coupon so as to allow clean testing so as to enable the researchers to verify that that 60% of the sales lift did indeed come from the group who had been mailed, but who did not redeem, the coupons.

Hence, coupons, especially non-redeemed coupons, help increase awareness of the brands of sending retailers.

Some Marketers Respond in “I Told You So” Fashion

Calling the extensive testing not surprising, some marketing consultants have trumpeted such findings for years, but have not had an 'erudite' study to back up their claims with coupon-inquisitive clients.

One Quad State marketing consultant who did not wish to be identified, told the Quad State Business Journal,

“Coupons actually serve as mini advertisements for a company in not only building their brand but by building foot traffic on 'off-campaign' occasions—especially when delivered via a postcard marketing campaigns. Recent advancements in personalization also give a company fine-tuned targeting capabilities. If businesses realized how powerful this increased awareness can be, they would take as much care with coupons as they do their other marketing materials. Coupons should be used to build long-term relationships, not just close a one-time deal to get cash in the door.”

Do Larger Coupon Discounts/Values Result In More Exposure?

Many owners look at marketing consultants with ideas for coupon campaigns as simply 'Trying to give away my margins with coupons.'

No doubt reality would find the opposite to be true in 95% of most cases.

That said, there are several tests that businesses can try with coupons on their 'own turf' to see what really works for them.

There are several theories on providing larger discounts, yea verily, larger value, on marketing promotions—many fit with coupon marketing.

These theories, backed up by marketing reality in many industries, are backed up by the one dictum of 'you need to find out what pleases your customers.' Many call these 'customer enrichment' initiatives.

We see them initially in Groupon® or other daily deal sites. Yet those situations usually do not build the long-term customer relationship like a more custom coupon campaign could. Great traffic is created, but some merchants are finding that few stick around for the higher-margin products.

In fact, some businesses test and re-test campaigns so well for their own marketplaces and customer acquisition, that their one repeated refrain with their marketing consultants oftentimes revolves around “How much can we give away on the front end?” in buying customers.

This is why you are seeing double coupons being used in a variety of situations—from McDonald's® straight across many industries.

These coupons are not 'double' in the sense that they are doubly discounted, but rather a coupon strategy that allows for an initial 'deal' and the second coupon for '$X Off on any purchase totaling $Y.'

This double coupon strategy gives merchants their best chance of building loyalty and increasing the spend of customers.

Speaking of Increasing the 'Spend' of Each Customer...

Many good consultants and business coaches help an owner develop their back end business—what happens after a customer buys—in establishing a good coupon marketing campaign.

To this end, the Business Solution Network have many solid Quad State pros who can help you do just that...and do it on a shoestring to test the waters to see how large a market you actually have.

Find them on the BSN site and links below in the Reference section.

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For further reading about the coupon study authors as referenced by the Harvard Business Review:

Rajkumar Venkatesan is the Bank of America Research Associate Professor of Business Administration, and Paul Farris is the Landmark Communications Professor of Business Administration, at the University of Virginia’s Darden School of Business.

For further information on Quad State Business Resources:

www.TheBusinessSolutionNetwork.com (Visit pros under the tabs 'Graphic Design' and 'Business Development' for the latest in what's working now.)