Coupons, Coupons and more coupons

With the R word abound, coupons are resurgent but their route to the consumer is changing. Some time back, I worked in the Directory business. Our core product was print and we were constantly battling against a rising internet tide.

Instead of building boats, we were trying to build dams and continually sought ‘hooks’ to get households pick up the print edition. One of the enticements that worked particularly well was a section of printed coupons. Testimony to their success was the fact that renewal of the coupon business was near 100%. So the advertisers were getting a satisfactory return on the investment, enough for them renew their contracts year on year.

But there was something very ‘lick and stick’ about them, even stigmatised. I remember one potential advertiser (“potential” here is a euphemism for “he didn’t sign up”) referring to them dismissively as ‘butter vouchers’- an unveiled reference to that fact that certain welfare recipients receive the said same as part of their benefit entitlements. It’s that attitude, both spoken and more often unspoken, that I think limited the coupon as a valuable promotional vehicle in Ireland. In the same frame of mind and also belittling the coupon,

In an article earlier this year, The Sun asked one of its reporters to be a “voucher vulture” for a week. Whilst we have been slow, if not completely reticent about using coupons, it’s not the case Stateside where coupon redemption is part of the shopping fabric. Surveys show that nationally, 27% of the American population use coupons once a week or more and it on the rise. Households with dependent children are the big users as are women. Groceries top the coupon redemption list followed by beauty, healthcare and fast food.

The Sunday newspaper was the first stop for American coupons clippers. But, over the past few years that hold has been loosened but the internet “click ‘n save” sites. Research has shown that in 2002 the internet vehicle accounted for 4% of coupons distributed and Sunday Newspapers accounted for 35%. The comparison now is that  newspapers deliver 29% now and the Internet 12%. The Online coupon business is rocketing and is fast eroding into the tradition print medium as the coupons route to market.

Once printed off the coupons are used in the same way as the traditional newspaper coupons. The internet coupon appears to bring a different demographic into play, with clickers having a younger profile to clippers. A Survey showed (and remember, these are USA statistics and we are nowhere near these usage levels) that 68% of 18-24 yrs old used coupons, 51% of those getting their coupons from the internet. The reverse is true in the older age groups, the majority of them getting coupons for the traditional print media.

Point and click wins out over ‘lick and stick’ with the under 35’s according to research by Simmons/Experian Research where this age group would use internet coupons quicker than traditional newspaper or book voucher ones. They estimate that there were 35 million internet coupons users in 2008, four times as many as there was in 2004 and www.coupons.com say that $54m worth of coupons were printed off in March 2009 alone, up 192% year on year. With those levels of growth, as a promotional tool they would be it’s hard to ignore. The online model is quiet sophisticated with shoppers having to download coupon software onto their machines first in order to avail of offers.

The software ensures that the coupon is only printed once and the brand owner can cap their exposure by limiting the number of downloads on a particular product. Starbucks learned the control lesson early when they got it completely wrong: In a random act of kindness, they emailed a voucher for a free Grande iced coffee to certain employees and encouraged them to pass on the voucher to “friends and family”.

The business owners apparently thought that those employees, en mass, came from small families and they had an even smaller circle of friends. It turns out, in fact, that each one of the selected employees was raised in a shoe! The email went viral and was passed to all and sundry. Queues began forming (foaming) outside stores to avail of the generous ‘family and friends’ offer. Facing huge demand and costs, Starbucks had to cancel the offer one month before its expiry leading to a good deal of negative publicity and a bizarre lawsuit. Coupons do drive business and experimentation. A SmartShop survey found that some 55% of female coupon clippers bought a different brand than usual because of a coupon offer. If you are signed into Google Local Business Centre (and if you are an SME you really should be) then you can avail of the facility to have a coupon appear alongside your business listing on Google Maps. Making the coupon is very straight forward and will be beside your listing in a few hours. If you feel that it could be a way to stimulate business, give it a try.

Searching localised searching is a small but growing sector here, so don’t rely too heavily on this format.Before you get dive into a coupon campaign keep in mind a few points. The work/won’t work factor will depend on many factors:

1. Value: the offer or indeed, the perceived value of the offer has to be a compelling reason to use it.
2. Timing; seasonality (no Chock Ices in January) has to be taken into account as does the expiry range – to short may kill the redemption and too long leads to a ‘long finger syndrome’.
3. Requirement: what does the consumer have to do to be entitled to redeem the voucher. There’s no point is asking them to spend an inordinate amount of money to redeem something trivial in comparison
4. Creative: too much clutter or indeed too many offers will confuse and kill the redemption rates.

Finally be fully cognisant of this important fact: A study found that 22% of consumers are self-conscious about redeeming coupons. You have to ensure that you don’t marginalise or stigmatise your customers who want to redeem coupons. American consumers have stated that they were made feel inferior by retail staff when they went to redeem coupons and that’s a quick way to lose custom. We are trying to get away from the escaped advertisers expression of the ‘butter vouchers’. Finally, on a security note, make sure you have looked at all the angles in the redemption look specifically at where any money you are due could “leak” from.