Monday, December 10, 2007

Christmas Coupon Concepts

Being the holiday season and with all the enticements to spend more than the wallet allows, just what exactly prompts a customer to redeem coupons? And, should your company even bother with this type of promotion?

Time and value are the two most imporant variables to consider when looking to predict coupon redemption. Value has been relatively stable in recent years with low inflation rates while the trend has been to cut expiration lengths creating a greater sense of urgency (always a good thing).

However, many false notions about a couponing strategy faily to acknowledge that the redemption is less immediate, due to people's busier lifestyles, more dual incomes, and expanded home inventories (due to more closet/garage/pantry space). The following are a few myths:

1. MYTH: Targeting the most loyal users of a competitor's product yields the best return on a coupon program. FACT: Light to moderately loyal competitive users are more likely to try a new product.

2. MYTH: The presence of a sample is a requisite for driving high redemption rates. FACT: Other factors are much more likely to drive redemptions like expiration date, value, current versus competitive user, and frequent versus infrequent coupon user.

3. MYTH: Current and competitive product users need the same coupon value to be motivated. FACT: In any product sector, current users typically require a much less offer value to drive them to purchase.

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