The Redemption Sweet Spot
The key learnings from this analysis indicate that much of the conventional wisdom about couponing is wrong. Many false notions fail to acknowledge that the redemption of targeted coupons is now less immediate, due to people’s busier lifestyles, more dual incomes and expanded home inventories.
The shifting consumer model demands that couponing approaches also change, or redemption rates will suffer. The following are seven couponing myths and subsequent facts that emerged from the study:
Myth #1: Store-brand users aren’t worth pursuing with target coupon offers.
Fact: As store brands upgrade their quality, fewer store-brand consumers will be price-centric, and more will be quality- and feature-conscious. They’ll often redeem targeted offers at rates as high as those of other competitive users.
Myth #2: 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 and will do so on a lower-value coupon offer.
Myth #3: The presence of a sample is a requisite for driving high redemption rates.
Fact: There are other factors much more likely to drive redemption rates. Some of those include expiration, value, current versus competitive user, and frequent versus infrequent coupon user.
Myth #4: The current users of a product don’t need long expirations to get them to redeem a coupon offer.
Fact: To gain more than two-thirds of potential redemptions—even with current users of your product—offers must be valid for six months at a minimum, and in the 10- to 12-month range for personal care categories like skin and beauty products.
Myth #5: Coupon clutter is pervasive in all delivery strategies.
Fact: Escalated volume is not a factor in targeted coupons mailed directly to homes. Notably, targeted promotion redemption rates are up in this sector for household products and pet products.