The Lowly Coupon: Hot Potato, Reminder, Offer and Contract
“The paper coupon is the single most inefficient marketing tool you could imagine … The traditional paper coupon is going to die. It can’t survive in the Internet world.”
—Peter Sealey, marketing consultant, Sausalito, California
Apparently Terry J. Lundgren bought into this cockamamie pronouncement which was reinforced by his own research—that Macy’s customers did not like couponing, that it is complicated and confusing, and that they did not know what the exact price was.
“Mr. Lundgren said the new chain, with 800 stores and $27 billion in sales, would be big enough to secure exclusive product lines from big names—as it did, with Elie Tahari and Martha Stewart,” wrote Michael Barbaro in The New York Times, “then blanket the country with advertisements to let shoppers know about it.”
After cutting back on coupons, sales at Macy’s tanked all across the country and the stock plummeted 40%.
The “Paperless World” of the Internet
One of the most fascinating, charismatic characters in the great dot-com boom was the founder of Priceline.com, Jay Walker, wiry, ebullient with black hair and bushy black eyebrows—a master entrepreneur who was so persuasive that he could sell Viagra to a eunuch.
In December 1998 Jay had been Target Marketing magazine’s Direct Marketer of the Year, and the following May he received the same honor from Direct Marketing Days New York (DMDNY). On Wednesday, May 26, 1999, at a luncheon in the grand ballroom of the New York Hilton, Jay delivered a stem-winder of a speech to the 2,000 attendees. As described by David Shepard in the July issue of Direct magazine:
Priceline.com founder Jay Walker stunned an audience at Direct Marketing Days in New York this spring by describing a new D[irect] M[arketing] business model—one with close to zero printing, production, postage, lettershop and customer service costs. The message from DMDNY’s direct marketer of the year was clear: Welcome to DM over the Web.