The Lowly Coupon: Hot Potato, Reminder, Offer and Contract
Jay’s message was not happy news for printers, paper salesmen, list owners, proprietors of lettershops and the folks at Pitney Bowes. At the conclusion of his talk, the entire audience was ready to slash its collective wrists.
Jay was dead wrong. With Can-Spam and Do-Not-Call legislation, direct mail is once again the workhorse of direct marketing. Jay lost several hundred million dollars in a wacko scheme called WebHouse Club that would enable shoppers to bid on grocery items and pick them up at their local supermarket. Priceline.com stock went from $16 to $166 before closing at the end of 2000 at $1.31 with Walker out on his ear.
The Internet is wonderful in many ways, but it will not replace the use of paper in marketing. Although retailers detest coupons, they will be with us for a long time to come. Here’s why:
* Coupons that arrive in the mail or printed in the newspaper are what direct marketing guru Walter Weintz called “hot potatoes”—attention-getters that force the consumer to act.
* The three legs of the direct marketing stool are lists (40%), the offer (40%) and everything else (20%). Coupons make an offer. If a family has a baby in diapers and receives a coupon offering Huggies at $1.00 off—either in the newspaper or via direct mail—here’s what happens:
• The coupon conveniently arrives in the home.
• It is a physical reminder to buy diapers.
• It has perceived value.
• The coupon saves money.
• It is the contract—the guarantee that the 25% discount will be honored.
Coupons sent over the Internet make the consumer work. As Bob Tedeschi wrote in The New York Times last February:
ONLINE coupons have always been a bargain-hunter’s diversion, which may be precisely why the market has grown so slowly. Who wants to take time out of the day to track down sites that give away 50-cent discounts, then search for eligible products that they might need?