Emerging Platforms

5 Rules for Online Coupons

Posted by Daniel Flamberg on July 21st, 2010 at 2:04 pm

The Internet is a significant distribution device for coupons and promotional offers.8.6 million US households claim to regularly use online coupons while use of printable coupons downloaded from the web is growing at a triple digit rate.

The web has become a place for deals and a forum for shopping the deals, sharing deals and finding new deals. In the first half of 2009, 10 million digital coupons were distributed. Almost half of American women report that seeking out coupons is one of their leading activities online and central to their shopping experience. This occurs at a time when the coupon itself its morphing from printed paper to promotion codes and ultimately to mobile memes.

And although only 1.5 percent of all coupons are distributed digitally, 10-15 percent will be redeemed compared to an overall redemption rate of just 1.2 percent. Borrell Associates is forecasting that online coupon redemption rates will triple between now and 2014 accounting for $22 billion. They are calling couponing the first “killer app” for mobile media forecasting mobile coupon growth from $5 million in 2009 to $2.4 billion by 2013.

Large numbers of consumers say they will increase coupon use if relevant coupons are delivered to them online. This has spawned a number of innovative functionalities that enable consumers to set timing, frequency and category preferences, specify products or desired brands, zero-in on price or sizes and have e-mails or alerts delivered as offers are initiated or changed.

Look at some of these innovations at CouponCabin, RetailMeNot, Savings.com, Hot Coupon World, Coupons.com, Hey Its Free or Myzerr. Specialized, group and personalized offers are characteristics of Groupon, Jetsetter, Restaurant.com, PromotionalCodes and Sale it To Me. Or compare offerings at CouponScout.

The demographics are impressive, too. More than half of online coupon users are 25-44 and college educated. Mostly women, a third of whom have household incomes of $75,000 or more, they see finding and using coupons as part and parcel of the online shopping experience and many report that their interests in discounts represents a fundamental shift in shopping behavior that will persist even after the recession.

Maybe it’s the growth of coupon aggregators and distributors that are driving use. Three million Americans have registered with couponing sites and coupons are the subject of countless blogs and chat boards. So it’s a no-brainer for marketers to use this approach and these channels to better target and delight customers.

There are however five critical rules of the road.

Live in the Moment. Understand that coupons are entirely an emotional experience. Couponing is pure adrenalin. Everything you do and every message you send has to play into these familiar and expected emotions. Finding the brand or product deal sparks a serotonin rush. Getting the coupon creates a sense of accomplishment and anticipation. Applying or redeeming the offer yields a sense of success, accomplishment and satisfaction. Be conscious of the emotional rollercoaster you are on. Don’t let any part of your program prompt a boomerang of anger or frustration reaction. Remember that angry customers bitch loudly to more people more often. Focus on creating and maintaining a positive emotional state at each inflection point in the distribution-redemption cycle.

Be Clear and Simple. Online shoppers scan. They don’t read. Make the offer BIG and bold. Make the time frame easy to see. Specify qualifications, shipping costs and if the offer can be combined with others. Put the terms and conditions upfront in big type. There’s no time or emotional wiggle room for switch-and-bait tactics or a million exceptions or exclusions buried in the mouse type. Shoppers are empowered. In a few clicks an expectant-turned furious customer can rat you out on social networks, chat rooms or even to regulators.

Go Low Involvement. Don’t make customers download software to print coupons.. Offer PDFs and simple ways to print or store the coupon quickly. The more time that lapses; they less love you get and the likelihood of redemption decreases. Downloads prompt security notices from even simple firewall programs, which scare consumers away. Similarly if you want to reach working women, corporate firewalls make downloading coupon printing software impossible. This is an immediate gratification game. Any slight roadblock will drive customers to bail out.

Do the Backend First. Millions of coupon lovers are frustrated dally because something doesn’t track, scan or register. There’s nothing worse that an expectant customer who can’t buy because something mechanical isn’t working properly. Its time, money and effort flushed down the tubes. Don’t even begin the coupon game until you’ve road tested the underlying technology. Also think in terms of interoperability – customers don’t care about or even recognize the channel distinctions you do. They want deals that can be done online or off.  Make sure that POS, credit card processing, shopping carts and accounting systems can accept, process and fulfill their wishes.

Try New Channels. Facebook, Twitter, blogs, paid search and innovative distribution partnerships with content-rich or semantically optimized sites are areas for new creativity in couponing. Some brands are experimenting in these areas because they are fertile testing grounds to reach and measure your promotion against very discrete and highly targeted prospects. These are ready-made test-and-learn environments with low buy-ins and potentially monster returns. Play around with them, experiment and develop your own best practices.

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