Consumers' desire to find value has intensified in recent months because of rising prices for everyday purchases. A marketer's solution to meet the need for greater value? The time-tested approach of offering coupons. Using coupons as a purchase incentive is a way to add value yet not have to lower prices across the board. Only those persons who perceive the effort required to obtain coupons will use them. Also, in theory a coupon stimulates a purchase that could lead to repeat purchases in the future without a coupon offer.
A recent study by Prospectiv found that coupons are being sought frequently by consumers today. More than 70% of the people surveyed indicated they are using coupons more than they did six months ago. A finding that should be of interest to retailers is that 87% said they would be more likely to patronize a retailer that offers coupons. In an environment where many retailers are very similar to their competitors in terms of products offered, prices, and services, it appears that a tactic as simple as offering customers incentives via coupons could lure more traffic to stores.
Couponing provides one hazard that must be closely monitored: too much emphasis on coupon offers could create a trap in which customers become conditioned to make purchases only when there is an incentive. This situation hurts profitability and creates less predictable demand. The ideal is to build a brand on the benefits it delivers so that price is not a major criterion in the buying decision. That ideal must be balanced with the reality that consumers are pinched financially and may view a coupon as a reward or benefit of their patronage. The desire for incentives makes the use of loyalty programs more important as they can be designed to keep customers coming back to you, not your competitors!
Link: Brandweek.com - "Majority of Consumers Using More Coupons"
Labels: Sales Promotion