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Coupons: A story of redemption

Coupons: A story of redemption Steven Boal

The rise of interactive marketing has been incredibly quick and continues at a pace that keeps brands, marketers and media properties on their toes. With consumers spending more time online, marketers are redirecting serious dollars online, where more and more shoppers get news, entertainment and make their shopping decisions. Interactive is an essential piece of most marketing budgets.

Consumer packaged goods (CPGs) marketers are finding even their core buyers are spending more time online and making shopping decisions based on web research. They also realize the incredible sales potential in word-of-mouth marketing created by the more than 25 million internet users considered influential in recommending products to others [eMarketer, June 2007].

The challenge for these brands is how to close the loop from engagement to action and gain real insight into the impact their online advertising and promotions are having on in-store sales.

Where money is being spent in interactive
CPGs and other leading brands are leveraging a variety of methods of interactive marketing, including increasingly robust brand websites, rich media and video ads, email marketing campaigns, and much more.

However, since only 10 percent of shoppers purchase online (and even fewer purchase grocery products), it's difficult to track return, whatever the goal.

Promotions, as distinct from brand advertising, often provide more measurable impact and are proving popular with online audiences and have resulted in robust consumer participation. Coca-Cola, for example, is currently running the highly successful MyCokeRewards program, with on-pack codes driving traffic to the promotional website where points can be exchanged for rewards.

One way Coke has "closed the loop" with these highly engaged consumers is by offering printable coupons in exchange for the reward points, bringing them back full circle into the store and giving Coca-Cola the ability to measure impact on sales.

Similarly, Pharmavite LLC, the parent company of Nature Made vitamins and SOYJOY nutrition bars, generates awareness, sales and brand loyalty through an integrated couponing program, where each element supports another. Emails to its database of 1.3 million subscribers often include links to the $5 worth of printable coupons (powered by Coupons, Inc. technology) on NatureMade.com. There, consumers can also join a rewards program, with cumulative points building toward a single, high-value coupon mailed to the participant.

In addition, coupons in the Sunday newspaper’s freestanding insert (FSI) include promotional verbiage driving coupon-hungry consumers to the website to print additional coupons.

Sheryl Biesman, manager of integrated marketing for the Nature Made Wellness Advisor, the online division of Pharmavite, sees printable coupons as an incentive to encourage people to register, which in turn builds the opt-in database.

"A robust, highly-qualified database is the key to successful retention marketing," she says.

Next: Adding interactive impact

Return to page 1

Printable coupons add impact at multiple levels of interactive marketing.  They:

  • Monetize reach

  • Apply a traceable action to each interactive touch-point

  • Are a physical reminder from online engagement that affects offline behavior

Brands spend $6.6 billion annually on coupons, and they are shifting larger percentages of those budgets online in connection with their interactive campaigns. The reason is simple: They easily integrate into existing campaigns and offer precise tracking.

CPGs have been among the slowest brands to transition into interactive because historically it has been difficult to see tangible results regarding how online promotions and advertising impact offline sales. Though time spent on a brand site and other levels of engagement may heighten brand awareness, the tactics of engagement marketing are still evolving, all with the end goal of being able to quantify the impact on actual behavior.

Coupons are the perfect model for closing the engagement loop, allowing tracking at various touch-points that helps prove online advertising and promotions impact offline consumer behavior.

A case study
Truly, coupons are a story of redemption. Recently, one of the top five newspaper freestanding insert-spending CPG companies wanted to drive incremental in-store sales and maintain consumer loyalty for one of their personal care brands. They employed interactive tactics, including online coupon distribution through a Digital FSI, and also coupon-enabling outbound emails.

Redemption rates were 13 percent on the emails and were higher than expected on the Digital FSI at 12.5 percent. Typically, newspaper FSI coupons see redemption rates below 1 percent.

In addition, with limits set on clicks and prints, the redeemed coupons reflect actual product moving off store shelves across a broad base of consumers who typically do not get coupons from the Sunday newspaper. The purchases can be quantified by region, store and even more granularly, based on the brand's need.

Engagement equals intent to purchase
The definition of "engagement" online and how it applies to marketing impact is in a constant state of flux. In the case of printable coupons, however, engagement has a clear result: intent-to-purchase. Since printable coupons are printed on-demand by consumers, their selection and print of that coupon represents purchase consideration and intent. Coupon redemption is by definition a purchase. With tracking to in-store behavior, the engagement loop is closed.

In addition, online promotions provide a series of touch-points where brands can engage consumers:

  • View. First, the customer views the offer, whether through a link from an email, directly on the brand's website, in the context of a recipe, et cetera.

  • Print. Demonstrating intent-to-purchase, the customer prints a coupon, which includes all the tracking necessary to associate that action with the ultimate purchase.

  • Forward. Who doesn't love a bargain? Consumers often invite friends to the promotion to print their own coupons, resulting in higher ROIs for a program and valuable data about influential consumers.

  • Purchase. The end goal of all brands is to impact sales and revenue, and the redemption of a printable coupon indicates that an online promotion has succeeded. 

A major pharmaceutical company recently saw 0.17 percent clickthrough rate from their coupon-enabled banner running on a coupons website, and more than 8 percent of the consumers who clicked also registered and printed their coupon, making online coupons the company's strongest performer for conversion.

Other brands have taken online engagement beyond simple graphics and text. The web allows brands to mix media, integrating video with printable coupons. This method demonstrates how more engaging media can result in a higher rate of return. When customers watch a 15-second branded video before gaining access to a particular coupon, print and redemption rates more than double the average for printable coupons. Brands can increase recall and also highlight new or unique uses for a particular product in a more engaging way than words alone can communicate.

Liquid Plumr successfully employed the method with a quick video spot highlighting the extended uses of one of its core products. The video resulted in tens of thousands of coupon prints and provided the company with a high level of engagement/branding value. Consumers had to watch the video before they printed the coupon.

Next: Turning interactive campaigns into real-world sales

Steven Boal is chairman and CEO of Coupons, Inc. A former Wall Street and technology executive, Boal founded Coupons, Inc. in 1998 after watching his father in law clip coupons from the Sunday paper.  Coupons, Inc. is the leading U.S. provider...

View full biography


to leave comments.

Commenter: David Belle-Isle

2009, June 15

The value of customer loyalty has a profound impact on recurring revenue and cost of sales.
The next challenge is building connections between loyal customers, enabling them to share positive experiences related to a product or service they love.
These customer communities then become the marketing and sales content creators.
And the fly wheel spins.

Commenter: Diane Dragone

2007, September 25

Very interesting. Want to try some of these ideas.