October 10, 2010

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Online Couponing is UP 49% If you think only little old ladies clip and use coupons; think again. But if you think that the recession has recruited and empowered a new generation of savvy coupon seekers and users; you just might be right. According to a new survey from RetailMeNot a leading personalized coupon distributor and data from Coupons.com, 80 million people saved $57.4 million using 1.6 million printable and downloadable coupons from 66,883 retailers during the last six months – January-June 2010. Socially driven services like Groupon are adding fuel to this fire which generated $192 million in retail sales, an increase of 49% over the same period in 2009. Consumers saved an average of $29 per online coupon and $5 per printable coupon. There seems to be variations in which stores or retailers used these coupon formats. Online coupons generally seem to have higher face values than their printable counterparts. But customers are not only eager for the savings, the actively seek out coupons and deals from online merchants. The top 10 most searched are Victoria’s Secret, Amazon, Kohl’s, JC Penney, Dominos, Macy’s, Enterprise, Old Navy, Pap John’s and Best Buy. Other hot brands include IHOP, KFC, Subway and DQ. Maybe there’s something about Midwestern thrift (5 of the top 10 zip codes of printable coupon users are in Midwestern states) or something about getting over on leading chain retailers, but consumers seem to be looking for ways to reduce necessarily and recurring expenses. Food, pizza, restaurant dining, clothing, haircuts, car washes, gas and oil changes top the list of printable coupon categories. Coming soon are more, easier to use mobile coupons and codes that will be distributed digitally and will eventually rely on electronic interactions between hand units and POS systems. Brands are already distributing online and printable coupons using Facebook, Twitter and selected blogs. Expect this trend to accelerate as we approach a holiday season where the forecasts for growth are iffy. Here are 3 tips to insure your success in using online coupons: 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. 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 lapsed; the less likelihood of redemption. Do the Backend First. Don’t even begin the coupon game until you’ve road tested the underlying technology. Make sure that POS, credit card processing, shopping carts and accounting systems can accept, process and fulfill their wishes
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What's Holding Social Media Back? Speed, sensibilities and value for money are becoming the success criteria and/or the gating factors for launching social media campaigns. Consider this real-life example. Last spring, a client wanted to jump on a pop culture craze to promote one of his marquee products. He reasoned that this promotional item would not only capture the moment but also incent Moms and kids to buy his well-known product. He would offer these of-the-moment items along with a discount coupon during a 4-week back-to-school window during August and September in return for “Like” clicks on Facebook or to reward new followers on Twitter. An appropriate supply of items cost about $10,000. Developing landing pages and a dedicated Facebook tab would double that cost and fulfillment would add another $20,000 to the budget. He planned to promote the offer by alerting his 1MM Facebook friends and by pinging his 2 million-name e-mail house list and to supplement the effort by buying ads on Facebook worth another $25,000. All in the promotion would cost $70,000. He forecast a response based on his previous promotional campaigns that included 8.1 million gross impressions and 125,579 click-thrus that would potentially add 84,000 new fans for his brand. But it was tough to turn these numbers into a compelling business case. Anxious about the business value of a “like” and responsible for demonstrating ROI, the client balked. A new global Facebook Brands Survey from DDB Opinionway , based on answers from 1600 Facebook users, suggests that 47% of fans regularly buy from the brands they follow and another 37% buy occasionally. Thirty-six percent of fan responders say that they want to buy more from the brands they follow. This self-reported data can be spun either way – almost half of fans are customers or less than half of fans are regular customers. If he had to buy the earned impressions at his usual ad rates the cost would be $56,700. Spending $70,000 to earn back $56,700 was a loser. If he valued potential new friends using the widely reported figure of $3 per friend, his yield would be $252,000 or a 3.6:1 return. But he doubted this value and was uncertain about how many of his friends were actually paying customers or likely to become paying customers. He never made the move. But his experience suggests five useful lessons: Decide if your campaign should yield a direct response or contribute to creating a brand impression from the outset. This decision will drive the terns of measurement, help you determine urgency and prioritize your spending. If you want to capture the moment or ride the wave of a popular idea; move fast. By the time he worked this out in his head, he missed his window of opportunity. Try to figure out the overlap between friends and customers. Understanding this relationship will cue you about what to say, what to offer and what to spend in social media. Make your own valuation. Use average response rates and average purchase amounts to calculate the potential value of a fan or a friend. It will be a swag that is unique to your brand, but the number can guide you in terms of the time, effort and money invested in social media activities. Start with the hypothesis that friends are potential if not existing customers. Ask yourself what are you willing to invest to either add new friends or convert existing ones into customers.

Danny Flamberg

I am a veteran marketing consultant working with leading and emerging brands

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