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What do you want to ride?

Customers who use coupons

Here in Florida within the past couple of years, the various amusement parks have been in competition with each other in their efforts to attract visitors. With each of their television and radio advertisements, they have worked to promote new rides they have added to their park.

The similarity with each of their efforts is that they have promoted one ride - their new roller coaster.  All types of roller coasters; single rail, multi rail, overhead hung, and even old style wooden roller coasters.

To the contrary, you do not see any of the amusement parks promoting a merry go round or other ride which is of the non- thrilling type.  I think this is because customers always look for excitement. Perhaps it is because their work in life leaves a void within them, and an amusement park allows that spot to be filled. (That's a whole topic unto itself)

The question about excitement leads us to ask the question about customers deciding to shop in our store and the methods we utilize to attract them.

Not being one of the price sensitive customers, I was very surprised when I found out that 82% of the shoppers in our country use coupons. I know with our local newspaper, there are enough coupons each Sunday to provide enough paper to line the bottom of a bird cage for at least a month.

While I don't have a pet bird, I really thought that only the lower income shopper, or the customer who only bought things on sale were the ones using coupons. And with our business, these were two groups of shoppers that I made absolutely no effort to romance to come into our store.

Well, the second shock came when I found out that 77% of the coupon shoppers are in the middle income or above category. Ah, now we are talking about the customer that I want to talk to. And, the ones I want to spend my advertising dollars inviting to come into our store.

So in preparation for this article, I begin to study coupons. Those that were in newspapers, direct mail pieces, coupon books, and even those that were of different formats: electronic newsletters, television and radio ads. In a nutshell, my findings were this: most coupons are boring.

They lacked in creativity, and especially they lacked in what they were offering. Many of the coupons were nothing more than last week's sale price restated in a different format. Somehow we were expecting the customer to think that the dotted box around the picture and price made the offering into something new and special.

Most businesses followed an old, and worn out format. For example, restaurants seemed to always offer a "get an entree free with the purchase of another entree of equal or higher price. When this coupon was first offered at the Stonehenge Cafe a few thousand years ago, it was original. But today, it simply says, "Hey, we will give you 25% off your dinner when there are two of you. But we are going to make it up with the drinks, desserts, and if there are three of you the offer only applies to the first two."

The problem with this is when you create a coupon and get a total of 10 customers responding, the newspaper sales representative is going to do their best to convince you that you should be happy with this response as this is the traditional response.

The situation is made worse when we throw in the statistic that indicates over 80% of consumers think there is no difference from one retail business to the next. No wonder our traditional coupon is setting us up for failure.

Back to the roller coaster ride; if we want to be a part of the different retailers, if we want to receive a response rate that is well above the normal return, and if we want to be the roller coaster instead of the merry go round, then we need to do something different.

I observed a retailer recently who understands this principal. They begin by understanding that with most businesses the biggest expense is the advertisement itself as compared to the biggest expense being the discounted price.

The point from this retailer is that they would rather have customers who had saved $1,000 through an advertisement that had cost the merchant some $200, than to have it be the other way around.

They created a coupon book. It had an attractive cover with a notation that the coupon book could be purchased for $5. To sell the coupon book, this retailer went to local schools and offered the coupon book to the school at no cost. The schools kept 100% from each of the coupon book sales. Collectively, the schools pocketed approximately $1,300 from the 250 plus coupon books they sold.

The first page of the coupon book was a ticket good for an admission to their after hours sale.  The next five pages were each a coupon good for a $5 discount on any purchase.

The coupon had no other stipulations to it. The last page was for the consumer to give their name, address and phone number so that they could enter in a contest to win a free cruise -a prize which was given to the store by a local radio station as a part of the advertising package they purchased.

At this point, many of you would look at this and say it can't work. Because some customers are going to walk in with four more members of their family. Each person will take one of the coupons, select an item that is priced slightly higher than five dollars, pay those few cents and walk out.

Absolutely yes! Someone can do that, and probably a few did just that.  But what this daring and adventuresome retailer found that with this sale, their average ticket was $65. Of course, a retailer reading this article could try this promotion and not achieve these amazing results. They could have lots of customers who come in and work to "beat the system".

Then again, another retailer could experience sales that exceeded the example average ticket. And a retailer could do this with a church affiliated school and as a result, gain the business of that particular school and church for their worship supplies.

It could be a wild and exciting experience. But you will never know if you decide to get on the "merry go round" with your coupons and sales. And if you create the "roller coaster" coupon and sales, you may find there are a lot of those folks walking in your door, just like they do at the amusement parks in Florida. 

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This article is copyrighted by Tom Shay and Profits Plus Solutions, who can be reached at: PO Box 1577, St. Petersburg, Fl. 33731. Phone 727-464-2182. It may be printed for an individual to read, but not duplicated or distributed without expressed written consent of the copyright owner.

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Profits Plus Solutions, Inc.
PO Box 1577
St. Petersburg, Fl 33731
(727) 464-2182
Fax: (727) 898-3179