The humble coupon has been given a bit of a makeover in the past few years. In much the same way mildly amusing photos are experiencing a renaissance as memes, coupons are coming back into fashion – with a bit of window dressing. Marketers are still sending customers discounts and add-ons, upgrades and freebies, but it’s all packaged a bit more elegantly. It’s a personalized offer. It’s targeted marketing. It’s contextual engagement.
But here’s what really matters: for all our fancy framing, consumers still dig coupons. Here’s why they work.
Coupons work because they make us feel good
Coupons aren’t part of the conversation everywhere; they’re probably not a feature at high-end fashion boutiques or luxury car dealerships. But for grocery, convenience and restaurant brands, they play a major role in securing repeat visits and building loyalty. A quick Google will show you exactly how big a deal coupons are in grocery alone.
That consumers like saving money surprises no one. Given the choice between identical items at drastically different price points, most of us will choose the cheaper one and feel pretty good about scoring a bargain. But coupons have a special magic.
To start with: coupons make people happy, on a hormonal level. A study from Claremont University found that subjects who received a $10 coupon had 38% higher oxytocin level than subjects who didn’t. They were generally happier, more relaxed and less anxious; apparently more so than if they’d received an actual gift. Want to make people fall in love with your brand? Coupons!
We feel good when we save money, but even better when we feel responsible for it. Coupons have a more marked effect than just buying something on special because we’ve gone to the effort of finding and redeeming the coupon to get the saving. And that positive feeling is even stronger when we think we’ve received something that’s somehow special – an offer nobody else received.
Regular coupon redeemers may get so hooked on this buzz that they continue to use coupons and redeem offers even if they’re paying more than the regular price. The act of couponing becomes more rewarding than actually saving money.
Yes, there’s more to it (and we’ll dive deeper in a coming article) but coupons have a place in verticals where purchases are frequent, and customers are price sensitive. If you can somehow make the shopping experience less of a chore and more magical and memorable, you’re going to build more engagement. You have to do it properly though.
Personalize offers based on past purchases, at a minimum
People like receiving offers based on what they’ve bought before: 76% feel personalizing discounts based on purchase history is important. You might have other data (demographics, location, weather) you can use to make marketing really personalized, but the important thing is that you make offers relevant. You want people to redeem their offers and feel good – and that’s more likely to happen if you show them that you know them. Then you can focus on ensuring repeat visits and building loyalty.
With the coupon renaissance well underway, what’s next for consumer marketing? For all the talk of chatbots and checkout free shopping, are there other old-school marketing strategies that are ripe for an overhaul? And if so, where are we going to see the first move?