Apr 2, 2007

Debate: Are Paper Coupons History?

99 percent of coupons are never used. Some people feel that coupons are the single most inefficient marketing tool you could imagine. Are paper coupons history?

Since one of the features of Welcome’s payment software is to print targeted coupons at the bottom of credit or debit card receipts, we sometimes get pulled into this debate. Retail marketing executives don’t usually question the value of coupons, but banking executives are not as familiar with promotional marketing techniques and often show a deep desire to eliminate paper coupons. They shouldn’t. Here’s why.

Last year, RetailWire ran a piece called, “Are Paper Coupons History?” and invited marketing executives to give their opinions. There are less than a handful of negative comments. Unlike one executive’s strident cry that “the traditional paper coupon is going to die”, you will find that the vast majority of comments are balanced, subtle and generally positive.

Take the following comment for example:

“It doesn't matter if paper is an old technology and it doesn't matter that coupons are distributed electronically, too. Marketers use coupons because they help induce people to try their brands. When the coupon offer is compelling, great results are achieved. The fact that well over 99% of all coupons become trash doesn't matter when that figure is compared to the effectiveness of the alternatives. Well over 99% of all ad impressions (radio, TV, newspaper, magazines, billboards, table tents, signage, press releases, skywriting, package inserts, public transit posters, blogs, spam, online banners) don't induce people to buy.”

Welcome’s payment technology also supports e-coupons stored in a credit or debit card’s chip, essentially eliminating the need for a paper coupon. That sounds good, right? The best of both worlds, right? Not always. In fact, not very often. I will explain in another post why I would almost always prefer a simple paper coupon.


Lee said...

Paper is great for one simple reason -- consumer inertia. It will take decades to modify coupon clipper's behavior.

One issue I see is the lack of relevance of the coupon's generated even at point of sales and the interest of the shopper.

Brand recidivism is high. Marketers need to be more creative in presenting the promotional opportunity rather than just a price discount for another brand in the same category.

xentrix said...

For me to take the time to look through the coupon book/magazine, cut it out, organize my coupons, trash expired ones and plan my purchases in advance.....I had better be getting a significant discount on the product! Saving just 50 cents on a product just doesn't cut it. I really liked the automatic coupon dispensers in the store aisles. Those were so convenient and "red flagged" the discount items. They bypassed alot of the inconveniences of paper coupons.

Now, if you constantly go to let's say Walmart for your grocery shopping....they should issue you a customer card/account that would track your typical purchases. Then, they would alert you if any of those items have a coupon discount when you arrive at the store. And/or the system can recommend similar products to the one's you already use.....and give you an incentive to try it (price discount).