Category: Offer Development

Go interactive with local ads and offers

Visit your favorite big box or grocery store online to find special offers available at your nearest stores and print coupons to use during your next visit. Simply type in your ZIP code and you have the same deals from the free-standing inserts (FSIs) found in your Sunday paper.

Now for the fun part: We’ve launched a turn-key solution for creating electronic FSIs that attract customers to local retail stores or to your site. We’re not talking about just uploading a PDF. We’re talking about creating elegant, interactive environments to advertise multiple products, complete with 360-degree product views and videos to highlight specific features. Customers can print coupons, save products to a wish list, and email themselves both to use later. We make it easy to update text and images, too. To learn more about the eFSI and to arrange a demo, email business@solutionset.com

As coupon use rises, so does opportunity for loyalty

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The barometer for consumer spending attitudes might be tucked away in your wallet or purse right now. Sandra M. Jones of the Chicago Tribune reported that Americans have rediscovered coupons in 2009, with a projected 3.2 billion redemptions. That represents a 20 percent jump from 2008 and the first year-over-year increase since 1992.

While newspaper circulars account for 90 percent of the coupons distributed and more than half of those redeemed, the web is quickly becoming the next frontier for spendthrift consumers. From the article:

Searches on Google for “printable coupons” and “online printable coupons” more than doubled this year, and Yahoo, Inc. reported that “coupons” ranked first on its list of economy-related searches for 2009. Of consumers surveyed by the National Retail Federation, 42 percent said they plan to use a coupon for their holiday shopping.

At Coupons.com, one of the first and largest online coupon sites, consumers printed coupons worth $313 million in 2008. The site surpassed the 2008 annual figure in June 2009 and expects a total of $1 billion in printed coupon savings by the end of the year.

It doesn’t take much head scratching to figure out why coupons have become all the rage. But what retailers and manufacturers should learn from this trend is that 2010 might be the perfect year to readdress customer loyalty programs.

Are your print and in-store promotions prompting customers to sign up for email and mobile marketing streams? Have these segments been rewarded with a measured flow of value-first content?

Ultimately you want your customers to have category tunnel vision, where it’s your products or bust. And a strong loyalty program could help get you to this point.

One parting thought: If a third-party site is the primary source for your coupons, why not create (and promote!) a dedicated coupon corner on your own site? Keeps them that much closer to the point of purchase.

Let Them Eat Potatoes: A Brief History of Tuber Marketing in 18th Century Europe

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French fries. Gnocchi. Kugel. Pierogi. Europeans love them some potato. But it wasn’t long ago when this Peruvian import was viewed as hog feed that caused leprosy in humans.

This all changed thanks to research and savvy marketing by the French scientist Antoine-Augustin Parmentier. It was the mid-18th century and Parmentier was serving as an army pharmacist in the Seven Years’ War. The Prussians captured the big thinker and forced him to eat potatoes. He survived (with all limbs and digits intact) and returned to France determined to promote the potato as a viable food source.

Parmentier conducted experiments that proved potatoes were nourishing and helped cure dysenteric patients. He was showered with praises and awards from the scientific community. The French Parliament even lifted the national ban on potato cultivation. Yet his countrymen couldn’t seem to shake the hog feed stigma and continued in their non-potato eating ways.

When support from the government and academia failed his efforts, Parmentier turned to marketing. He hosted dinners for dignitaries (including Benjamin Franklin) with potato dishes proudly served. He delivered beautiful bouquets of potato blossoms to the King and Queen. But perhaps his most ingenious tactic was placing guards around his potato patch with explicit instructions to accept all bribes and look the other way when people tried to steal the crop.

Parmentier understood the basic human condition and marketed against our weaknesses. He sought celebrity endorsements, influenced the influencers, and created a high perceived value among consumers. After the potato saved France from famine in 1785 and 1795, the hearty tuber officially made the jump from feared to revered.

So the next time you order steak frites, take a moment to thank Monsieur Parmentier.

[Source: Wikipedia]

The problem with free

Free operating systems. Free content. Free apps. Free email. Free hosting. In an article published on Fast Company, author Farhad Manjoo questions the merits of the business model that dominates the web:

Why? Because free costs too much, weighed down with hassles that you’ll happily pay a little to do without. That’s why people buy bottled water and cable TV. That’s also the model that The Wall Street Journal uses to goad people into paying for news online. Anyone can read its stories for free through Google or a news-aggregation site like Digg, but people who want the full newspaper experience pay $103 a year for the privilege. More than a million subscribers consider that a good deal.

Manjoo notes customers understand that responsibility for product quality is only truly passed when money changes hands. If a free iPhone app is busted, you’re not too terribly surprised and will just delete it. If a $4.99 app is busted, you’re ready to write an angry letter. It’s all about expectations. If you can justify a cost with a promise of quality and support, then why mingle with the businesses in the free pool that can’t? Read the full article.

How KFC clucked up their giveaway

KFC wanted America to focus off the fryers and sample their new grilled chicken. An “Unthink KFC” TV campaign aired. Restaurant signage was hung. And then they brought in Oprah (aka the grand hen of promotion) to announce this finger-licking offer: Two free pieces of grilled chicken, two sides and a biscuit to anyone who downloaded a coupon within a two-day period. Emily Bryson York of Ad Age gives a chronology of how this offer spun out of control:

KFC’s offer sent the chain skyrocketing to the No. 1 topic on Twitter. By Wednesday, blogs began reporting “riots” at New York City KFCs. On Thursday, local news crews interviewed fuming customers getting turned away in other markets, including Chicago. Consumers complained about rude service, and media complained about a PR team that seemed asleep at the wheel. By Friday, the day after KFC pulled the promotion.

Big giveaways don’t always crash and burn. Denny’s announced a free Grand Slam breakfast promotion during the Super Bowl and came out big winners. Bryson York chatted with John Dillon, VP of marketing at Denny’s, about the right way to hold an orderly giveaway:

Communicate, communicate and then communicate some more: Denny’s executives toured the restaurant system, talking to franchisees and staff about the coming promotion. They also held town-hall meetings to share ideas.

Energize the staff. Happy front-of-the-house folks are a critical component to a positive guest experience. Denny’s goosed enthusiasm among wait staff with its first-ever Super Bowl ad.

Keep it simple. Make the offer clear and easy to understand. Hold it on one day and within a set timeframe. And make sure it supports an overarching brand strategy.

Pray for the best but prepare for the worst. “We did as much modeling as we could to plan through different scenarios,” Mr. Dillon said. “But at the end of the day, you don’t know what to expect.” Before the event, Denny’s shipped thousands of rain-check coupons to its restaurants, just in case.

Don’t hurry, or don’t do it. Denny’s planned its giveaway months in advance, and it took different forms throughout the process. But the planning paid off. “We heard of a couple of restaurants that ran out of syrup,” he said.

Giveaways are an excellent way to get buzz and foot traffic. Just be prepared for both.

How KFC clucked up their giveaway

KFC wanted America to focus off the fryers and sample their new grilled chicken. An “Unthink KFC” TV campaign aired. Restaurant signage was hung. And then they brought in Oprah (aka the grand hen of promotion) to announce this finger-licking offer: Two free pieces of grilled chicken, two sides and a biscuit to anyone who downloaded a coupon within a two-day period. Emily Bryson York of Ad Age gives a chronology of how this offer spun out of control:

KFC’s offer sent the chain skyrocketing to the No. 1 topic on Twitter. By Wednesday, blogs began reporting “riots” at New York City KFCs. On Thursday, local news crews interviewed fuming customers getting turned away in other markets, including Chicago. Consumers complained about rude service, and media complained about a PR team that seemed asleep at the wheel. By Friday, the day after KFC pulled the promotion.

Big giveaways don’t always crash and burn. Denny’s announced a free Grand Slam breakfast promotion during the Super Bowl and came out big winners. Bryson York chatted with John Dillon, VP of marketing at Denny’s, about the right way to hold an orderly giveaway:

Communicate, communicate and then communicate some more: Denny’s executives toured the restaurant system, talking to franchisees and staff about the coming promotion. They also held town-hall meetings to share ideas.

Energize the staff. Happy front-of-the-house folks are a critical component to a positive guest experience. Denny’s goosed enthusiasm among wait staff with its first-ever Super Bowl ad.

Keep it simple. Make the offer clear and easy to understand. Hold it on one day and within a set timeframe. And make sure it supports an overarching brand strategy.

Pray for the best but prepare for the worst. “We did as much modeling as we could to plan through different scenarios,” Mr. Dillon said. “But at the end of the day, you don’t know what to expect.” Before the event, Denny’s shipped thousands of rain-check coupons to its restaurants, just in case.

Don’t hurry, or don’t do it. Denny’s planned its giveaway months in advance, and it took different forms throughout the process. But the planning paid off. “We heard of a couple of restaurants that ran out of syrup,” he said.

Giveaways are an excellent way to get buzz and foot traffic. Just be prepared for both.

Retailers trying to stay upscale are heading down

A recent New York Times article about the decline in teen spending points out an undoubtedly larger problem for high-end retailers. From the source:

To maintain its prestigious image, Abercrombie has stood alone among mall retailers in not blaring its sales—a strategy that Wall Street analysts have blamed for its current decline. The company reported a 34 percent drop in sales for March at stores open at least a year, the worst performance of mall retailers that month…In the past, the chain has said it doesn’t want to tarnish its image with big discounts, but the risk is that consumers may retain the habit of thriftiness even after the recession ends.

This looks like a case of economic Darwinism—either evolve with your environment or become extinct. Other peddlers of prep fashion have been quicker to adapt:

Even the clearance items at Abercrombie do not exude the promotional fervor that can be found at American Eagle, which has a sign up front noting its shorts are under $25; or Aéropostale, where banners announce two-for-one bargains. Aéropostale also reported a sales increase last month, up 3 percent, a success that Mindy Meads, the company’s president, attributed to the right combination of product and value.

“We get the right looks,” she said. “At the same time, we’re very mom-friendly when it comes to the wallet.”

Retailers looking to grab those coveted teen dollars better rethink their approach. Teen jobs are vanishing. Allowances are undoubtedly shrinking. And thrift is officially chic.

To overcome consumer inertia, tighten the deadline

Nothing gets work done quite like a deadline. But the pressure of a ticking clock is typically associated with activities we don’t want to do (i.e. filing income taxes, writing a term paper). Virginia Postrel wrote an article for the Atlantic Monthly about consumer behavior towards shopping incentives with deadlines such as coupons and gift cards.

Postrel interviewed behavioral economists Suzanne B. Shu and Ayelet Gneez about a study they conducted to see how consumers react to different offer time frames. From the source:

In an experiment, Shu and Gneezy first surveyed 80 undergraduates, asking how they would feel about a gift certificate for a slice of cake and a beverage at a local café and how likely they were to use it. Forty-two survey participants were asked to consider a certificate good for three weeks, and 38 were asked about a two-month certificate. More than two-thirds of the group with the longer deadline said they would use such a coupon; only half of the group with the shorter deadline said they would.

Shu and Gneezy then ran the experiment in real life, with a different group of 64 undergraduates. Half the participants got certificates good for three weeks and half for two months. Both groups were far less likely to cash in their cake coupons than predicted. And contrary to predictions, the shorter deadline encouraged more indulgence. Ten out of 32 people redeemed the three-week certificate; only two of 32 used the two-month pass. Those who redeemed their certificates said they’d enjoyed themselves, while those who didn’t said they regretted letting the deadline slip.

So the tighter the deadline, the more likely consumers will stop looking for excuses and start acting. Shu cites Disneyland as a great example of a business giving consumers “a justification and a deadline” with their free birthday pass program. Postrel goes into even greater detail on deadlines, tiered promotions, and other incentives in the article, which is most definitely worth you time. Just don’t put it off for later.

This is your brain on shopping

Scientists are so damn smart, what with their lab coats, beakers, experiments and such. Some high thinkers over at Stanford and Carnegie Mellon teamed up to study what happens inside our brains when we make shopping decisions.

Here’s how it went down: A bunch of undergraduates were giving cash and offered the chance to buy dozens of different items. Meanwhile, the scientists peeked inside their heads with a brain scanner. Jonah Lehrer (a brainy fellow himself) dissected this neuroscientific study in an article published in the Dallas Morning News. From the source:

They discovered that when subjects were first exposed to the item, a part of the brain called the nucleus accumbens (NAcc) was turned on. The NAcc is a crucial part of our dopamine reward pathway—it’s typically associated with things like sex, drugs and rock ‘n’ roll—and the intensity of its activation was a reflection of desire for the item. If the person already owned the complete Harry Potter collection, then the NAcc didn’t get too excited about the prospect of buying another copy. However, if he’d been craving a George Foreman grill, then the NAcc flooded the brain with dopamine whenever that item appeared.

When the subjects were exposed to the cost of the product, the insula was activated. The insula is associated with aversive feelings, and is triggered by things like nicotine withdrawal and pictures of people in pain. In general, we try to avoid anything that makes our insula excited. Apparently, this includes spending money.

Lehrer goes on to explain how retailers like Costco have effectively tuned into the inner workings of our minds:

The goal of these discount warehouses is to constantly prime the pleasure centers of the brain, to keep us lusting after things we don’t need. Even though we probably won’t buy the Rolex, just looking at the fancy watch makes us more likely to buy something else, since the coveted item activates the NAcc.

But it’s not enough to just excite our reward centers: Retailers must also inhibit the insula. This brain area is responsible for making sure we don’t spend excessively, and when it’s repeatedly assured by retail stores that low prices are “guaranteed,” it stops worrying so much about the price tag. In fact, researchers have found that even when a store puts a promotional sticker next to the price tag – something like “Bargain Buy!” or “Hot Deal!” – but doesn’t actually reduce the price, sales of the item will still dramatically increase.

The full article is definitely worth your time. Lehrer also just published a book on neuroscience and human behavior called How We Decide, which I will be picking up post haste.

Always look on the bright side of life

Even in these slash-and-burn times, rays of hope exist in this business. AdAge wrote an article today that took an optimistic look at online coupons, marketing analytics, mobile, and more. A patchwork from the source:

Online Coupons According to ComScore, coupon sites were the fastest-growing online category in November by traffic, up 32% from October to 35.6 million. Coupons.com got about a quarter of that, or 8.5 million visitors, up from 8 million in October and 6.5 million a year ago. The company has seen its redemption rates increase 1% to 17% in the last year. (A newspaper coupon’s average redemption rate hovers around 1%.)

Marketing Analytics Speaking to analysts in November, Nielsen CEO David Calhoun said he still can’t hire enough analysts to keep up with demand, which is increasing, thanks to the economy. “There is a lot of attention being paid to market-share shifts, pricing analytics, the kinds of things that can sort of keep everybody’s heads above water during this tumultuous time,” he said.

Mobile Location-based advertising (Loopt in partnership with CBS will launch its advertising platform this year), in-game mobile advertising and mobile-video services are examples of emerging areas…According to estimates, mobile marketing will grow from $708 million in overall revenue this year to $2.2 billion in 2012—a compound annual growth rate of 26%.

Coupons. Analytics. Mobile. Three of our very favorite subjects. Good to know we’re onto something.