Coupons. I’d have hoped by now that coupons would have ceased to exist. Hoped that the horror of TV shows such as Extreme Couponing would have convinced marketers that they were pouring money away. But no. Latest data suggests that more money is being spent on coupons that ever before. Why? Because as marketers we are lousy at evaluating activity, and we’re very good at using data to tell us what we want to hear. We convince ourselves that coupons, and all of the other discounts we give, are actually good for us.
Who uses coupons?
I was mulling over discounts and coupons recently. I was skim-reading an article and the following sentence caught my eye “Downloaded coupons get up to an 85 percent redemption rate with current brand users but they are failing to persuade switchers or recruit new users.” It is easy to see how a marketer might be delighted with the performance of the coupon campaign and yet completely miss the point. The coupon has completely missed its target, and redemption is a poor KPI.
How are coupons used?
About an hour before reading this I’d been online buying a Father’s Day gift. I’d decided to buy my Dad some really nice beer, and so I’d searched across a number of sites to find the right product, the right mix of beers, and the right quantity and price for me as the shopper. Having made my decision, almost without thinking, I Googled to find a discount code, applied it, and got myself a 10% discount.
Note, the discount code search happened after I’d chosen the product. It had no influence whatever on my purchase decision, it just reduced the profitability to the retailer, or the supplier, or both.
Somewhere in an office, some analytics manager will whoop with delight, and record that coupon as a success – it has brought in a new user, you see! Brilliant. On target. Fab. Roll out more coupons.
And yet.
No. the new shopper had been brought in earlier, by the SEO, by a great, easy to use site, and by having the perfect product for the occasion.
Do you know who uses your coupons?
And this isn’t just a warning about coupons and discounts (I’m pretty sure most marketers aren’t keen on these anyway). It’s also a warning against the blind use of Big Data. Big Data too often tells us what happened, when it happened, and who was involved. It rarely gives us a ‘why’. In this case, it is true that I was a new customer, and true that I used the coupon. But that was merely correlation, not causation. Little wonder, perhaps, that coupon usage is rising in the digital age!
Coupons and discounts do help sales, and if used and targeted well, can be effective in driving business forward, don’t get me wrong. But coupon redemption is a poor KPI at the best of time, and all the big data in the world doesn’t help marketers, unless they can see the ‘why’ behind the ‘buy’.
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Image: Flickr
