I love coupons … in theory, that is. Right now, 15 or 20 clippings are awaiting their escape in a handy little blue case. But despite the best of intentions, they probably won’t see the light of day.
Here’s why: I always forget them in my car when I’m at the grocery store. Why not go back and get them, you ask? Too inconvenient (pathetic, I know). Fair enough, you say. But why not keep the coupons in your purse? I counter, with a raised eyebrow, “Do I really need to add another item to the Great Abyss?”
The May edition of Harvard Business Review reveals that only 1% of all coupons are used – and says that isn’t a bad thing. In fact, businesses can reap more rewards from consumers who pitch the coupons touting the items or services they’re pitching (Get it? My apologies).
Unused coupons still pay off
In 2010, U.S. consumers redeemed 3.3 billion coupons, cutting roughly $3.7 billion from purchase prices. That’s a lot, particularly since only about 1% of all coupons are ever used. Conventional wisdom holds that little benefit is seen from the other 99%. But new research suggests that unredeemed coupons are highly valuable. In fact, the coupons that wind up in the trash ultimately deliver greater returns to a company than the coupons that are redeemed.
In an experiment with eight national retailers, consumers who received but did not redeem coupons still typically increased their purchases in the associated stores. In fact, as a group the nonredeemers accounted for 60% of the coupons’ "sales lift" – the additional amount spent on both promoted and unpromoted items.
How do coupons produce a lift among nonredeemers? They increase awareness of a brand or a retailer even when they’re not cashed in. This finding isn’t surprising, but the magnitude of the benefit is.
Coupons can serve as advertisements that attract new customers and inspire gratitude and loyalty among existing ones by delivering important messages about a company. Therefore, as much care should be taken with coupons as with other marketing materials, striving to delight customers, not simply to close a deal.
Source: Harvard Business Review, May 2012