Coupons The Whole Story
What Are Consumer Coupons? Coupons are vouchers that the suppliers of products distribute to help promote the sale of their products. Coupons give the shopper a reduction of the price of the product, so making it more attractive for the shopper to buy that particular product, rather than the competitor’s one.
How Effective are Coupons? • 52% of coupons redeemed motivated Brand Switching. • 65% of coupons redeemed motivated Pantry Loading (“I was never going to buy the product but the coupon persuaded me to”)and New Business (“I decided to stock up”).
How Are Coupons Distributed? • In plastic holders or dispensers on the shelf facings in supermarkets. • Through in-store demonstrators. • On-Pack (attached to the product or printed as part of the product’s packaging). • As neck tags. • In booklets. • In newspaper or magazine coupons promotions (including Free Standing Inserts or FSI’s).
And More Ways? • In Knock-and-Drops. • In direct mailings. • Product replacement. • As part of an advert for the product in a newspaper or magazine. • On till slips, bus tickets and paper carriers. • Via computers. • As scratch cards.
Which Are Most Effective? Point of Purchase coupon promotions are by far the most effective. This is because most purchase decisions are made at point of purchase. The distribution methods are: • On shelf plastic coupon holders/dispensers. • On pack coupons. • Neck tags. • In store demonstrators.
Coupon Redemption • Coupon redemption varies depending on the product, target market and the method of distribution of the coupon. • The highest redemption (50 – 80%) occurs where coupons for a popular and widely used product are distributed by an in-store demonstrator. However, the total number of coupons distributed is comparatively low. • The lowest redemption (up to 1%) occurs when coupons are printed in a magazine as part of an advertisement. The counter is that the magazine circulation may be very high.
Correctly Targeting Your Coupon Campaign is VERY IMPORTANT!
What Sort of Price Reduction Should I Give? • Between 10% and 20% of the selling price of the product. 14% to 16% seems optimal. • Above 25% gives unpredictably high redemptions. • Below 10% results in campaigns “bombing out”.
Do’s and Don'ts • Clearly indicate the product being promoted – have a picture of it on the coupon. • Show the discount amount boldly. • Do not show the discount amount more than once on the face of the coupon. • Do not have another coupon on the reverse side of the coupon. • Do not create entities that look like coupons but are not. • One product per coupon is ideal.
And the Size of the Coupon? • Coupons the size of the last old R1 note are best. • Coupons should not be too small because they need to fit into the check-out printer so as to be cancelled.
What About the Wording on the Coupon? The following is an example: To the dealer: Please allow the bearer (amount) (incl. VAT)off the price of one (product description) pack. A coupon obtained against the sale of only one (product description) packmay be sent for a cash refund to: Coupon Clearing Bureau, P O Box 32003, Braamfontein 2017. Purchase of sufficient stock to cover coupons presented for redemption must be proven on request. Misuse of this coupon constitutes fraud. Only original copies will be accepted. The coupon cannot be used in conjunction with any other promotion.
What about Expiry Dates? • It is recommended that all coupons have an expiry date. • It is also recommended that the expiry date should not be too strictly enforced. After all, the coupon did result in a sale! • Coupon Clearing Bureau will accept coupon claims up to 3 months after the expiry date unless otherwise instructed to.
Bar Codes on Coupons • Bar codes are not a requirement at this point in time (25 Oct 2006). • However, the industry is committed to the implementation of bar coding on all coupons in the near future.
What are the Costs Involved? • Design and printing cost of the coupon. • Distribution costs, if not on-pack. • Face value of the coupon. • Retailer handling fee. • Coupon Clearing Bureau clearinghouse processing fee.
Who Can Handle Coupon Distribution for Me? Primedia Instore – Graham Bouwer at 011 475 1419 e-mail email@example.com . ZAPOP – Christine Cunningham at 021 982 2223 e-mail firstname.lastname@example.org . Keynote Communications– 011 791 7001. Blue Chilli– 082 826 3549. Niche Sampling– 011 793 5523. Creative Counsel Promotions– 011 803 9101. Expanding Branding– David at 031 262 1825.
Coupon Clearing Bureau • Coupon Clearing Bureau (CCB) was founded in 1978 and is the national clearing house for all consumer coupons in South Africa. • All claims from retailers and wholesalers are submitted to Coupon Clearing Bureau who then audits and settles them on behalf of all suppliers.
CCB’s Functions • Handle all financial transactions between suppliers and retailers that relate to consumer coupons. • Audit all coupon claims and alert suppliers to possible malredemption, actioning whatever decision is made by the supplier regarding the relevant claims. • Ensuring that all retailers understand and are aware of consumer coupons and will accept them. No supplier coupons correctly tendered should be refused at a check-out. • Provision of statistics to all organizations in the coupon industry. • Promote the use of coupons and educate suppliers, retailers and the public on the function and advantages of consumer coupons. • Handle any required liaison between any parties in the coupon industry. • Provides a free consulting service on coupon design, distribution, use and management.
Auditing • Coupon Clearing Bureau is audited on a continuous basis by BDO Spencer Steward Inc. who issue a certificate each year to certify that the clearing house is operating to the required standards. • Suppliers are at liberty to send their own auditors without notice to CCB to perform their own audits on their coupon campaigns.
Potential Growth of Coupons • We at Coupon Clearing Bureau believe that the South African coupon industry is only at about 15% of its full potential. • There is a huge opportunity for growth in this industry that we believe will be realized over the next few years (with the result that costs will reduce through economies of scale). (With a population of 55 million, SA redeems 12 million coupons annually. With a population of 60 million, the UK redeems 360 million coupons annually. The USA’s redemption is 4.6 billion coupons annually, their population being 250 million)
Is There a Website Where I can Get More Information? YES! www.ccbsa.co.za
Marketing Executive You have built your brand. Now, give your customer that little extra incentive to take yourproduct off the supermarket shelf. Offer a Couponat Point of Purchase!