Effectiveness of Coupons

Coupon mailers are a staple of direct mail. There is a reason why. This study shows that coupons work even when they aren’t used.

An experiment analyzed by University of Virginia Darden School of Business professors found that unredeemed coupons are still valuable to the companies that issue them. “In fact, the coupons that wind up in the trash ultimately may deliver greater returns to a company than the coupons that are redeemed,” write Rajkumar Venkatesan and Paul Farris.
Coupons are a popular advertising marketing tool. In 2010, U.S. consumers redeemed 3.3 billion coupons, cutting about $3.7 billion from purchase prices, though only about 1 percent are ever used, the professors write.
Venkatesan and Farris analyzed the advertising campaigns of eight national retailers involving more than 500,000 targeted coupons for items representing more than 300 brands mailed out over 16 months.
The professors found that consumers who got the coupons but didn’t use them still “typically increased their purchases in the associated stores.” In fact, these consumers accounted for 60% of the coupons’ “sales lift” — the additional amount spent on both promoted and unpromoted items.  Data analysis found that coupons — whether used or not — still increase awareness purchasing of a brand or retailer.

via (Print in the Mix)

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