Editor’s note: Tom Nilsen knows the game – but most importantly, he knows the score.
At Conversational Currency, we talk about currency, money, trade, exchange and value. Coupons are a form of currency, they have a redemption value backed by a tangible activity. They are counted, traded, and they store value. It’s a currency. So what happens if everyone wants your coupon? Do you celebrate and issue more to meet the demand? If restrict the supply and does the demand increase or- do you lose customers? Run these ideas through MBA 101 and see what happens.
There is new thinking hitting the streets with Social Media in full play. Financial concepts are being applied to all kinds of marketing endeavors and it is catching the old guard by surprise.
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Afraid of High Redemption on Your Coupon?
Author: Tom Nilsen
Having been one who budgeted for and placed millions of coupons for Nestle, Coca-Cola, Sara Lee, Coors/Molson over 20 years…I can share from personal experience just how common fear of high coupon redemption is among brand marketers. For the next fours years of my career, I sat across from the largest CPGs coupon buyers while with Catalina Marketing. Here again, I witnessed fear over exceeding the budget for coupon programs. Having moved into the digital and electronic marketing world, I now fully appreciate just how silly and inefficient marketers (including mself) have been with regard to couponing.
Shouldn’t you want high redemption if you’re spending vast budgets to get incentives into consumers hands? It’s sort of a puzzle. High redemptions exceeding budgets might mean I’ll lose my job over poor planning performance. Then there’s that little issue nobody wants to talk about: the actual ‘quality’ of any redemptions. The truth is that most mass coupons are clipped by consumers who would have bought the product anyway (called subsidizing existing behavior). Not a great idea, but no records to prove either way. If you go the more targeted coupon route, you’ll solve some of the latter risk with data, but those come at a high cost.
Imagine if we marketers could have zero waste in placement of incentives and near zero cost! Imagine if ‘targeting’ by zip code, demographic, or other ‘assumption-based method’ were to be replaced by communities of consumers who aggregate and define who they are for you. And reaching them is nearly free.
The starting line is Social Media and the finish line is knowing how to convert Conversations into Currency (what our business model calls ’Conversational Currency” (TM).
Ready to Move To the New Media?
