Couponitis discounting your business
1. Enter, Little Suzy Ad Rep…
Driven by $10-12K goal each month… Taught to sell ad space….
Told by her sales manager each month to get the ad at all cost!
She calls on Joe Retailer…
2. Joe listens intently to Suzy’s presentation
Suzy goes for the close and Joe asks, “How will I know my ad is working?”
Suzy thinks about it for a moment and offers, “A coupon! We’ll make the ad into a coupon and then people will redeem the coupon.”
Three types of consumers
“A” – Quality product, quality service, not necessarily price driven
“B” – Keeping up with the Jones mentality –
“C” – Stands for the “Coupon Clipper
- Buys nothing without a coupon or at full price
- Deeper the discount – the happier they are
- Only faithful as long as the discount last.
From the business standpoint
- Pareto Principle (80/20 rule)
- 80% of consumers are type “C” shop the discounts. Responsible for just 20% of our revenue
- Whereas, the “A” and “B” types make up 20% of our consumer base but are responsible for 80% of our revenue.
- Weary of coupons and discounts
“Couponitis,” Inability to attract customers without the use of coupons or deep discounts – (Ex. Pizza industry)
1. Wes’ story….
- 1-2% return
- Business up and down
Coupons & discounts do have a purpose:
- Introduce a new product or service
- Clear out old merchandise
- Thank you for your loyalty…