“Hold it… I think my phone has a coupon for that”

Observation:   Today’s Research Brief includes a story suggesting that people who use digital coupons spend both more time and more money when shopping.  Click here to see the story.

Implications:   Couponing used to be thought of as the activity of people who have more time than money.  This Research Brief story—based on findings from GfK and Coupons.com—reminds us that people who have money (enough to buy computers, iPads and smartphones, anyway) still like to save money.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Cause marketing meets common sense

Observation:   Today’s Springwise newsletter includes an overview of a project called “Cause.It.”  The effort is basically an app that brings a fresh approach to Cause Marketing.  Instead of (or in addition to) simply making donations to various charities, Cause.It is an app that allows the business to reward volunteers with discounts.  In doing so, giving is potentially more personal and fulfilling for the volunteer, and cause marketing dollars become more measurable for the sponsor.

Implications:   The app is very smart, but the principle is even smarter.  Instead of (or in addition to) giving money, free product, or other in-kind donations to an organization, this article suggests that you reward the people who fuel accomplishment.  What’s not to love?

The next time your approached by a worthwhile non-profit organization, you might ask whether—instead of or in addition to giving to the group—it might make sense to create a similar plan.  If you’re offering special discounts to folks who help clean up a park, walk or run in a charitable race, or volunteer to read aloud at an area school or library…  consider the goodwill that might be generated with this focused group of consumers.

This is the kind of smart marketing that stands a chance of building a bond with a new group of constituents.  It suggests that your company respects and appreciates the effort involved with volunteerism… and respects a cause that is close to the consumer’s heart. 

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

The dumb bell economy hits the food aisle

Observation:   This morning’s newsletter from Phil Lempert explains that food retailers have their own version of the “haves” and “have-nots” landscape.  He divides consumer sentiment into the two groups of pessimistic and optimistic.  The latter group is feeling better about the economy, more likely to try new products and experiences, and indulge a little more freely.  Pessimists might be more likely to change retail channels frequently (going from grocery stores to club, discount and dollar stores), clipping coupons more religiously, and taking extreme measures to maintain a frugal lifestyle.  Click here to see the story.

Implications:   I’ve written pretty extensively about the Dumb Bell Economy, and you can review those past stories by clicking here.  This Phil Lempert piece does a good job of reminding us that—just as was the case with the recession—the economic recovery is a very personal thing, and might look drastically different from one household to the next.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

48% of convenience store/gas station customers don’t make it into the store

Observation:   According to a story published this week by Convenience Store News, only about 52% of convenience store/gas stations actually make it into the store for a purchase beyond fuel.  Of that group, about one in four purchases a soft drink.  (Click here to see the story.)

Implications:  The C-Store business has done a fairly good job of taking food dollars from quick service restaurants over the past few years, but this report suggests there is still room for improvement and growth. 

What kinds of things compel a person to walk into the store instead of climbing back into their car after paying at the pump?  Point-of-purchase stickers or video ads played at the pump?  Covering the store structure with posters about cheap corn dogs or ice cream tickets?  How about coupons mailed (or emailed) to commuters that live in the store’s neighborhood?  This is not just a question for the C-Store… but one that anyone who sells lottery tickets or beverages would love to answer.  (And I bet a little research on your customers would provide great clues.)

If you’re in the fast food business, how do you re-take some of the food dollars that the C-Store industry nabbed during the recession?  Dare I say “ambience?”  Freshness?   (There’s a good chance that “cheap” alone won’t do the trick.)

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

$4.6 Billion in coupons redeemed last year

Observation:  This morning’s Research Brief offers another angle on a topic we wrote about a couple of weeks ago:  That coupon redemption was up more than 12% last year.  The source is listed (again) as NCH Marketing, a Valassis company.  Click here to see the complete story.

Implications:   This week, I’m preparing to talk with a major group of Chamber of Commerce organizations… so I’ve been spending significant time thinking about the current state of the economy and business.

If you weren’t paying close attention, the past thirty-one months (since the recession ended) may have felt like economic purgatory; we were no longer living through the Great Recession, but hardly felt as if we were in the glow of a Great Recovery, either.

For those who have been paying close attention, the past 2½ years have been a period of reconciliation… a term we’ve hammered on quite frequently at this site (click here to see a set of stories on the topic).  The NCH Marketing study on coupon redemption seems to support that idea; that people are sticking to spending habits and saving strategies that help them cope with a set of financial realities that are different from their pre-recession purchase priorities.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Group coupons effective at driving product trial (and loyalty, if you do it right)

Observation:  Results of an IPSOS study were published in a press release this morning, suggesting that deal-of-the-day tactics can lead to new product trial, as well as a degree of loyalty to new companies that a consumer has discovered through the coupon redemption.  To see the story from IPSOS out of Vancouver, BC, click here.

Implications:   I think this report supports the idea that the most important element in determining whether a consumer will return to buy at full price is whether the company, product or service was able to demonstrate important value during the discounted experience.  While some of the group coupon deals I’ve seen look more like free samples than discounts, the daily deal tactic might make sense if the redemption experience leaves the consumer wanting more… and willing to pay for it.


Now that companies and consumers have figured out how to make daily deals work... it will be interesting to see whether the companies built on that premise can make it work.  A story in today's Wall Street Journal indicates that Groupon is not yet taking a profit on the business model... disappointing some investors.  Click here to see that story.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Coupon use remains strong

Observation:  An article from yesterday’s Supermarket News indicates that consumers redeemed an estimated $4.6 billion in packaged goods coupons last year, up 12.2% from 2010.  The story, citing data from Valassis, explains that 27% of coupons required multiple product purchases (up 2% from 2010), and had an average face value of $1.54.  Click here to see the full story.

Implications:   The difference between a fad and a trend is much like the difference between a wave and a tide; one comes and goes quickly, and the other stays for a longer period of time.

It would seem that coupons have found favor not just as a quickly-fading fad, but that they will be an attractive incentive to consumers for a longer period of time.  More evidence that consumers continue to reconcile their purchasing behaviors, and adapt to the new realities that exist in the wake of the Great Recession.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Extreme coupon users far from the majority

Observation:   Lots of people are using coupons, but not all of them are extreme coupon users.  That's according to this story from today’s Marketing Daily (click here to link).

  

Implications:   One fear that prevents some companies from delving into the realm of couponing is the image of the hoarding coupon extremists who will drain the store of inventory but never buy anything at the regular price.  According to this article, it sounds like those folks are in the extreme minority.

I enjoyed the way the research cited in this report (from Valassis, BIGInsights, NCH Marketing and various coupon bloggers) provided insights as to how people are using the money they saved by using coupons.  But beyond “gas, essentials, and paying debt,” I’d love to know how many folks used those savings as “found money,” permitting them to indulge in a treat at the next store they walked into.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Daily deals: “Value” is not just “cheap”

Today’s New York Times held yet another article suggesting gloom and doom for the so-called “daily deal” coupon providers, such as Groupon, Living Social, and others.  Click here to see the full story.

Implications:   As I wrote back in April [see “Daily Deals go mainstream”], daily deals are not all bad.  It’s just that you have to have a plan that will yield lots of first-time trial, but in a way that you can retain those customers over time, and gradually build a relationship that allows you to sell your product or service at a reasonable margin.

Don’t think of daily deals as a win-or-lose ad campaign.  Ask whether you can convert those lowball consumers into consistent spenders over time.  Without thinking ahead, you’re setting yourself up for a campaign that succeeds… at your expense.

Don’t just focus on the daily deal.  What comes next?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Daily deal fatigue

A story in today’s USA Today suggests that the novelty of daily deal emails and website has begun to wear.  Click here to see the story.

Implications:  The barriers to entry are very low for anyone who wants to start a site that offers coupons for cheap goods.  You likely offer coupons on your own website, and send out email blasts or text messages to a database of your own past customers.

It was only a matter of time until the space became very crowded.  It’s important to focus on ways that you can distinguish your offer from the thousands of others that are in the marketplace.  And make sure you’re targeting people who might be likely to repeat the purchase—and at better margins—after your introductory offer has been enjoyed.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Who wants to be a (coupon-clipping) millionaire?

A study by Redplum was cited in today’s Marketing Daily… in a story where 93% of survey respondents say they would continue to clip coupons, even if they won the lottery.  Click here to see the story.

Implications:  This story might be emblematic of the extent to which being frugal has become a culture, not just a matter of dollars and sense.  Of course, if someone actually did win the lottery, their actions in reality might be slightly different than the behavior they predict now.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Technology tactics you're likely to see at retail during the holidays

Retailers are likely to increase their use of social networking, customer activation via mobile device, and other emerging tactics during the holiday selling season of 2011.   That’s the essence of this blog post from Connected.  Click to link.

Implications:    There's nothing terribly new or dramatic about this list.  But this variety of technology tools illustrates just how sophisticated the consumer has become… and how eager retailers are to respond to this emerging buyer paradigm.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Digital coupons: In addition to—not instead of—traditional Sunday newspaper

A recent Marketing Daily posting suggests that all of those new players in the realm of couponing are joining—not replacing—that weekly sift through the Sunday paper looking for bargains.  Click here to see the story.

Implications:    We’re often tempted to try the new things media has to offer, and that’s good.  But we should maybe think twice about saying “out with the old and in with the new.”  Novelty is nice, but many consumers still like to go with what they know.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Coupons remain strong in 2011

Today’s Research Brief explains that coupon remain a strong savings tool for consumers, especially where packaged goods are concerned.  Click here to see the story.

Implications:    In print, online, or via SMS or QR Codes captured on mobile device, folks are still looking for ways to manage their family budgets carefully.  Have you considered the tactic to make your product or service an attractive alternative?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Daily group coupons go mainstream

A recent Research Brief newsletter from Mediapost suggests that daily deal coupons are finding a special place in the email in-boxes of willing participants.  Click here to see the story.

Implications:   It’s not just about the savings; daily deal coupon companies (Groupon, Living Social, etc.) are helping drive product trial.  Recently, I was told by a young woman that she had purchased a skydiving package at a reduced rate; she explained that, “I really wasn’t shopping for a parachute experience when I opened my email this morning!  I just couldn’t resist!”

Daily deals represent that small indulgence that people had denied themselves throughout the recession.  Of course, there are hundreds of different ways to deliver this message of savings to consumers… but you might consider whether—beyond the lost-leader offering—is there a way you can convert that product/service trial into long-term customers who are willing to pay at a more profitable rate?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Couponing 3.0

As consumers increasing carry their technology in their pocket—in the form of smartphones—they are also embracing the use of coupons via mobile. That’s according to this piece from Marketing Daily (click to link).

Implications: I’ve written extensively on the increasing role that mobile technology is playing in the shopping process [See this piece about comparison shopping from May 2010]. Are you “the app” for consumers in need of your product or service?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Coupon use (and other savings strategies) remains strong

An article from this morning’s Research Brief indicates that coupons remain popular, as food product prices continue to rise. Click here to see the story.

Implications: During the recession, coupon use (and the other shopping behaviors mentioned in the article) were the consumer’s way of defending against lower household incomes. During the recovery, those same behaviors are helping defend against inflation.

What behaviors are you noticing about your customers now that the recovery is gaining momentum? Are they shopping/deciding the same way they did a couple of years ago? Are they motivated by the same reasons?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Whose loyalty is it, anyway?

An interesting story in today’s Marketing Daily suggests that many customers are less than impressed by some of the customer rewards programs out there. Click here to read the full story.

Implications: Do you see your company’s reward program first as a direct marketing tool that lets you advertise to current and past customers… or is its primary function to foster loyalty among those consumers?

Don’t get me wrong: A good rewards program could and should do both. But if you’re focused too heavily on the advertising aspect of this tactic, and too little on the customer service component… the company/consumer relationship could be at risk. A great loyalty program doesn’t just reward the consumer for being loyal to you; it should demonstrate that your company is loyal to the consumer.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

My opinion: A smart use of email marketing

Last night, I was flying from Atlanta to Minneapolis, and learned of a special “holiday gift” from Delta Airlines, Google Chrome, and GoGo in-flight internet service: Free Wi-Fi on this flight. So I fired-up the laptop and started working… free, except that I had to give GoGo my email address during the registration process.

Today, I received a very simple email from GoGo, with “Receipt” in the subject line of the message. It showed a table like this:

$12.95 for In-flight Internet Service
-12.95 for promotional discount
0.00 Sales Tax
-------------------------------------
$0.00 Total Cost (Happy Holidays!)

Implications: This was a smart way for GoGo to get me (and thousands of others, I will assume) to try in-flight Wi-Fi. Some people will pay to use the service in the future, some people will not. But I loved the way GoGo didn’t just give me value. They reminded me that they gave me value! (No harm in that, is there!?)

Next time I need to get some work done when I'm in the air, will I remember how easy logging-on to the plane's Wi-Fi system was? Absolutely.

Mike Anderson

My opinion: How to not run a loyalty program

I keep a folder in my personal email account called “Bad Business.” It is the place I deposit examples of what I believe to be really poorly executed email marketing. This is not faceless spam that comes from some nameless hacker, mind you… the folder holds examples of email marketing that I believe could be doing more harm than good. Now, I don’t like to single-out or pick on any company in particular, but a recent sequence of messages I’ve received from Best Buy simply offers too many good teaching moments. I can’t resist. Can you spot the missteps that lead to the risk of losing a loyal customer?

Back on October 29th, I received an email from Best Buy Reward Zone that included the following text:

“We are writing to let you know that Best Buy has changed the way it manages opt-out preferences. Going forward, opting out of either Reward Zone or Best Buy marketing communications will result in being removed from both marketing lists. In order to honor your request to receive Reward Zone program e-mails containing special offers, invitations to events and account updates, you have been opted-in to receiving Best Buy marketing communications generally.”

In other words, Best Buy was letting me know that they were going to start using my email address the way they wanted to, not the way I wanted them to. Within a few days, I had already received several sales messages that struck me as abuse-of-access, so I opted-out of the program they had shoved me into. The notice I got back said, “It could take up to ten days” to stop receiving emails. (Funny, when I change the auto-response setting in Outlook, it happens the moment I click on, “OK.” Best Buy sells a lot of tech equipment, and they even have their own Geek Squad; they should be able to figure this out much more quickly than ten days… like, NOW.)

Anyway, the opt-out was not successful. I continued to receive emails (I wanted to see how long this foolishness would go on). But it wasn’t just the number of unwanted advances that was stunning to me… it was the nature of the messages. I received coupons for movie tickets (to shows that had no appeal to me), tacos and pizza (Taco Bell and Pizza Hut, you are complicit in this insanity), and other offers that had little or nothing to do with Best Buy’s knowledge of what kind of things I might spend on! (I’ve received at least ten smartphone offers, even though I purchased one just weeks before the spamming started.)

After too many unwelcome and irrelevant advances, I added the company to my spam list this morning. Best Buy, I’ve opted-out of my relationship with you... whether you like it or not.

Implications: If your marketing efforts include an email component… go back through this story to spot the mistakes Best Buy may have made (in my humble opinion), and see if your company could be at risk of making some of the same missteps.

“Opt-in” is short for giving people the option of participating. A company cannot “opt me in.” That’s my decision. Ask your customers for permission, and sell them on why it’s a good idea to receive communication from your company.

“Opt-out” means knock it off! “No,” means “no.” Consumers are not so stupid to think that a “stop sending me email” command is delivered by pony express and could thus take ten days to arrive.

If I give you access, give me respect. You knew my age and interest, based on information I had given you and transactions I had completed with you in the past. Don’t send tickets to a teenage-appeal suspense movie to a fifty year-old guy. That’s just common sense.

Smart email policy is not dictated by your company. It is decided by your customers.

[Note: The New York Times offered a story about Best Buy’s current state of operations in their December 17th edition. Click here to see it, and see whether there are more learning opportunities within.]

Mike Anderson