Do you know your ABCs of couponing?

Oct. 3, 2011 | by Marla Topliff
Do you know your ABCs of couponing?

I had a few store owners stop by recently to talk about new marketing ideas and the subject of couponing came up. There was a rather long and interesting debate between them regarding expirations dates. I just sat quietly and listened as they discussed the pros and cons about accepting coupons that have passed their freshness dates. What you have to understand is that these guys are seasoned veterans in the pizza world, and the fact that there was even a debate about this sort of startled me. I just assumed that they know their ABCs when it came to couponing, but I guess we all know what happens when you assume.

So the ABCs of couponing starts with the question "Why Do We Coupon At All". Well, according to "Business-know how" it's "Because coupons "pull in the business;" they have gained remarkable acceptance and popularity among astute marketing managers. A simple explanation for their acceptance by advertisers is their overwhelming acceptance and use by the consuming public. In fact, Advertising Age (the Bible of the advertising industry) reports that 87 percent of all shoppers use coupons."

A is for Amazing. Eighty seven percent is a big number, and I'd be willing to bet that a healthy percentage of that number represents pizza coupons. Let's face it when Asa Candler, co-owner of Coca-Cola, came up this idea in 1887, he had no clue the impact his little marketing scheme would have on the world. If fact, in the first-half of 2011 coupon redemption volume reached 1.75 billion, a 2.9 percent increase compared to the first half of last year. In total, consumers saved $2 billion in that first six months.

B is for Bargain. People love a good bargain. Bargain shopping has actually become an almost cult-like obsession for millions of people with about 291,000,000 websites devoted exclusively to finding and using coupons. This obsessive trend has helped turn the pizza business into the deep discount paradox that it is today. It's an unfortunate truth that while our businesses depend on coupons to help us survive, our attempt to out coupon each other is hurting the industry.

With commodity prices being so high we all feel the deep discount pain, and in trying to fight it we may just coupon ourselves out of business. So don't try; deep-discounting means lowering your quality to match a coupon, and it's just not worth it. Instead try creating really good "bundled" offers that won't kill your food cost but will bring in customers. Keeping food costs in mind, combine a few items to create a package deal. For example: A Value Deal might includes 1 16-inch Thin Crust Cheese Pizza, a dozen wings, four Garlic Bread Sticks, and a 2 Liter for $24.99. Food cost is about $10.99. The Customer's perceived value is high, but it's easier on your bottom line than the $10. pizza. The same goes for Percentage-Off Coupons; they are simple, the but the customer's perceived value is high.

For example: A Value Deal might includes one 16-inch Thin Crust Cheese Pizza, a dozen wings, four Garlic Bread Sticks, and a 2 Liter for $24.99. Food cost is about $10.99. Perceived Value is high, but it's easier on your bottom line than the $10. pizza. The same goes for Percentage Off Coupons; they are simple but perceived value is high

C is for Customer Service. to quote my friend Ed Zimmerman, president of The Food Connector, there are only two rules in customer service, "Rule No. 1: The customer is always right. Rule Nol. 2: If the customer is wrong, see rule No. 1."

This finally brings us to the subject of those pesky expiration dates. The thought is that expiration dates are there to give your customers a sense of urgency, considering that its projected that 92.5 million adult Internet users will use online coupons in 2012, it's a good thought, but again use caution. Within the last few months two coupon giants Groupon and Living Social have had lawsuits leveled against them because of expiration dates. Also, you run the risk of turning your frequent customers into monthly customers by making them wait for their coupon to arrive before coming in again.

Using the phrase "Limited Time Offer" may work better. It gives you more leeway, so if your offer is doing well you can extend without having to pay to send it again and you can end it at any time. For a more compelling reason think about this; in this tough economy most people don't just want to save a buck when they need to, and for some it's difficult to ask for a break. Do your customers a favor; don't make them ask. If they bring you an expired coupon, just take it with a smile and thank them. They will remember, they'll come back and you'll both be happy.

Marla Topliff
Marla Topliff, president of Rosati’s Pizza, has helped grow the Chicago franchise from 60 stores in 1999 to the 170 national brand that it is today. She supervises all aspects of marketing, customer service, store communications and vendor relationships. wwwView Marla Topliff's profile on LinkedIn

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