Couponing alone is not enough to build loyalty

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By: Wise Marketer Staff |

Posted on November 5, 2012

By combining coupons with customer loyalty and marketing strategies, retailers can build loyalty not only to low prices but also to their brand, according to the latest Retail Brief report on couponing strategies by loyalty management firm Aimia.

The briefing, entitled 'The Art of the Deal', recommends specific tactics for retailers looking to blend coupons with an effective loyalty strategy to change customer behaviour. These tactics include:

  • Deploying introductory couponing to establish relationships with previously invisible customers-those who redeem coupons but don't identify themselves.
  • Delivering value and relevance through targeted application of mobile coupons, especially as share-of-wallet evolves into share-of-phone.
  • Using smart coupons to target discount offers based on customer value and relevance. There's no reason that every customer targeted for a coupon offer should get the same coupon.

"In any retail sector, there can be only one 'low-price leader' and, if you aren't that leader, then you face a difficult challenge in building loyalty to something other than the deal," said Alan Goldstein, managing director of retail customer loyalty for Aimia. "Success in today's hyper-competitive environment requires retailers to focus their dollars where they can have the greatest impact and influence their best customers. All that artful couponing requires is that you give customers a compelling reason to identify themselves, and then deploy coupons to understand, influence and maximize the value of your best customers with win-win deals."

The report also included relevant third-party data on coupons and customer potential, including:

  • 60% of all online shoppers subscribe to a daily deal website;
  • Consumers will redeem 20 million mobile coupons in 2012;
  • In 2013, consumers will redeem 40 million mobile coupons;
  • More than 55.7 million American consumers use online coupons (some 25% of the US population).

Coupons are easy and cost effective to implement, and there is no doubt that they work well. But Goldstein added that success in today's hyper-competitive retail environment also requires retailers to evolve coupons from a 'blunt instrument' approach to being more of a 'surgical tool' that can focus discounts where they have the greatest impact.

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