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For more thoughts about the best practices for planning coupon promotions, please contact your Vericast account representative, or use the link below.
Like any other marketing or sales initiative, a coupon promotion is only as good as the planning and preparation that go into it. By following these 10 steps, you can more effectively plan successful coupon promotions. (Click on the steps below for helpful pointers about working through each stage of developing and executing successful coupon promotions).
Step 1: Conduct a SWOT Analysis
Effective planning for coupon promotions begins with looking at your current situation to assess strengths, weaknesses, opportunities and threats (SWOT). This should include:
- Understanding how and when consumers purchase your brand, as well as how these purchase patterns could impact your coupon promotions.
- Looking at past promotional activity for lessons that may be applied to the current promotion.
- Evaluating opportunities to strengthen your coupon promotion through integration with other planned consumer, trade or sales promotions.
- Examining competitive promotional activity to uncover competitive opportunities or threats.
Step 2: Establish Your Objective(s)
Clear objectives are essential for a successful coupon promotion. It is important not to rush this stage of planning because your objectives will play a major role in the development of both your success metrics and your tactics. Possible objectives might include:|
- Create awareness and trial for a new product.
- Retain current users of your brand.
- Attract new users from competitive brands.
- Move excess inventory.
- Achieve an increase in revenue.
- Increase merchandising support from retailers.
Step 3: Define Your Metric(s)
Once your promotional objectives have been set, it’s time to define the metrics that will ultimately be used to judge the success of your promotion. For example, if your objective is to increase revenue by a certain amount, then you need to determine the amount of product that must be moved, and at what cost you can afford to move it. If it’s awareness you’re after, then how many impressions do you need to achieve with your coupon ad?
Of course, it’s also important to consider your SWOT analysis to make sure you’re setting realistic metrics. For example, if the peak season for your product is in the Fall, it might be unrealistic to expect a coupon offer to bring your Spring sales volume up to the same level as it is in the Fall.
Step 4: Select Your Audience
In order to achieve your promotional objectives (as defined by your metrics), it’s important to make sure your coupon offer gets to the right people. Are the right people current users of your product? Are they people who adhere to a certain lifestyle or fall within a certain demographic? Maybe you need to make an impression on as many consumers as possible, or maybe just on consumers within a certain geographic region.
Step 5: Determine When to Reach Your Audience
It’s been said that timing is everything. This is especially true for many coupon promotions. For example, if you’re promoting school supplies, you’ll probably be much more successful in August and September than in May or June. And you’re most successful promotion for sun tan lotion probably won’t be in Minnesota in January.
Step 6: Select the Right Coupon Tactics
By now, you know what you want to accomplish. You understand many of the factors that could influence the success or failure of your promotion. And you know who you need to reach (and when) to accomplish your objectives. Now you must decide the most effective method for achieving your objectives with your audience. A satisfactory answer should address the following questions:
- What is the best medium or combination of media for reaching your target audience?
- What do you want to communicate (both visually and verbally) with your coupon ad?
- What requirements will your audience need to meet to be eligible for the coupon offer
- What face value should you offer to motivate your audience
- How much time does your audience need to redeem the offer?
Step 7: Evaluate the Projected Cost of Your Promotion
At this point in the process, you should have enough information to estimate the costs to distribute your coupon offer, as well as your redemption liabilities. Do your projected costs fit with what has been budgeted for the promotion? If not, then you’ll need to revise either the budget or the planned promotion. Consider whether there might be more cost-effective coupon tactics that could help you achieve your objectives.
Step 8: Prepare for Execution
Preparing to execute your promotion requires much more than scheduling media and developing artwork. For example, you should think about:
- Verify that your coupon’s bar code and artwork adhere to industry guidelines for the design and coding of coupon offers.
- Make sure your sales and trade promotion groups are aware of the promotion.
- Provide retailers with plenty of advance notice to help ensure that promoted items are in stock.
- If you work with a redemption agent, you should notify your agent of any coupon offers well before there is any consumer redemption at retail.
- If you don’t already work with a redemption agent, you should consider working with one. Otherwise, you must make arrangements to receive redeemed coupons from retailers and reimburse them for their costs.
- In order to minimize the potential for payment disputes, it is also important to clearly and completely define the terms and conditions of your coupon offer and communicate them to your retailers.
Step 9: Monitor the Promotion
As consumers begin to redeem your coupons at retail, it is important to monitor the promotion and make sure it stays on track.
- How do your total costs compare to budget? Is there an opportunity to reallocate costs?
- Is the promotion on track to achieve its objectives? If not, are there opportunities to make adjustments in other areas (e.g., trade promotion) to help get the promotion back on track?
- What steps are you taking to limit your exposure to fraudulent coupon submissions?
- What are you doing to make sure you are being invoiced accurately for the coupons that have been submitted to you?
- What are your average per-coupon costs beyond face value and handling? When projected across your total estimated redemption, will these costs fall within budget?
Step 10: Evaluate and Learn from the Promotion
Once your promotion has run its course, you can compare the results against your success metrics to determine if the promotion achieved its objectives. In addition to evaluating your promotion, it is also important to learn from it.
- If the promotion was successful, are there elements of your promotional strategy that can or should be replicated? If not, what could you do differently in the future?
- Did the promotion come in close to budget? If not, why?
- Have you carefully examined the redemption patterns and total per-coupon costs associated with the offer? Do you see any opportunities to further minimize your exposure to coupon fraud and inaccurate invoicing? Or better control your costs above face value and handling?