Don’t overcomplicate your offers

21Jul09

Many stores seem to be including coupons on their receipts these days. The goal, of course, is getting shoppers to return during the next few weeks so they’ll buy more products. Typically, these coupons take the form of “Get $5 off your next purchase of $30 or more”, or something like that. However, I saw a coupon offer last weekend that puzzled me. From what I could understand, you had to bring in the coupon during your next visit, and then spend like $25. After that, they would give you a $5 off coupon, but you couldn’t use it until the following visit. In other words, you had to remember to bring in the offer details during your next trip, and then keep the coupon to use for the next trip after that.

This type of offer is far too complicated. People like instant gratification, and like to see direct rewards when they take the action you requested. Unless there are big dollar amounts involved, a multi-step discount offer will probably have very low redemption rates. Who knows, maybe that’s what the store wanted: shoppers return more often but forget to ever complete the coupon offer. But if your goal is to actually get people to come back, use the coupons, and spend more money, it pays to design straightforward offers that people can understand.

In most cases, the smart approach is to give people a discount on their next visit, rather than making them jump through numerous hoops or requiring them to return two or three times. But wait, don’t we want them to keep coming back? Of course. The solution is to keep incentivizing them with new offers for each return trip, or a program based on aggregate purchases over time. Just don’t confuse first-time shoppers or those who only visit occasionally by presenting anything too complex. Once you’ve gotten them in the store a few times, then you can try out more elaborate promotions that go beyond the next visit.



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