Interest in coupons rises as economy falls

Last year Americans ended a 16-year trend of declining redemptions by redeeming 2.6 billion manufacturers' coupons, according to CMS Inc., a coupon processing agent and promotions logistics service based in Winston-Salem, N.C. Coupon usage goes up as prices & unemployment rates go up. Coupon clipping isn't just for your grandmom anymore — email and online offers are also appealing to the younger generation. Their electronic based life makes it easy for them to just point & click to receive savings.

Digital coupons tend to have much higher usage rates than traditional paper coupons — as few as 1 percent of manufacturers' coupons are usually redeemed in a given year. Advertisers are also increasingly using coupons to attract attention to new products, and online coupons are helping them more efficiently reach consumers.

Email marketing allows you to send your savings offer right to your customers, proactively. There is no waiting for your customers to find you online. The simple fact is email works. Email is the highest ROI channel by far. Email marketing returns $57.25 for every dollar spent, more than 150 percent greater than the ROI for non-e-mail online marketing (Source: Direct Marketing Association (DMA), 2007). Plus, if it's not giving you a positive ROI, you will quickly know and be able to switch it up and try a different offer, time, database etc. You can't manage what you don't measure.

The power of one day email offers

Election Night is usually slow for John Modestine, owner of The Village Tavern in North Wales, PA. So, he sent an email offer to his customers to try to boost sales. He sent 1979 of his customers an offer: Buy One Get One Entrée ($12 value) - valid for Tuesday November 4th only.

The Results?

29 parties dined
$37.50 check average
$10.29 discount per party
Netted $27.00 per party

He spent $89.06 to net $789.03 after discounts. The Return on Investment is 886%

Not bad for a typically slow dinner night!

The Value of Simple Email Offers

Below is part of an article from MarketingSherpa's Case Studies about an email marketing test. It further ratifies why simple email gift certificates have double the open rate of traditional email programs and why the results are much better than those from newsletters and other informational approaches.

Pala and his team learned that their customers preferred promotion-heavy email by a wide margin. It produced "five times more revenue per [delivered] email" than the information-heavy version.

It also got an open rate that was 200.6% higher than the educational email. For click-throughs, the promotion-heavy email won by 89.8%.

"We now understand that people don’t want to read about the products as much as we thought. If you don't have a really condensed and important message to communicate, then they don’t really care."

Money Back Guarantee

Do your customers tell you "it's the best pizza we've ever had"? Then guarantee greatness.

Try hanging a sign in your restaurant & incorporation a money back guarantee in your marketing:

I Guarantee our Pizza is Great! If you don’t absolutely agree ...it’s FREE! No questions asked!

What's next?

1. You may get a flood of free loaders eating your pizza without paying. If this happens - it will be a quick, cheap lesson. If your pizza is truly good, this won’t happen because they know they will only get away with it once, then they will have to give up one of the few pizzerias that provides consistently good pizza.

2. You will sell a bunch more pizzas to people who are frustrated by having to continually play a game of chance to get a decent slice, people who are constantly having to part with their hard earned dollars before they know if the product is as tasty as promised.

Too often, customers bear the total RISK of doing business with us. If we buy a car and it doesn’t work, we take it back… But with smaller ticket items, we just pay and if they don’t meet our expectations, we just never go back…

The risk should be yours, not your customers—if you do this, your sales will dramatically increase, I guarantee it.

Email Frequency

Here’s an excerpt from TargetX's Recruitment Minute Newsletter that helps explain the frequency of sending email offers.

While there is no consensus -- except that relevancy is king -- there is a range suggested by a number of email experts:

"Any frequency greater than one email a week is considered quite heavy -- and may produce an unwelcome backlash," according to Arial Software founder Mike Adams.

"On average, successful emailers send messages at least every three weeks," reports Ben Isaacson, former executive director of the Association for Interactive Marketing.

"If you mail less than once a month," says online marketing guru Jeanne Jennings, "you risk being forgotten by recipients."

We recommend every other week. Not too little. Not too much. With pertinent content, it's just about right.

How Soon Do People Open Their Email?

According to the November 08 Email Marketing Metrics Report, much sooner than before! Nearly one-third (32.26% to be exact) of all opens occur within the first two hours compared to 29.57% six months ago and 29.40% a year ago.

When faced with a tightening budget...

You should not cut spending on email marketing. According to an October 2008 report by the Direct Marketing Association, the return on investment for email was $45.06 for every $1 spent, as opposed to non-email Internet marketing's $19.94. Email provided more than double the effectiveness compared to other online marketing methods. By the end of 2008, it will have driven $28 billion in sales and is projected to drive $32.6 billion in sales in 2009.

Coming in for Dinner and Deals

More than 4 out of 10 consumers are dining out less often than they did six months ago... keep your name in front of them so they are thinking about you, and not your competition.

-Dinner comprises 54.8% of fast-food users' carryout occasions, according to a 21-quarter average from Quick-Track, a quarterly survey by San Clemente, Calif.-based Sandelman & Associates. Dinner makes up 48.4% of all QSR users' most recent purchase occasions. Lunch makes up 39.7% of all users' last occasions and 33.9% of carryout occasions.

-Guests using carryout on their last visit were more likely than all fast-food users to take advantage of a limited-time special: 23.9% vs. 19.1%.

-28% of consumers have not decided what they will eat 2 hours before dinnertime on weekdays and 35% on weekends. Many of these late-dinner deciders opt for quick-serve, takeout and delivered meals.

Preferential Email

Email is preferred over every other form of human communication, including the reigning champ -- the telephone. Technology firm Reachon.com asked 10,000 people — their survey reveals the allure and power of email:

- 45% of respondents say the first thing they do when they wake up in the morning is check their email -- often before brushing their teeth.

- 20% admitted that reading their email first thing in the morning kept them from getting their kids to school on time, and 26 percent said it made them late for work.

- 80% reported that the first thing they do upon returning to the office from lunch is check emails -- even before checking voice messages.

- 15% conceded they check their email via PDA in the bathroom.

- 85% say they now prefer communicating by email rather than phone -- primarily because of email's ability to get straight to the point.

We have become a society that is more to the point and your marketing should reflect it.

Dollars Off vs. Percentage Off

Time-honored wisdom states that people respond better to an offer for a dollar amount off of a purchase rather than a percentage off. The reason is that people can easily deduct x amount of dollars off of a price, whereas figuring out the percentage off actually requires a bit of brain power. This applies even if the percentage off would yield a bigger savings.

Beyond dollars or percentages off, test other types of offers. Your creativity is the only limit. Send several different email offers and track them so you know what works best for you. The response rates vary for email offers due to all the different variables in sending an offer. Some send an offer just valid for one day (snow storm, Super Bowl) or a certain time of day (lunch) - doing so may reduce the response but it motivates your customers to come in when you would otherwise be slow.

Advertising is salesmanship.

Here's a great tip from marketing expert Tom Feltenstein.

"Every marketing technique should employ complete salesmanship and be evaluated like a salesperson on a draw against commissions. Is it paying for itself, or is it a drain on cash flow? Everything must justify itself or be replaced. Advertising and marketing are, in fact, highly leveraged (or inversely leveraged) forms of multiple salesmanship. If an individual salesperson doesn't produce, that costs money, but it's not fatal. Ads, commercials, or sales letters that fail can cost you your business. At best, they cost you the near certain possibility of more profits."

You are not an entertainer

When crafting ads, commercials, mailing pieces, and sales approaches, seek profits, not applause. Most companies try to be aesthetically appealing, at the expense of results.

Test! Test! Test!

You must put the question to an empirical test and let your market tell you what products, prices, packages, pitches, offers, and guarantees are most or least appealing.

When you test one approach against another, they produce widely varying results. One ad may produce widely varying results. One ad may produce 10 times the results. One sales approach or presentation may result in four times as many sales as another. You’ll only find this out if you test.

This must never be predetermined by conjecture. You must analytically test various premises and run with the winning approach, not, just the lesser performing ones you personally like the most.

Compare

Factual comparisons between your products and service and the other guys' is fair play and helps consumers make smarter choices. It's not necessary to name names. Simple statements of comparison get your point across.

Consider the headline, "FACT! Some Pizzerias Use Frozen, Weeks-Old Dough!"

Ouch! Along with an explanation of how yours is made in-house, fresh daily, this tactic hits like a sledge hammer. It instantly makes readers question the practices of all other pizzerias and puts you in a more favorable light.

Offer more service

People are fundamentally selfish:

"The prospect doesn't give a damn about you, your company or your product, All that matters is, 'What’s in it for me?'" Bob Hacker.

Most marketing and advertising tells the prospect, "Give me the business you've been giving to somebody else," or, in essence, "Let me make the money instead of my competitors"!

You must educate and inform the customer about your product or service; its construction, advantage, warranty, and comparable performance against other brands, etc. Offer the prospect the chance to test (or try out) the product or service at your risk, not theirs.

Ask Questions

Is it their first visit? You won't know unless you ask! Do they like their food? If not, how can you make things right so they return? Simple questions give you "advertising ammo" that you can turn into profit… but "you gotta ask!"

Signage Counts

Crummy looking hand-written or amateurish computer designed signs shout, "poor quality here!" Replace them with attractive, more business-like versions that reflect your commitment to professionalism. Yes... it really does matter!

Tell them WHY to Visit

Can you think of 12 good reasons why people should visit you over your competition? Then tell them in a series of consecutively numbered ads. Your headline follows this simple formula: "12 Good Reasons to Bring Your Car to PitStop for Your Next Oil Change: REASON #1: We Get You Out in 30 Minutes—Guaranteed!" Then simply fill in the details. Your next ad is #2, 3, 4, etc. in the series. This kind of advertising has a strong psychological "piling on" effect that's grounded in numbered facts... and is very credible.

Fill the Voids

With each check or receipt you give your customers, also hand them a stamped postcard with several questions asking them about their experience. Include the powerful question, "What DON'T we offer that you wish we DID?" Enough similar responses point to new products and services that your customers are telling you they want to buy! See the potential?

Think Like a Fish

There was recently a great story in a Long Island, NY newspaper about a man who claims to be the "World's Best Fisherman." And he just might be. That's because he catches more fish with his simple rods than most commercial fisherman do with all their fancy, expensive gear—and he's been doing so for decades! When asked, "How do you do it?" he said, "Simple. Most fishing gear is designed to get fisherman to buy it. But I don't think like a fisherman… I think like a fish!" He knows their habits... where to find them... when they feed... and what they eat.

What a great business metaphor! You know your customers better than anyone. So when making an offer, don't think like a salesperson... think like a customer! This simple mental shift gives you a far better understanding of how to hook them with your offer.

Embracing Lifetime Value

The below is from Seth Godin's blog. Godin is author of ten books that have been bestsellers around the world....

If you walk into a company-owned cell phone store to sign up for a contract, what are you worth?

Given the huge gross margins at AT&T and Verizon and the standard two-year contract, I think it's easy to figure on more than $2000 in lifetime value.

If you ran a business where a customer represented an additional $2,000 in profit, how would you staff? How long would you make someone wait? If staff costs $25 an hour, how long would that extra person take to pay off?

Few businesses understand (really understand) just how much a customer is worth. Add to this the additional profit you get from a delighted customer spreading the word--it can easily double or triple the lifetime value.

So, a chiropractor might see a new patient being worth $2,500, easily. And yet... how much is she spending on courting, catering to and seducing that new customer? My guess is that $50 feels like a lot to the doc. Instead of comparing what you invest to the benefit you receive from the first bill, the first visit, the first transaction, it's important to not only recognize but embrace the true lifetime value of one more customer.

Write it down. Post it on the wall. What would happen if you spent 100% of that amount on each of your next ten new customers? That's more money than you have to spend right now, I know that, but what would happen? Imagine how fast you would grow, how quickly the word would spread.

Here's how you'll know when you've really embraced this--a good customer at your podiatry practice (or supermarket or tax firm) walks out the door in a huff and you turn to your partner and say, "There goes $74,000."