Monday, June 8, 2009

Use Bounce-Back Coupons

In Making Money Is Not Illegal, Immoral, or Fattening, Art Freedman talks about using bounce-back coupons:
"A bounce-back coupon that works very well for us is 50% off any single item that retails for under $30. Now think about what I’m suggesting here. How much would you pay a customer to walk every single aisle of your store? Think about the customer who comes into your store, goes right to a specific aisle, picks up exactly what they came in for, and leaves without any real idea of everything else you stock. The bounce-back coupon gets your customers walking up and down most aisles in your store looking at your product selection because they’re trying to figure out how they’re going to use their 50% discount. We find that about seven out of every ten of those customers with the coupon also buy something else, and at the margins we’re carrying, we’re really not losing any money on this. The fact is we’re getting more customers in, so we’re increasing sales right then and we’re building knowledge in the customers of all the different things we can sell them.
"We use the bounce-back coupons about four times a year because we think you can wear it out."
Historically, only about 2% of discount coupons distributed by retailers are ever redeemed. One reason: According to researchers at University of Alberta and University of Manitoba, shoppers have been concerned that if others see them using low-value coupons, they'll be considered as poor or as cheap. But a 50%-off bounce-back coupon is not low value! And in any case, things are changing. IRI finds that about 63% of American shoppers are taking their coupons with them.
Today's an excellent opportunity for you to lay out your plans to use bounce-back coupons.

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