Coupon Books Shift From Turnstile to Grocer
The books, marketed under the brands of college and professional sports teams, now reach hundreds of thousands at the grocery store instead of tens of thousands at sports events. Furthermore, Promark promises that every cent of the $1 price of the coupon books goes to charity.
Gary Ravet, founder and CEO of Promark, La Jolla, CA, considered selling the company and retiring to philanthropic pursuits in October 2002, having built a successful discount book company. Promark's business model was to design coupon books for sports organizations, which would offer advertising opportunities to its sponsors.
The company gave teams the books for free, and the teams in turn would let Promark use their logo and would distribute 50,000 to 100,000 of the books at games. The books carried advertising from a mix of national league sponsors and local team sponsors, who paid for the ad space and tracked response through coupon returns.
"It's not all about just being associated with a brand," Ravet said. "You have to show sales."
Promark's distribution grew from 300,000 in 1999 to 3 million in 2000, 8 million in 2001 and 11 million in 2002. This year, the company expects to distribute 20 million coupon books.
But Promark is proceeding under a new business model, which Ravet has dubbed the "Making a Difference Savings Book" program. In the new model, sports teams give the books to their grocery partners, which offer them to consumers at checkout for $1. Proceeds go to local youth charities sponsored by the teams.
One might think consumers would be loath to pay for a coupon book they once got for free, but Ravet expects a rise in circulation. Whereas a local football franchise might draw crowds of about 60,000 each week, the grocery retailer draws millions.
Promark has even cooled off the distribution ambitions of some partners to ensure that circulation, and thus response, is accurately measured, Ravet said. In one case, a Miami franchise's grocery partners estimated they could sell 1 million books in a year, but Promark gave them only 400,000.
"We don't want excess pieces distributed," Ravet said. "The circulation is known. We get affidavits from each team that show how many books got distributed."
Charging consumers $1 makes it more likely they will hold onto the book, as opposed to a free book they are apt to forget and lose or throw away, Ravet said. Furthermore, distribution at grocery stores assures advertisers that the books go to important women consumers.
"It gets home now," he said. "It's getting into the hands of primarily a female consumer now."
Promark is shifting its resources entirely to the "Making a Difference" model and plans to cease free distribution of its coupon books by January. Acceptance of the program by sports franchises has been widespread, Ravet said. For example, all but three of Promark's 16 National Football League partners accepted the new model, he said.
"From a team standpoint, you still receive a great quality piece," he said. "You have a vehicle that you can take to your grocery partner and give them something that achieves traffic and sales."