Doughnut Coupons Soak Up Sales

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A 20-page coupon booklet distributed in early January to more than 5.5 million households in the greater New York area contributed to a sales increase for Dunkin' Donuts stores during January and February, the slowest months of the year for the chain.

Sales at New York-area stores rose 6.4 percent in January and 3.5 percent in February from those months in 2002. The gain built on January and February 2002 sales that were up 15.4 percent and 10.1 percent, respectively, from 2001, aided by a similar booklet.

"Our franchisees saw it as a success because who knows how things might have been without it," said Alan Wayne, field marketing manager for Allied Domecq QSR, parent company of Dunkin' Donuts, Randolph, MA. "You have to remember that the weather was a lot worse than last year with all the snow we got. We got used to having mild winters, and this past winter changed people's patterns. They would come home immediately after work instead of stopping at Dunkin' Donuts, or they wouldn't stop there in the morning on the way to work.

"You can't beat something being sent right to the customer's house. You can touch it and feel it, and it gets direct action from customers. It's basically a 'thank you' to them that comes after the holidays."

Some coupons appeared multiple times, and a page containing three coupons near the back of the booklet provided offers from Baskin-Robbins -- a new feature incorporated into this year's effort. Dunkin' Donuts and Baskin-Robbins are subsidiaries of Allied Domecq.

"We met with an advertising committee made up of franchisees to talk about which offers work," Wayne said. "We also discuss profitability and margins as well as look at past history. Since we did it last year, we knew which ones were the most redeemed."

Among the coupons most frequently redeemed were a 99 cents for three doughnuts option and an offer of six free doughnuts with the purchase of six doughnuts.

"January is not only when we have the lowest sales volume, but it's also when people are dieting and the weather is bad, so we wanted to give customers an extra reason to come into the stores, given those obstacles," he said. "The booklet saved the day in terms of getting customer counts into the stores. We're looking at doing multiple drops throughout the year based on its success."

Distribution involved USPS bulk mail for areas in which a newspaper insert would be ineffective.

"We used a distribution company to handle this, and we provided a store list to them of Baskin-Robbins' approximately 300 points of distribution in the area and Dunkin' Donuts, which has about 850 points of distribution in the area," Wayne said. "Some of the Baskin-Robbins shops, about 200 of them, are under the same roof as the Dunkin' Donuts."

Another 150,000 people received the booklet who signed up for last year's contest to win a trip to Universal Orlando. This year's Universal Orlando promotion was enhanced with a mention in the booklet, directing customers to visit a location where they could fill out a form to enter between Feb. 17 and March 31.

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