Discount mindset drives marketer deals
Discount mindset drives marketer deals
Two years of deal-seeking and a faltering economic recovery mean consumers won't stop looking for discounts, and offline deals will remain an important tactic for marketers, say industry experts.
"It really doesn't matter whether you're shopping for Crest or shopping for a car; value consciousness in this country is not going to go away anytime soon," says Michael Kowalczyk, VP and general manager of in-store marketing for marketing services company Valassis Communications. Kowalczyk is among the industry observers who contend offline discounts will remain integral even if the economy improves.
Recent predictions of a double-dip recession make it clear that bargain hunting is here to stay. That frugality trend is evidenced in coupon-use statistics, with Kowalczyk saying in-store coupon use is at "an all-time high."
According to consulting company Inmar, coupon redemption held steady in 2010 compared with 2009, with 3.3 billion consumer packaged goods coupons redeemed. Valassis' NCH Marketing Services reported that US shoppers saved $3.7 billion with coupons last year, a 5.7% increase compared with 2009.
"Freestanding inserts in particular and 'offline' coupons in general continue to represent the lion's share of all coupons," says Bob Carter, Inmar's promotion services president.
In Detroit and Chicago, car dealers are finding success with direct mail that carries the discount message. Save On Cars & Trucks is a monthly insert mailed with Valassis' RedPlum cooperative mailing and targeted to specific ZIP codes.
With newspaper circulation way down, dealers of "cars and trucks have been looking for a way to get into the home," says Mike Gauthier, CEO of Save on Everything. "Couponing's working right now," he says. "It's one of the two things that are functioning for our customers, that and the Internet."
Save On Cars & Trucks, an extension of Gauthier's Save on Everything mailers, goes to 1.4 million homes in Detroit. Gauthier says he plans to expand a 200,000 circulation Chicago-based insert launched in April to 1.7 million this year.
Results from the monthly mailer have been good, say Scott Landis, general manager of Elder Ford in Troy, Mich. The auto dealer tracks response through metered phone numbers.
"The week [the Save On Cars & Trucks promotion] runs, we get somewhere around 100 calls," says Landis, who estimates about 10% of those translate to sales. Landis says that the market saturation of direct mail is important and local TV ads for the circular highlight some of the deals and help with brand recognition.
Gauthier plans to bring the Save On Cars & Trucks program to Minneapolis and St. Paul in September, and expand it to Utah as well. He also launched a separate program called CARS (Complete Auto Response System) this spring consisting of solo mailings, as well as inserts in the Save On Cars and Trucks mailing.
Even affluent consumers continue to look for deals, and as a result, high-end businesses that wouldn't have considered couponing in the past are now doing so, says Philip Ellington, a Valpak franchisee in southwest Florida. "After the world melted down in September 2008, a lot of people realized that this recession really hit deep," he says. "Our clients are embracing incentive-marketing couponing as a way to get people in the door, and potentially upsell them."
Marketers new to the Valpak envelope in his area include high-end restaurants and car dealerships. "We had always shied away from using coupons and Valpak," says Jack Serfass, co-owner of the Florida restaurant Naples Tomato, which used multiple marketing channels including TV and radio commercials, social media, newspaper ads and lifestyle magazines.
"As the economy started to degrade, we started to do more with coupons," he said, adding that the Valpak offer brought in a more affluent clientele than other discounts.
Serfass says segmenting and data analysis helped target a well-to-do clientele and find the most successful offer. He adds that using circulars to provide information about non-discounted services, such as the restaurant's brunch has also been helpful.