Combining Offline and Online Coupon Strategies

George F. Colony, the president of Forrester Research Inc., recently asserted that the most successful companies of the near future will be what he terms “new hybrids” — not simply bricks-and-mortar retailers or dot-coms, but businesses that combine the strengths of both and think across channels and boundaries in innovative ways.

He contends that because consumers have an increasing abundance of purchasing options, companies that find ways to sell their products to potential customers, wherever they are, will have the most success.

This hybridization process applies to the future of direct marketing as well. Direct mail coupons, online coupons and targeted e-mail promotions each have a strong stand-alone value proposition, but combined, their power increases exponentially. Successful marketers of the future will be the ones that recognize and leverage the strength of each media to create a powerful integrated, cross-channel distribution network. To maximize the effectiveness of an integrated strategy incorporating print and online coupons and e-mail promotions, it is important to first understand the individual strengths and applications of each approach.

We know that saturation direct mail is an effective and economical way to market products and services. A recent study by the Direct Marketing Association concluded that every dollar spent on direct mail advertising results in an additional $11.50 in sales, making it a better investment than telemarketing and magazine and television advertising. Studies also show that consumers like receiving direct mail coupons and want to receive even more. While direct mail is a valuable tool to increase sales, it also can be used effectively to introduce a company to consumers and help build brand awareness.

According to a November 1999 NPD Online study, nearly one-third of Internet users clip and use online coupons; 59 percent are aware of online coupons, and of those people, 80 percent say their usage will rise in the future. By the end of this year, it is expected that 50 percent of the U.S. population will be online, meaning online coupon redemption will continue to grow.

Online coupons can be highly targeted to meet consumers' lifestyles, purchasing preferences and geographic locations. When consumers register on the site, they provide personal demographic data as well as identify the products and services of interest to them and their households.

This permission-based marketing approach means that every time members visit the site, they will be presented with categories of offers that are dynamically generated based on their demographic profile and preference. According to Jupiter Communications Inc., less than 40 percent of online advertisers use geographic data to target consumers. But we have found that using geographic data has a distinct advantage in driving redemption rates. Members enter their ZIP code when they register for the service, enabling us to send them offers they want from merchants within a certain radius of their home or office. Not only are these online offers highly targeted, but they are available to consumers at any time, at home, at work and while they travel.

E-mail promotions also give online coupons more power, boosting customer retention and increasing sales. In fact, a recent study by Forrester Research projects that by 2004 marketers will send more than 200 billion e-mails, creating a $4.8 billion e-mail marketing industry. While it is up to the consumer to seek out online coupon sites, e-mail messages offer a supplement to your marketing efforts. And with e-mails, you reach out to people who have given their expressed permission to receive your offers. These e-mail messages are as close to a one-to-one marketing relationship as you can get.

Any marketer or small business owner not taking advantage of affordable online strategies to complement their direct mail program is missing a golden opportunity to reach even more customers and maximize their business' overall potential. By integrating the key strengths of each media, a marketer can reinforce relationships with customers and create new ones. Here are a few examples of how using an integrated strategy can maximize the effectiveness of your marketing efforts:

* A saturation mailing reaches homes in close geographic proximity to area businesses. For example, an automotive lube shop takes advantage of an integrated marketing approach. First, it sends a direct mail coupon to 10,000 homes surrounding the business to attract as many local customers as possible.

By posting an online coupon, the auto lube shop can greatly expand its potential customer base and introduce its service to consumers who work nearby or are traveling in the area. To attract consumers who do not live near the establishment, the shop could also increase the amount of the discount to give them an extra incentive to travel further. The shop can also vary its offer to target specific demographic groups.

* A combined offline and online marketing approach can bring new customers through its doors and build brand awareness. More compelling is the fact that offers can be targeted to consumers based on interest and relevancy so they are more likely to act.

* Online tracking can tell businesses what offers work best and analyze consumers based on their geographic location, demographics and lifestyle and purchase preferences. This data gives marketers more information about which consumer groups are interested in purchasing their products and where they are located, enabling them to pinpoint their direct mail efforts more precisely.

It is easy to see that by combining online coupons with a direct mail coupon strategy, you can expand your promotions, make them more flexible and accessible and capitalize on the strengths of each marketing approach. Direct mail coupons have proven to be very effective in driving readership and response. Online coupons and e-mail messages enable a business to expand and build on those relationships and provide a new outlet to promote products and services. By leveraging an integrated strategy, you can attract more customers, develop closer relationships with your customers and increase revenue for your business.

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