Why coupon brand Valpak added a daily deals service

Coupon company Valpak recently launched ValpakDeals.com, a service that offers daily deals and local offers to shoppers. The online initiative highlights the company’s multifaceted approach to marketing: local and national, and using direct mail, print, online and mobile to deliver its offers. Direct Connect spoke with Jay Loeffler, corporate strategy manager in Valpak’s marketing department, about the coupon space for the holiday season and beyond.

Direct Connect: ValpakDeals.com is one of a number of new coupon sites offering daily deals on the Web. Why is this so hot right now?

Jay Loeffler: The whole daily deals message really exploded because it was where consumers were at a particular time. They were demotivated to spend money, and businesses were trying to keep the lights on by bringing people in the door. When you could offer a steep discount to get them to start spending money again, it was a perfect blend of what consumers were looking for and what businesses needed to sustain themselves through the economic downturn.

It created a cult-like following. Some people can’t even turn their computers on without checking for what’s the best deal in their area. Then you have the younger generation, and that’s just how they like to consume information. Our research shows that Millennials like experiential marketing; they like the approval of other people. So passing these daily deals around is really playing on that psychographic buying behavior of this new generation.

Direct Connect: What’s the next step for online coupons?

Loeffler: I think the space is going to continue to be very robust. There are very limited barriers to entry, but Valpak has strength in this because we really make it a multifaceted media solution. There is a lot of research out there that says mobile is set to explode. But if you look at that space, it’s still considered intrusive to receive marketing that way, though I do think it’s going to become a much bigger space as far as how consumers get information and make purchase decisions.

Direct Connect: How does the space look going into the holiday shopping season? Are budgets still dominating consumer decisions?
Confidence levels and consumer expectation levels are starting to approach pre-recession levels, but that mentality of cautious optimism is still there and it really needs to be stimulated. What we’ve found is that advertisers can’t be timid with their offers. They really need to start promoting aggressively.

Direct Connect: How should advertisers structure their offers to appeal to consumers over the holidays?

Loeffler: Focusing on necessities and discounting things consumers need to maintain their lifestyle is something we’re finding to really be a powerful motivator on the local level. Extravagant purchases have kind of been curbed, but things like car maintenance, or smaller home improvement projects like a kitchen repair, are still driving purchases, even during the holidays. If we can get offers that are appealing enough to get consumers to come in for a product they wouldn’t have necessarily purchased, we can upsell them while they are there.

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