The Lure of the New

by on 25/10/2011

Everyone looks for novelty, the latest smartphone, game console, clothing or web site. And novelty is good if what you seek is entertainment. However, marketing investment is actually not about entertaining Marketing Managers it’s about reaching, and impacting on, shoppers.

The trouble with trends, and moving on is that completely new is not necessarily better. In fact often improvements to what already exists is a better fit . But against the lure of the new, it becomes hard to recognise the strengths of what you have.

This is exactly the case with couponing. From a peak in the mid 90’s companies switched to store discounting. It was easy, and Sales Departments delivered volume growth at the push of a button. Only one small flaw. 15-years down the line we recognise that instead of bringing the right sort of customer into the brand it delivered customers who found a switch two weeks later only too easy.

The current position is that 80%1 of companies polled this year say that trade spend in this way is too high. And companies can’t see their way forward to an alternative. In recent polls the IPM (Institute of Promotional Marketing) carried out, 78% of companies said that pulling back from price discounting was high or very high on their agendas. Exactly the same percentage  of agencies reported that they often, or all the time, discussed alternatives to price discounting with their clients.

Well, one way forward is to look back.

Since the mid 90’s couponing has grown up. From a discipline that was used as a shotgun, it changed, and is now able to target very tightly indeed. The latest white paper from the IPM “In Place of Price” points out that targeted couponing is a proven add-on to above the line, easing trial for products without obviously degrading the product image at retail.

Tesco and Sainsbury have both re-discovered couponing themselves, in fact between discounts they are now expecting brands to offer couponing as standard. However, they focus only on their own customers, and, as with their discounting, the approach they take ignores completely the fact that their supply systems are not attuned to supplying their shoppers needs.

During price discount activity (when they try hard) as the latest paper by ebiquity for The Grocer points out. “71% of suppliers reported increasing funding demands, but only 17% reported an increase in off-shelf availability (let alone on-shelf CH comment!). For couponing they issue millions of coupons, and do nothing about their supply. Forcing loyal customers facing empty shelves, to buy the competition.

Targeted Couponing

Brands managing their own couponing can spread the demand across time, AND reach stores serving the right people, in the right place.

When only 24% of brands report they have a plan in place to combat what became the rage in the mid-90’s the search for alternates needs to revisit household targeted couponing, A once-only incentive, building brands independently of retailers.2

Over the next few months (from July 2011) the IPM are running trials across a range of products to demonstrate what couponing can achieve as part of an alternative structure.

It is past time for a change for the better, and for many brands and agencies, new couponing should be on their shopping list.

Colin Harper
Head of Insight –  Institute of Promotional Marketing
Managing Director – Storecheck Marketing
1Ebiquity Grocer poll 2011  2IPM Poll July 2011

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– who has written 57 posts on Letterbox Consultancy for Door Drop Marketing.

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