Couponing and FMCG

by jenny_myers on 16/11/2012

Couponing and vouchers are more popular and more necessary for families than ever before. The impact of the recession on many families has seen FMCG brands witness a new era of couponing – with shoppers ensuring that every penny that can be saved on the weekly or monthly shop is.

Before this return to austerity, couponing and DM was resigned to the back shelf of the marketing mix portfolio for brands. Why would a large innovative brand send out a dusty piece of DM with an open rate of 1-2%, when they could be producing large scale digital campaigns?

Well, the answer is in the sales.

Door drops are an environment like no other in the marketing mix. They can provide brands with the creative freedom within a targeted environment that no other media can deliver at the same price. By using this medium, brands can reach a large number of shoppers with a compelling message, drive commercial trial and sales volumes, whilst making their budget work hard for them in terms of ROI.

An example of where this media really worked can be seen in a recent FMCG brand door drop that we put together. In a low involvement category, where shoppers are on autopilot, the challenge to increase penetration across a newly positioned product was a challenge. Due to these barriers and after careful consideration, SMP devised a door drop campaign with a MONP coupon.

This door drop allowed for specific targeting of pre-identified audience segments allowing the brand to converse directly with the shopper in an uncompetitive space with the coupon driving the shopper to store to trial the product – therefore providing the consumer with a full ‘sofa to store’ experience.

However, the key to a successful door drop campaign is in the targeting.

Without the rigorous targeting analysis and identification of individual households within specific geographic areas, the level of redemptions and engagement will inevitably be poor.

By using the various tools available to achieve tight targeting and to ensure that the most responsive shopper would be identified, SMP and The Letterbox Consultancy cross referenced TGI data analysis (including our bespoke promo signatures tool) against MOSAIC profiles based on the brands shopper insights.

At this point, it was possible to design distribution clusters made up of postcode sectors in appropriate volumes, minimising wastage and offering the client the most efficient route to their target households.

Along with strategic targeting is the value of the coupon. The coupon needs to appeal to the shopper enough for it to change their behaviour at the point of purchase. With this particular category aisle commanding only a 30 second dwell time, changing shoppers learnt behaviour is a task in itself! By leveraging the creative look and feel, underpinning the new positioning of the product, along with a 75p coupon (around 25% off) the activity provided an easy and compelling way for the shopper to try a new product.

And… the results spoke for themselves!

The activity gained a coupon redemption rate of 8% (smashing the industry standard of 3-5%) as well as contributing to an increased penetration and share of the market. Finally, it also delivered a fantastic Silver IPM Award for SMP!

So, any FMCG brands who might feel that door drop and couponing is something of the past – they may want to reassess.

In a brave new world of digital consumption with traditional print being disregarded by marketing planners – a brand who embraces targeted print will find that their message doesn’t have to compete as hard to be heard!

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{ 2 comments… read them below or add one }

Claire Holliday November 21, 2012 at 12:23 pm

Indeed great results from a redemption point of view – although would be interesting to know which other categories are feeding into the industry standard being benchmarked here (my thought is that toilet tissue as a category is a very high penetration category, so has a head start with consumers if benchmarked against other categories like body lotion). Also are there any techniques used to isolate whether or not the sales or indeed new trialists could be considered incremental vs what would have anyway been achieved in stores through promotions? If we can get beyond the pure redemption numbers into incrementality, it becomes a lot more of a meaningful evaluation…

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jenny_myers November 21, 2012 at 5:51 pm

Thanks for your comment Claire and I agree that evaluation should not just be confined to the response of the coupon. Just to answer your points, the industry standard I was referring toat 3-5% was in terms of door drop response rate rather than a specific category coupon redemption level. In terms of coupon redemption rate, we estimated this would redeem at around 6% and so the activity did still exceed the benchmarks set. In terms of analysing incremental sales through media type i.e. comparison between door drop vs. in store promotion (I think this is what you are referring to?), this is difficult to prove. However, this particular activity not only needed to drive penetration but it also needed to educate the consumer on a new product positioning and name, something that couldn’t be achieved merely through price discounting.

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