Industry Chat: Brand-oriented coupon management
We are currently living through tumultuous economic times. Consumer prices have been increasing at rates that have not been seen in decades. Foremost this affects consumers and customers as they have to make tougher choices about where to spend their disposable income (or save for even tougher times).
Such an environment forces marketers to be highly alert and listen very closely to the needs of the prospects and customers, who continue to tighten their wallets.
One focus area that has often been overlooked in the past: Excellence in offers and couponing!
Our expert on this issue: David Goy – vchfy
Let us introduce to you David Goy from vchfy.com. We have discussed the trend of brand-oriented offers and coupon management, why it is particularly relevant today, best practices on how to create an excellent couponing experience, and its benefits for your business.
First and foremost, why is brand-oriented offer and coupon management so relevant today?
As you mentioned in the introductory statement, growing inflation has potentially huge effects on consumer behavior: They reevaluate already planned purchases, they reduce average baskets, they trade down, which means switching to private-label brands, and they spend more time looking for deals and bargains, especially when shopping for brands, high-priced goods or search-intensive products.
Particularly the latter two behaviors underline the importance of why brands need to be there for their clients with effective coupon and offer management. First, nothing hurts long-term profitability more than decreasing customer loyalty and lifetime value. Particularly established brands hardly earn their money from first-time buyers, who then switch to private label businesses, but from those clients who return for repeat purchases. Second, whether brands and retailers like it or not, customers will be searching for bargains, coupons, and offers a lot more than they used to – not to trick or outsmart the retailer, but just out of economic necessity due to tightening wallets. And brands have to be there to tell their clients: We hear you. We understand you. We have something to offer you.
What is limiting brand-oriented offer and coupon management today?
The most important reason is the brands themselves, and I understand them perfectly well. Couponing for a long time has been associated with inviting prospects who will hardly become profitable long-term customers. The prototypical coupon hunter persona was someone, who does not care about the brand, is unwilling to enter a long-term relationship with a retailer, and will always opportunistically choose the cheapest offer on the table. And there is some grain of truth to this perception as the way the industry and brands dealt with couponing catered at least a little bit to creating this caste of shady bargain-hunters. Customer journeys for couponing and bargain hunting were often dislodged from highly brand-curated content and outsourced to parties that particularly focused on people who always look for offers and bargains. It seemed a bit like: “Ok, we don’t want couponing to be part of how we run our brand, but we have to do it anyway, so let’s see how we can have the cake and eat it, too”. Marketers just did not like very much that offers and couponing is an important aspect of a brand experience that needs to be integrated into the overall brand experience and journey of customer-brand interaction.
Another reason is the lack of support from the industry with the right tools to help brands establish brand-focused offers and couponing experiences that create beautiful and profitable interactions with loyal brand lovers and those who are more likely to switch between brands for better offers. I was in the same situation as the head of marketing for a large fashion brand. We knew that we needed to combine offers and couponing with the overall brand experience, particularly for our brand-loving clients but we did not like the way bargains were distributed besides our own CRM channels. And that’s why we created our own solutions, which ultimately lead to founding vchfy.com and helping similar brands all over Europe today.
What brands should particularly be concerned with their offer and coupon management?
There are four important questions that any brand can use to evaluate the immediate need to deal with how they do offers and couponing:
· Are purchase amounts and frequency in my category affected by current inflation trends?
· Are there white-label or no-frills competitors in my industry that compete with my offering?
· Do my existing customers use and positively respond to CRM-based offer programs and coupon activities?
· Have I thoroughly assessed how I can align and integrate my offer and couponing managened with my brand and its values?
If you answer any of the first three questions with “Yes” and the last questions with “No”, then you definitely need to be concerned with your offer and couponing management. And I would strongly recommend that you review how you can create meaningful and brand-oriented experiences, particularly for your existing and profitable customers.
How do brands actually create an effective offer and coupon management?
Well, in the beginning, brands and retailers need to make certain strategic decisions:
· What are the goals of my offer and couponing business and what are the priorities for these goals: Create new customers, increase revenues, increase customer loyalty, increase customer profitability, maintain, and build brand equity?
· What is the business case for my offer and couponing business, what resources can I allocate to managing and developing it, in terms of money and in terms of marketing and IT-personal?
The next step is creating control. This is the most important aspect and the fundamental building block of an effective offer and coupon management. What does that mean? It means that a brand should always closely manage and maintain how its customers experience the brand – and this – most importantly – also goes for any offer and couponing experience. While brands may already have established such control for CRM channels, there is much room for improvement with regard to other important channels, mostly SEO and SEA. Here, brand-related offers and coupons are often experienced in unfavorable conditions (e.g. no or invalid campaigns) and in unfavorable environments (e.g. visible competitor offers, non-brand styling, and design). And this is something brands have to confront quickly.
Why is the affiliate network a good place to build an effective offer and couponing management?
You are experts in the affiliate industry and you have accompanied brands and retailers in creating effective marketing for many years now. Brands and retailers trust the support, validation, and campaign exchange mechanisms that affiliate networks can provide. Solutions like vchfy build upon these trusted and established relationships both technically and personally to create smooth and efficient onboarding experiences that quickly generate value for our clients and that transparently document this value during the collaboration.
Our experience in the past has shown that a good partnership between the brand or retailer, the account manager at the network, and our customer success experts’ area very good indicator of successfully established best practice in brand-oriented offer and coupon management.
What are the first steps that brands need to take to create an effective offer and couponing management?
Probably the best advice we can provide is to speak with your Tradedoubler Account Manager about how you can align your offer and couponing management even better with your brand goals. As experts on both the industry and your data, they can determine which solutions may best help your offer and couponing business and get you in touch with partners that can assist you in creating the right tactics and provide you with the right tools.