Why Consumers Want Coupons — And What Kind They Value Most
Photo above by Joshua Rawson Harris.
Amid ongoing reports of consumer fatigue with coupons and declining coupon redemption rates, there is a ray of hope for retailers—mobile coupons. While consumers have a wide range of preferences in terms of their mobile engagement, CodeBroker’s mobile consumer research, based on input from more than 1,500 consumers around the country, offers one takeaway that applies to the masses: Mobile couponing works. There are a variety of reasons that this is the case.
Ready Access Drives Results
Consider the way traditional coupons have worked. Consumers would receive or find the coupon, put it somewhere, then later while in a retail setting either remember the coupon and frantically search for it (often finding that they’d left it at home), or forget entirely that they had a coupon in the first place and never make the purchase.
Not having the coupon available when they needed it is, in fact, one of the biggest drawbacks to coupon use, consumers say—77% indicated that they didn’t have coupons available to them when needed. The other 23% of respondents expressed frustration that they didn’t have coupons available via their smartphones. Considering the widespread adoption and virtual 24/7 connection with smartphones, mobile couponing makes a lot of sense.
For retailers, couponing success is all about ensuring ready access at the point in time when consumers make a purchase decision.
Consumers Respond to a Sense of Urgency
Unlike traditional coupons, mobile coupons can create a sense of urgency and can be strategically delivered to consumers to drive real-time behavior. In fact, mobile engagement research shows that mobile couponing strategies designed to drive consumers to in-store deals can be particularly effective.
Sixty percent of respondents indicated that they would respond to a mobile coupon within just one week. Perhaps even more compelling, 25% say they would redeem coupons received via text message within three days.
Creating that sense of urgency can be driven through delivery via text message or email (preferred by 34.85% and 35.24% of consumers, respectively) and limited-time offers.
How consumers prefer to receive mobile coupons from retailers. Source: CodeBroker
Exclusivity and Scarcity Drive Action
Not just any coupon offer will drive sales, though.
One important finding points to exclusivity as a driver of consumer purchase behavior. Receiving a coupon that is only intended for them based on signing up to be on a list or past purchase behavior is compelling. Of those surveyed, more than 60% say they’ve opted into a text messaging marketing list offering a coupon. Even more striking, 100% of millennials say they have done this.
Another drive of positive purchase behavior—single-use coupons. Perhaps counterintuitively, consumers indicate that they prefer single-use coupons that offer higher redemption value over lower-value coupons that can be used more than once—77%, in fact, indicated this preference.
The idea of scarcity also drives action and is a proven marketing strategy based on the economic principle of supply and demand. The lower the supply, the higher the demand. This applies to coupons as well as physical products. The power of scarcity represents a double benefit for retailers—an opportunity to drive action and the ability to lessen bottom-line revenue impact from consumers who use coupons over and over again.
Overall, coupon offers are the most valued text messages that consumers say they receive from retailers—at 53.29%, compared to general sales or discounts, the second highest source, at 34.82%. The key takeaway here is that today’s consumers want to feel special. When coupons are delivered to them through their channel of preference, for products that they highly value, they’re exceedingly likely to take prompt action.
One final data point: When asked, “If a retailer that you shop with regularly sends you a high-discount coupon for a product that interests you, how likely are you to use that coupon?” 99% of respondents said “yes.”
Coupons are still a very viable way to drive consumer purchase behavior, but their form and function have changed dramatically from the days of coupon clipping. Today’s consumers value the easy access, personalization, and time-sensitive options that savvy marketers are using in a mobile-first market.
Dan Slavin is CEO and co-founder of CodeBroker.