Tuesday, July 19, 2011

Coupons, Discounts and Freebies; What you need to know when cutting your customers a deal

I love a deal. With inspiration from TLCs Extreme Couponing show I've ramped up my discount hunting, hijacked my husbands old baseball card binder and replaced rookie cards with sleeves and sleeves (and sleeves) of coupons.

Since I have a child about to enter Kindergarten my name must have been added to a list that caters to moms with school-aged children. In my mailbox I received what seemed too good to be true: a gift card equaling $20 CASH to Sports Authority.  The card had qualifying dates and could not be used towards clearance items.  After reading all the fine print I realized I was about to go shopping!

Critics of extreme couponing will say that folks get sucked into the frenzy of saving money and start to purchase things that they don't even need. For example, on one episode I saw a woman walk out of the store with a grocery cart full of FREE pet food after utilizing her coupons (she didn't have any pets).  Yes, this is extreme.  Is it wasteful?  Well, lucky for a local pet shelter, the extreme couponer in mention donated the goods.

I don't usually shop at Sports Authority. Probably only been inside a handful of times.  But to spend free money?  I was in.  My goal was to try to find something useful to me or my family that we needed.  This summer I started working out with a personal trainer and I was graduating up from my 3 & 5 lb weights and needing 8lbs. Great! Now I knew exactly what to spend my cash-card on.  Off to shop...

Screech!  (that was the sound of my shopping cart slamming to a complete stop).  While Sports Authority did a great job of getting an infrequent customer through their doors, they solidified that I probably won't ever go back.
    Sports Authority 8lb weights                     Target 10lb weights                   
       $    29.99/pair                                     $13.99/pair

What's wrong with this picture?  For heavier weights in Target I could spend $16 less?  Needless to say, I did not purchase the weights in SA.  I shopped the sale racks and walked out with two T shirts using up $18 out of $20 allotted from my free cash card.  Then I bolted over to Target to purchase my weights.

A few things to keep in mind when you are looking to offer coupons, discounts, freebies to your customers:

  • Do your research.  Offering discounts to infrequent customers is a sure way to get them through the door, but if the experience isn't stellar once you have them, they aren't going to come back.  And you've just operated at a loss.
  • Know who your customers are.  Not many Kinder-gardeners need major sports equipment at age 5, but I do commend SA for trying to establish us as a repeat customer at an early stage.  
  • Don't give away the farm.  I still can't believe that I received a coupon that was equivalent to $20 in cash.  Yes, it got me through the door, but would I also have gone in for $10 free cash?  Quite possibly.  Should a higher cash-value be reserved for loyal customers?  I'd love to review the strategy behind this direct marketing execution and especially, the redemption results and number of repeat customers it created.
  • Ensure your employees know how to redeem the discount.  My order needed to be run twice because the poor kid didn't know how to process the cash-card.  It also seemed like the manager was going to hand me $2 cash since I didn't spend the full $20 until she did a double take and realized that they don't refund customers on coupons.

If I had discovered value and great service once I was engaged, would I have beelined back for soccer cleats and shin guards this fall? Maybe...At least after I checked to see if I could get what I needed at Target.


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