letters

Coupon recap

Counterfeiting and altering manufacturer's coupons is clearly a fraud. However, [every] coupon bears two sources of information — a barcode and a human-readable text. Presumably, these two sources are equal, [but this] is not always the case. What's the primary source of information, the text or the barcode? Obviously, the Point-of-Sale system goes by the barcode.

Dealideal.com had been a target of CIC because of the “Coupon Decoder” software that simply follows the logic of the P-O-S system. I'm looking for the answer from [a] legal standpoint, to end the controversy once and for all.
Leo Gartsbeyn.
www.dealideal.com

Balancing act

Marketers struggle to determine what promotion vs. loyalty programs yield, and which is right for them. Often, ROI dominates the argument. Not so fast.

Promotions involve short-term, high-impact motivators of consumer behavior. Although [such] programs see incremental lift during the offer period, customers often return to their normal buying behaviors.

Trade-off, discounting and other influencers that contributed to the promotion's performance need to be identified and considered to credit the initiative appropriately. But discounting has an incalculable effect on brand equity and long-term brand sales. It can devalue products in the eyes of consumers, who may hold out until the next promotion so they can get the product cheaper. Other consumers may forget their relationship with the promoted brand and watch for the next sale, which may be a competitive offer. Or, worse yet, the product no longer seems special and worth its regular price.

According to retail market research conducted by the NRF and STS, discounting represented 8% of retail sales in 1971; it jumped to 35% in 1996; and 2002 sales related to discount purchases reached an all-time high of 78%.

Loyalty programs embrace relationship growth and include strategies and tactics to address customer retention, advocacy, lifetime value and cross/up-sell. Such initiatives are not engineered to drive short-burst incremental lift but rather a steadily increasing baseline performance of individual customers. One way to differentiate your loyalty program from that of your competitors is through promotions. Promotions encourage activity, and without recency of purchase and frequency of visits, the standard recency-frequency-monetary value premise of loyalty program measurement falls flat.

Combining promotional initiatives within a loyalty program builds consumer excitement via pricing, sweepstakes or contest strategies and provides the ability to influence the overall lifetime value of the customer through additional treatments oriented towards such areas as cross/up sell, defection and tenure.

Stand-alone promotional strategy sparks die to cinders without the fanning of relationship building atop them.
Jim Ruszala
Maritz Loyalty Marketing
www.maritz.com

The controversy over coupon fraud continues to provoke debate; and a reader argues for better integration of goals