Are you making these 3 mistakes on your coupons?02 May 2018, by Kamron Karington in Marketing, Pizza
Coupons. Yuk. You’ve probably had fantasies of lynching the guy who invented them… but, as much as we hate these little boogers – we need to use them. Why? They drive traffic. But, if we’re not careful they’ll also murder our bottom line.
Secret #1. The offer inside the coupon is not the important thing…
The grocery industry tracks and tests more coupons than anyone. And what they’ve discovered is very interesting. It’s not so much the price or savings in the coupon that drives response. The trigger that causes people to clip and use them is… the dashed border surrounding the offer.
It’s a conditioned response like Pavlov’s dog. Quick refresher: Pavlov (a Russian Psychiatrist) discovered that ringing a bell every time a dog was fed conditioned the dog to salivate in anticipation of food. After a few days, the mere ringing of the bell caused the same reaction – even when no food was present.
Likewise, coupon clippers see a dashed line and grab their scissors.
I have personally tested my everyday three-topping price of $12.99 against $10.99. Both offers pulled virtually the same response. So why would I leave two dollars on the table if I don’t have to? Test higher prices (and yes - even your regular price).
Secret #2. Ignite response by magnifying your offer
On even the coldest day the suns rays can be focused into a virtual blowtorch with a 99. cent magnifying glass. Can we heat up your offer as well?
Let’s create a coupon for a Large 1-topping pizza and 8 wings. (The prices are stupid - this is just an example). The pizza sells for $9.99 and the wings sell for $4.00. Let’s make this a package deal – both items for just $9.99. That means the wings are free.
The coupon on the left simply makes the offer.
The coupon on the right amplifies the offer by making "FREE Wings" the star of the offer.
Brian Edler, with Domino's Pizza (and the fastest pizza-maker in the world by the way) did a split-run test on both layouts. Layout #2 pulled 78% better in one test and 100% better in a follow up test. Same offer. Same price points. Double the business.
Secret #3. Don’t discount at all – add value
The big three test offers with billions of coupons every year. They know what works. One offer you won’t see is “$3.00 OFF!” Oh, maybe every now and then some renegade franchisee will “blink” and resort to it. But by and large the big guns use bundling in their coupon offers. Two pizzas for $14.99. Pizza and wings for $15.99. Up to 5 toppings for just $12.99.
What if your everyday menu price on a large 3-topping, wings, and 2-liter comes out to $19.99? You can still pump up the perceived value by amplifying the add-ons.
Constant coupons that all have dollars-off… cheapen your product in the eyes of your customers and train them to wait for the funny-money. When you bundle complimentary items together your offers take on the perception of “added value.” Two-thirds of all consumers are more motivated by good value than cheap prices. Harness the traffic-driving force of coupons without crushing your profits.
This article was updated on 5/2/18