Why No One is Using Your Discount Program (Hint: It Isn't Built for Them)

By Brandon Carter | Updated on Apr 22, 2014 2:10:00 AM

 

bad discount program

Discount programs are a great option for member benefits, customer incentives, even fundraisers – as much as 90% of the population uses coupons! It’s a no-brainer, right?

Go beyond the surface, however, and you’ll see that many of these programs fall flat with their members. The excitement of membership in these programs wears off quickly for many folks, and they never return after one or two initial visits.

Why?

Most discount programs aren’t built with the end-user in mind. They’re chock full of online-only affiliate deals (which are already accessible to the general public with a simple search) that earn the provider small kickbacks on each transaction, and content repurposed from daily deal sites and other aggregators. Usually, the only in-store offers are concentrated in just the largest metropolitan areas.

This type of discount content is popular because it requires little to no merchant relations staff to acquire and maintain, and many of the deals drive small increments of kickback revenue to the discount program.

In other words, they’re not built based on consumer spending habits and patterns. Consider the following:

  • In-Store Offers Still Rule. 94% of spending still happens in-store, whereas most discount programs are stuffed full of online-only discounts.

 

  • Not Everyone Lives in Big Cities. 50 million Americans live outside urban areas, and the ten fastest growing cities in America aren't major metropolitan areas but places like Midland, Texas and Fargo. If 80% of consumer spending happens in-store within 20 miles of home, then most discount programs are completely irrelevant to this portion of the population.

 

  • People Want Mobile Coupons on Their Smartphones. 75% of consumers redeemed a mobile coupon in 2013, yet few discount programs offer mobile coupons that can actually be redeemed on a phone. Most require users to print off a coupon or refer to a book, if they have a mobile coupon offering at all. Problem is, mobile coupons require a close relationship with a merchant, due to differing POS systems and some of the complications that arise with redemption.

 

The best discount programs are built to match where (and how) consumers actually spend. So why don’t more discount programs focus on building discount content people will actually want to use?

Because building and maintaining a discount network is difficult. It requires a team of professionals working around the clock to build relationships with merchants (who typically barely have time to pick up the phone). It also requires close attention to the constantly shifting landscape of consumer spending.

Rest assured, it’s worth it. Discount program usage (a.k.a. people redeeming coupons) results in higher client engagement every time. Usage comes as a result of relevance and value – two areas that most discount providers can’t be bothered with.


Relevant discount programs work because they create effective engagement, which leans to loyalty. Learn about how this happens and more in our free eBook on Earning Engagement:

Engagement eBook

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Topics: Customer Incentives, Mobile Coupons, Merchant Discount Network, Discount Programs, Member Benefits, Viewpoints, loyalty programs

Written by: Brandon Carter

Brandon is a writer and marketer for Access Development. He's a frequent blogger on customer and employee engagement & loyalty, consumer trends, and branding.

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