Finding the Right People at the Right Time: Coupons and Loyalty Programs

Over the course of my years working with merchants on coupon campaigns, I’ve found one common, recurring question: How a coupon can help me connect with the right person at the right time?

In other words, the merchant wants to know how to connect to people who aren’t a current customer, at a time when that person is looking to make a purchase.

That isn’t just an issue with coupons, it’s really the key to overall business success, right? If we had a formula to get in front of the right person at the right time we’d all be billionaires.

Fortunately, I’m in a position where I can offer a solution that comes pretty close: coupons served up through discount programs to members of loyalty programs. The discount program model allows our merchants to “be found” by targeted audiences actively looking to make a purchase.

Affinity Programs and Incremental Business

Let me explain the model. Access contracts with merchants who agree to serve up offers to members – members who have gained access to our network through a loyalty program membership, or as a member benefit for joining an auto club, for example. These members have 24/7/365 access to the offers through mobile apps, web portals, or printed certificates. The members use the deals and save money, the loyalty program gets the credit, and the merchant gets the incremental traffic and revenue.

Incremental. That’s the key word that gives loyalty programs an advantage. Incrementality is what a business gains when it adds a promotional channel on top of its usual business. It’s your ROI, or how much you earned for every dollar you spent.

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Loyalty programs can deliver incrementality like no other. Here’s why:

  1. They connect at the right time. Most of our usage comes from people looking to save on money they’re already planning to spend. They want to go out to eat and they open our mobile app to find a restaurant offering a deal, or they need an oil change and select a shop based on where they can save a few bucks. Discount programs like ours find people in the heat of the decision making process more often than not.
  1. They create repeat business. We can’t guarantee that every person Access sends to a merchant has never been there before, but the great thing about a coupon on our network is we can help turn anyone into a repeat customer through smarter couponing. See a previous post where I described a merchant who offered a one-time-only deep discount to bring new customers in the door, as well as a lighter ongoing discount to ensure they kept returning. We worked with the merchant to craft a deal that ensured profitability while still rewarding the customer.
  1. There’s no charge. At least for those in the Access network. So a merchant is opening the door to millions of potential new customers for free. Every person that walks in the door is incremental business. There’s nothing to lose and everything to gain.
  1. The audience is controlled. Few things can wreck a business faster than a deal that “goes viral.” Coupons work best when they’re delivered with a strategic focus and purpose behind them, such as increasing foot traffic on Tuesday nights or selling more desserts. Most discount programs are private, meaning the crowd is limited to only teachers from the local school or employees from the manufacturing plant in the suburbs.
  1. They align merchants with strong brands. One of the unsung benefits of working with loyalty programs is being able to instantly connect with the same audience as a big bank or a national insurance provider. It’s instant credibility for a merchant and enables “good vibes” to carry over from one brand to another. Most discount programs carry out marketing functions, such as emails branded under the loyalty program provider, which is essentially a free endorsement from a larger brand that the member is already engaged with.

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The Right Deals, The Right People

It seems to be a common occurrence these days that merchants are being bamboozled by coupons. They often wind up losing money on their offers when it goes viral, or the daily deal company takes too large a cut. It’s tough because there’s essentially negative incrementality.

In over 10 years of working with merchants and discount programs I’ve seen many, many businesses thrive due to the low-risk/high-return nature of the loyalty program model. It’s a major reason why we retain 99% of our merchants every year.

While there is no magic bullet to the “right person at the right time” issue, working with loyalty programs can get you very, very close.

If you’re interested in adding your business to the Access network, click here and sign up today.

(Waldo image courtesy of William Murphy)

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Topics: Customer Engagement, Customer Incentives, Ongoing Incentive Programs, Mobile Coupons, Discount Programs, Member Benefits, Access Development, customer loyalty

Written by: Dave Bona

Dave Bona is the Vice President of Partnership Marketing at Access Development. He oversees the company's relationships with over 300,000 local and national merchants - the largest private discount network in the nation.

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