By Dave Bona | Updated on Nov 9, 2014 11:45:00 PM
Over the course of my years working with merchants on coupon campaigns, I’ve found one common, recurring question: How can 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.
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.
Loyalty programs can deliver incrementality like no other. Here’s why:
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.
(Waldo image courtesy of William Murphy)