The Secrets Behind High Value Coupons

By now we all know that coupons are a marketing promotional tool to get consumers to try a new product or to keep buying a brand.  Promoting a new product often results in high value promotional coupons to entice customers to purchase this new product.  Have you ever wondered the reasoning behind that?

In some cases issuing  a high value or even free item coupons may result in a cheaper tactic than offering a free sample.  Have you ever considered the cost involved  in offering a free sample?   From the manufacturer’s point of view, they have to manufacture the products in special packaging, promote the free sample and finally mail that sample.  I started thinking of these costs when I received my sample of Quaker True Delights, it came packaged in a medium sized box that I imagine was not very cheap to ship out.

On the other hand with a free item or high value coupon the manufacturer pays for having the coupon printed, the face value of the coupon and a handling fee.  In some cases this may result in a higher outlay for the manufacturer BUT think of this: the manufacturer has given the consumer the opportunity to purchase the item full size. It has provided the consumer with the opportunity to give the product more than an initial try.  A free or high value coupon also promotes goodwill among consumers, it makes you think of the “generosity” of the manufacturer.

High value coupons are also a great way to aggressively penetrate the market.  Consider the coupon for $1 off any Green Giant Steamer vegetables.  Before these vegetables were available Steamfresh Vegetables pretty much dominated the market for frozen vegetables ready to steam in the microwave.  So what did General Mills do when they released their competing brand?  Issue a high value coupon that made the product free or nearly free to anyone.  They didn’t do this once, or twice but three times.  That’s very aggressive marketing.

But high value coupons are also used by companies to phase out products from the market.  Take the recent example of the coupon for $2.50 off one Equal sugar substitute product.  This coupon came out right around the time the brand released a new box count of 115 packets.  Retailers still had in their inventories the old 100-count box.  By issuing this coupon, and people using it on the smallest size package available, the manufacturer probably made sure that a good portion of the old package was taken off the shelves by consumers.

Another example is the Glade Scented Oil promotion that went on last fall.  This was a very generous promotion to remove from shelves what you would consider “summer or spring” scents such as Hawaiian Breeze and make room for the holiday scents.  But also what do you see now being promoted more than the Glade Plus Ins?  Glade’s Sense and Spray or Lasting Impressions, their two new products.

I think at some point manufacturers make the decision of what’s easier: call back product that’s already on the shelves or think up an aggressive promotion to get consumers to buy those products.  Can you think of any other recent high value coupons and speculate the reasoning behind them?

Comments

  1. Cj Sime says:

    You are so good at what you do. I love that you write about the nature of couponing rather than just the actual deals. It really helps my overall understanding.

  2. Mindi says:

    Another example is the $2.50 Electrasol coupons….it was right around the time that they were released that they were changing the name….and I picked up a 2-year supply of dishwasher detergent for $.29/box!

  3. Andrea says:

    You know, the hubs (Aaron) and I were talking about this very thing the other day. He made the comment that he was flabbergasted that Huggies put out the $5 and $3 off coupons – “How can they make any money when they’ve got people like you and those blogs you read using these coupons?” I explained the very principle of a sample vs. a coupon. A coupon takes MINUTES to generate and put on a site like smartsource.com or even the manufacturer’s own website. I don’t know the statistics NOW, but a year ago, I read that of the over 200 million (might’ve been billon) coupons or so that were printed, less than 1% are actually redeemed!

    I’m just looking forward to getting some cheap wipes. After the diaper deal at Walgreens a few weeks ago, and now this, well…we’re stocked until Liam potty trains (which I hope is within the next half of year!).

  4. Becky says:

    I’ve suspected this tactic (clearing out overstock) with some of the free after rebate items at the drugstores. How about you?

  5. Jennifer says:

    Very interesting, these are some tactics I hadn’t thought about before.

  6. Lynn says:

    Wonderful post ! I highlighted and linked your blog on mine recently. I like the way you look at the coupon universe and I enjoy reading about the BIG PICTURE view on it from you !!!

  7. Angela says:

    Good post. I was actually wondering the opposite. What is with the low value coupons…25 cents and 35 cents? They actually annoy me. I see the point of the manufacturer advertising and wanting to keep their brand top of mind on a regular basis, but do they realize as a couponer it actually aggravates me that they suggest I waste my time saving a measly .35 off my $7.00 or more bottle of Tide? On the other hand, as you noted, the high value coupons DO make me more loyal to a brand as I associate the good feeling of getting a deal with their brand. I just don’t think they realize that the opposite can occur.

  8. Tony's Mom says:

    I agree with Angela that I really don’t like those low value coupons, especially the ones from P&G inserts.

  9. Lea Ann says:

    As a former promotions and direct mail agency creative director, (and now blogger) I will back Mercedes up on the cost of mailing a sample. RIDICULOUS. Companies have now seriously glommed on to “shopper marketing” using the internet as their best tool to reach us. I see campaigns unfolding like this now: Phase I: Send free sample AND free product coupon to short list of Alpha Moms (through a buzz group, sampling panel, on-line membership club). Give them a high-value coupon link to print and share. Phase 2: Alpha Moms tell their friends through blogs, forums, and boards on-line and pass along coupon link. Phase 3: Launch the product with an “everyone is in on it” website that has a link to a mid-value coupon to print Phase 4: Sunday paper FSI coupon with low-value coupons, and store-level promotions for the product. All this is done over the course of 6 months- a year for a new product, to build brand loyalty slowly and surely, using a “grass roots” effort to help get moms on board.

  10. Kathleen says:

    Thanks for a GREAT post!!!
    Also to those who noted above…don’t discount the value of “Low Value” coupons. I used to overlook them BUT our grocery stores often have 10 for $10 sales and after doubling a low value coupon ($0.30 – $0.50), you can get things for Free or pretty close to it!!! I have stocked up on veggies, rice, soap and various condiments (to name a few) this way! Granted they don’t help on really costly items but they can be a big help.

    • tara says:

      Sometimes I PREFER the lower value coupons. Think about it if you have a .50/1 coupon that most likely will double. If you have a $1/2 that sounds like the same but its only .50 assuming your store doubles. I dont use my coupons unless that whatever I want is on sale. Things go in cycles so I dont by something only bc I have a coupon. It WILL go on sale again.

  11. Jill says:

    I agree with Kathleen on the 10 for $10 sales. I actually prefer a 30 or 40 cent coupon on lower priced items for that reason. But you’re right about the lower value detergent coupons or the toilet paper ones. In that case, 25 cents (or sometimes 40 cents off two!) is just silly.

  12. Glor says:

    Don’t forget those oh so generous .25 off folgers….. lol

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