General Mills got into some public relations hot water recently over their decision to deny disgruntled consumers the right to litigate and instead force conflicts into arbitration.
The issue isn’t really about evil legal departments, but rather, the intimidating prospect of upsetting the coupon community and the skill and diplomacy corporations need to navigate coupon culture.
Some say traditional couponing—the kind of discounts offered by retailers or manufacturers via online download or physical slips that are redeemed with a purchase (or shortly thereafter by sending back a proof of purchase)—is on the rise. Many believe this “coupon comeback” is the result of the 2008 recession, increased access through digitization of the offers, as well as pop-culture shows about “extreme couponing.”
Frankly, I’m not sure that the trend data is all that accurate. Regardless, whether more people are couponing or couponers are couponing more, it still poses the question: from a business owner’s perspective, is couponing actually worth it, given the downsides?
For consumer packaged goods (CPG) companies, couponing is often an internal debate with sales versus marketing, branding and PR teams. On the one hand, coupons can drive sales and lure in new customers, or lure back old ones. On the other hand, coupons can devalue your brand and eat up advertising budgets that could be deployed elsewhere—and all simply to appeal to a notoriously disloyal sector of the consumer market. This debate is old, and the latter side hard to quantify.
What is new, however, is how digital promotions have changed the game.
The most obvious problem is that traditional couponers online can often exhibit trolling behaviour, scouring company websites and social media streams solely for coupons, and participating in online discussion exclusively to demand more coupons, to complain about the (not uncommon) technology glitches associated with coupons, or to moan about disagreeable fine print. These negative conversations can often chill positive, and more interactive, online discussion between a brand and its customers. It can also require lots of attention from customer service and PR teams. Couponers may buy product, but they can also drain your organization of time and energy in couponer management.
This might have been a partial motivation behind General Mills’ legal move. Not unexpectedly, General Mills’ response to deal with customer blowback incited more yet customer blowback: cue the business punditocracy with posts just like this one.
But I would argue the legal change likely irritated flighty couponers more than General Mills’ stable customer base. General Mills’ initial decision to force consumers into arbitration, rather than face large-scale class actions over coupon negligence—or whatever a future allegation might be—isn’t outlandish. It’s fairly reasonable, even logical. Their subsequent decision to reverse the policy, however, was neither.
In caving quickly to the backlash, General Mills ignored the larger question facing them and every other CPG company: is the company’s revenue-generation from traditional coupons worth the costs they bring to your organization in terms of social media, public relations and risk management?
Every business is different, but one thing is the same across the board—companies have got to crunch the numbers.
Traditional couponing going digital delivers coupon trolls, yes, but it also delivers a tool for solid analytics data. Within reason—i.e. without shadowing customers with creepy cookie tracking—you can find out what websites are referring customers to your coupons, and what times and days consumers are seeking out coupons. You can also get a better sense of redemption rates than with the thousands of runs of flyer-based coupons. All of this contributes to clearer ROI calculations. Maybe traditional coupons are big to your bottom line. Maybe they’re not.
If not, moving away from traditional online couponing doesn’t mean throwing out the baby with the bathwater. Online rebate-esque systems such as discount codes, geolocation-based coupons, and SMS-based offers may make more sense. These fresh innovations can reduce online shopping cart abandonment, test-drive demand for new products, and help you break out of traditional couponing market segments. (Not only do these new coupon-esque technologies actually improve brand loyalty, they’re also better for search optimization, which is the gift that keeps on giving.)
One former extreme couponer recently wrote this blunt and honest mea culpa in Time. He evaluated the cost versus the benefit of his couponing habit and found that when all the dust settled, the exercise just wasn’t worth it. His might be a good lesson for your business.
Denise Brunsdon is a public relations and social media consultant. She is also a mild hypocrite because she loves watching the show Extreme Couponing. @Brunsdon