Creating the Optimal Coupon Mix for Personalized Marketing

The first ever coupon is believed to have been distributed in 1888 by Coca-Cola — a ticket for a “free cup of Coke” to help promote the drink. It’s estimated that by 1913, one in nine Americans had redeemed at least one of the 8.5 million tickets distributed through mail, magazine inserts, sales representatives and company employees.

Historically, coupons were viewed simply as a mass promotion vehicle to drive more sales of a particular product. In the digital age, customer information provides retailers the opportunity to join forces with suppliers to personalize and optimize coupon distribution in a way that serves a multitude of objectives. For example, personalized coupons can support introduction to categories and products, retention of customer revenue, cross-sell strategies, improvement of brand and private-label recognition, and more.

To achieve these objectives with a reasonable return on investment, utmost attention must be given to the effectiveness of efforts in creating the right mix of personalized coupons.

In a previous blog post, I discussed tactics for coupon personalization for newly acquired customers in fast-moving consumer goods (FMCG) retailing. In this post, I extend the discussion to other coupons that serve the continuous optimized targeting of marketable customers.

Obviously, the effectiveness of these personalization and optimization concepts is highly dependent on having the right bank of coupons in place. This bank of typically hundreds of coupons should fulfill many different customer needs, and at the same time, address the business objectives of the retailer and its suppliers. A limited coupon bank in terms of quantity and variety, even when using the best personalization and optimization technology, will fall short.

It isn’t just about supporting marketing objectives, however. Since maintaining a coupon bank is costly and can potentially be an operational burden, it’s crucial to create the right mix of offers using the right methodology. In fact, each coupon requires creative work, maintenance of back-end systems, operational considerations such as avoiding conflicts with other marketing initiatives, alignment with pricing changes, and negotiation and settlement with suppliers.

read more/source: http://www.mytotalretail.com/article/getting-from-giving-creating-the-optimal-coupon-mix-for-personalized-marketing/