Here's the dilemma:
You are in a market with stores that frequently run percentage off coupons, i.e 40% off of any one regular priced item. You have always accepted competitor's coupons, but now they are getting out of hand. Do you continue to accept competitor's coupons or do you stop accepting them and risk losing customers?
Have you encountered this situation? How did you handle it? What was the ultimate outcome?
Good question! I just responded on my blog, with these comments:
ReplyDeleteSome options I see:
* offer 30% discount coupon only in your newsletter, then market that point - people must subscribe to your mailing list to get the coupon. That at least gives you more opportunity to market to them.
* Accept competitor’s coupons, but only once a month from each person. Use your POS software to track the coupon use.
* Accept competitor’s coupons, but limit which stock to which the coupons can be applied
* Require that the coupons be used on items of a certain dollar amount or higher
* Require that customers must be a member of your Frequent Buyers’ Club, or “Discount Club” where a certain product line or tool is discounted each month, or some other paid “elite” membership club to be able to use a competitors’ coupon. The ability to use competitors’ coupons could be a strong incentive to join that club. Members’ Only perks are strong motivators.
The idea is to make the use of the coupon somehow benefit you beyond bringing someone into your store. Strive to make this customer service serve you by giving you the opportunity for more marketing venues, or more revenue via subscription programs.
Now apply the logic from the blog on May 17th regarding Macy's trying to get their customers weaned off of coupons to this issue of accepting competitor coupons. I, the rat, want to use my competitor coupon at your store and you make it horridly difficult or diminish the value of the coupon with some hokey "in lieu of" acceptance...this rat is gonna search his pellet elsewhere.
ReplyDeleteGeorge rants and raves about making the life of the shopper easier - so why are you complicating things? Either accept the competitor coupon at face value and make my life easy and my love for your store blossom...or don't and I'll accept the policy if I choose or shop elsewhere.
That's a good point -- it's obviously from the consumers point of view. If you stop taking coupons, you have to consider how many customers you will impact, how that will effect business.
ReplyDeleteHow have those of you who have stopped taking competitor's coupons handled this issue?
Georganne & Rich
For us, it's all about relationship. Our customers can get whatever we sell somewhere else, probably cheaper in some cases. But they can't get it along with us except at our store. We connect with the customer as a human being who is smart enough to use a coupon when they need a bargain and to come and shop with us when they want to be with friends who share their interests. It seems to balance out for us, and we don't have to discount our way out of business.
ReplyDeleteWe tried accepting competitor's coupons, but it didn't work out. It didn't build business. All it did was allow our regular customers to get a bigger discount on something once in a while. When we stopped doing it, our business still continued to increase. Everyone's situation may be different, but that's our experience.
ReplyDeleteThe thing about retail, and sales in general, is that there is no universal experience. Nothing works all the time, which is why you cannot rest on your laurels. You have to keep trying things and MEASURING the results to see what works.
There needs to be a way for the independent retailer to stand apart from the larger box stores, in pricing and not just product selection and customer service. It should be something that consistently pulls the consumer into the store and rewards them for being there, not because they have a coupon, from a competitor or otherwise. Additionally, the whole notion of "couponing" cheapens the image of the category.
ReplyDeleteThe National Scrapbooking Association
offers a creative solution that is super simple for retailers. Every consumer member of the NSA can download and print their membership card, which shows their name, address and expiration date. The consumer presents their membership card to participating retailers for a discount of what they purchase. The retailer sets the discount (generally a percentage of 5-10%) and can adjust it to maximize marketing opportunities. For example, offering 15% off on special days like National Scrapbooking Day.
The benefits for the retailer are numerous: it's a program they don't have to manage, initiate, maintain, print, distribute, punch, etc.; there is no cost and very little risk; the responsibility is placed on the customer to keep their membership up to date and to present their card; the discount is customizable and controlled by the retailer; the discount is tied to cash flow, not dictated by the competition.
The benefits for the customer are plenty, too: there's only one card to keep up with! and additional cards can be printed if one is lost (the retailer may ask for ID to verify the cardholder); the discount applies just for walking into the store, not accumulating punch cards - which are usually lost; and there is immediate satisfaction, not guilt for spending so much money.
Best of all it allows the independent retailer to compete on a more level playing field: against other independents on the merits of service and selection, not with the box stores where there is neither.
Veronica Hugger
National Scrapbooking Association
I think I would accept coupons either one week a month or just on perhaps Wednesdays. (or your slowest day of the week) Because no matter what--I may shop at Joann and Michael's and the like but the specialty scrapbooking stores sell products that the chains don't sell. Certain papers and alterables are just an example. And let's not forget that there are lots of people out there that just pay the cost whatever it is. Plus I like the personal touch one gets in a smaller craft or scrapbooking store. My questions get answered by pros. Just a thought here from a consumer. Judy
ReplyDelete