Coupon Mailers Don’t Work – Print is Dead!

Traditional newspaper advertising, coupon mailers like Valpak, Clipper, Money Mailer, Red Plum or other local coupon mailers don’t work. Now understand, I am not saying direct mail coupons don’t or can’t get you any customers…that would be silly. If you do enough of anything, you are bound to get more customers. What I am talking about is the reason you advertise…MORE PROFITS!

Coupon mailers, direct mail and newspapers simply don’t offer a high enough return on investment to be considered effective. A basic example to illustrate my point is to assume you are doing Valpak at $500 per zone. You are a pizza restaurant and you get 50 coupons back from the mailing. $500 divided by 50 equals a cost of $10 dollars per order. If your average profit per order is $10 after you account for the coupon, you break even at 50 coupons redeemed. In other words, you don’t make a penny, zero, zilch, nada until the 51st coupon is redeemed. You just worked your butt off for the first 50 orders and the only one that made a profit was Valpak.

Compounding the problem with mailed coupons is who redeems those 50 coupons. Over the last 4 years, my company has interviewed over 2,000 restaurants that use direct mail coupons and the average rate of redemption for their coupons by repeat or existing customers was 65-75%. That means that over two-thirds of all the coupons being redeemed were by people that already knew about and enjoyed the restaurants food. Essentially, the restaurants were paying Valpak $10 a piece to get their existing customers to visit again.

I believe in customer loyalty programs. With out a doubt, customer loyalty programs are the number one issue I address with my clients. But direct mail makes for a lousy loyalty program. It is expensive and suffers from the same issues of all direct mail. The internet makes a much better option for keeping your customers coming back and offering existing customers loyalty offerings.

The lie of direct mail is that you will have people coming into your business that saw your coupon and ads but don’t have or use the coupon. The extension of that lie is that after you build up loyalty, these customers will continue to visit your business after you stop mailing them coupons. Of course some of this is true…but if it was really true, wouldn’t you have been able to stop mailing coupons by now? How many years of mailing coupons are required to get to this Shangri La of repeat customers without coupons?

We know that this concept of direct mail coupons being temporary is ridiculous. You don’t have to survey 2,000 businesses to know this, simply listen to what your rep tells you. They first tell you about how you are building brand and awareness and you will get residual business and in the next breathe they tell you that for this to be effective you have to do mailings to the same households 8-10 times per year. Huh? Two completely opposite statements…which one have you found to be true? What we do know is that coupon users use coupons…if they don’t have your coupon in their hands, then they will use your competitors.

The final issue with direct mail coupons is timing. Do your customers and potential customers have your coupons in their hands or at the ready when they want to do business with you? If not, you may not get their business. We know coupon users use coupons and two thirds of your coupons are being redeemed by your existing customers…how many orders do you lose because you mailed your coupons to them last week and they are wanting pizza this week? They tossed last weeks mail and this week, they got the mailer you don’t do and saw your competitors coupon…you just lost a sale.

Here is the good news….technology has caught up with direct mail and there is a better solution. The Internet offers local and regional businesses an extraordinary opportunity to reduce costs, better serve their existing customer base, over come the issues of direct mail and most importantly – MAKE MORE PROFIT!

Utilizing the Internet to distribute coupons, your customer loyalty program and making sure that your customers have 24/7/365 access to your specials and offers can dramatically increase your bottom line profitability and customer loyalty.