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A while ago, I called one
of the national pizza chains to have a pizza delivered. They asked for my phone
number, and I heard the person working her keyboard. I order the pizza and then
she asks me, "Do you have any coupons today?" Since I didn't, I feel like
everybody else in the world is paying less money for that pizza than me, which
makes me feel real "special."
That's one of the dangers of
offering special discounts via the mass media to only a segment of your
marketplace. You end up alienating
some customers because they were first informed of the special pricing but then
denied it because they didn't have the coupon.
While this can be very helpful in
generating short-term sales, it can be a problem for you down the road. If you should continue to offer deals
for any protracted length of time, the danger is that you'll condition your
customers to wait for the deal before they will buy from you.
Many of our clients have expressed
concerns about shrinking profit margins as a result of a loss of pricing
credibility. Coupons and sales are effective. When you use any type of off-price
tactics be sure you protect your price credibility in the process. One way to
protect your price credibility and still attract buying customers is to use a
cross promotion. Transfer Responsibility of the
Discount
When you run a coupon, the consumer
knows you paid money to offer a deal on your product or service. However, if you
were able to get another organization to distribute your offer to its customers
or members on your behalf, it helps to transfer the responsibility of that offer
to your cross promotion partner. Make sure on your promotional piece you say,
"compliments of" the organization handing them out. FREE
COVERAGE
Another advantage of this cross
promotion approach is that you get your advertising piece distributed to your
customer, free. This is a great way to supplement your existing advertising
budget without adding additional cost. Even the actual printed piece doesn't
have to be that expensive. Since it is being handed out at the register with a
purchase or as a bag stuffer, you don't need full-color to get the customer's
attention like you would with a direct mail campaign. TARGETED COVERAGE
GEOGRAPHIC COVERAGE
Most retail businesses get their
customers within a certain area surrounding their business, perhaps two to five
miles. So, if you want to focus you efforts to a certain part of the city, you
simply set up a cross promotion with a partner located in the area where you
want the concentration of your effort. This also comes into play when you have
multiple locations in a market but want to get more aggressive with one of
them. – PMQ – Jeff and Marc Slutsky are co-authors
of five books including StreetFighting. They are executives of StreetFighter
Marketing in
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Another advantage is
that you can target the types of customers you want by demographics.