Coupons 2.0 – How Shoppers Are Leveraging the Network to Beat Retailers At Their Own Game Coupons are on an upswing, driven largely by the internet, mobile, and the recession. But Coupons 2.0 are more than just the lure of "easy freebies." Coupons 2.0 are also about the enormous social access that the Internet and devices have unlocked for users, as well as the coupling with people's innate cultural need to "get over" on systems. Coupons 2.0 is about the new power of networks to enable shoppers to beat retailers at their own game.  Fallon's digital strategists Sarah Crist (@scrist5) and Liz Giel (@lizgiel) reveal the drivers of success for enabling Coupons 2.0 thinking on your brands and demonstrate how the art of the bargain is evolving the retail model and commercial creativity.

1. Be sure to check-in on Foursquare and friend
Fallon Brainfood on Facebook for SPECIAL OFFERS!

3. Coupons 2.0
How Shoppers Are Leveraging the Network to Beat
Retailers at Their Own Game
June 22, 2011

4. We are…
Sarah Crist Liz Giel
Digital Associate Digital Strategist
Fallon Fallon
Twitter: @scrist5 Twitter: @lizgiel
LinkedIn: LinkedIn:
http://linkedin.com/in/sarahcrist http://linkedin.com/in/lizgiel

5. We want to share what we’ve learned about the
evolution of Coupons and the future of Coupons 2.0.
- The Coupon Comeback
- The Psychology of Saving
- More Than Dollars Off: Delivering the Thrill
- Turn Discount Addicts into Brand Loyalists
- How to Get in the Game

6. Coupons Make a Comeback

7. At the turn of the millennium,
coupon use began to slide from 4.6
billion coupons redeemed in 1999 to
2.6 billion in 2008.

8. Then the recession hit, triggering a
coupon resurgence driven in large
part by the Internet.

9. While coupon enthusiasts continue to find deals in
Sunday mailers, they supplement their stack with
online savings.

10. The rapid adoption of
mobile devices has
offered an even more
simple approach to
finding and accessing
coupons.

11. Redemptions grew by 27% in 2009
alone, with Internet coupons leading the
way, rising more than threefold.

12. But the people redeeming coupons
aren’t just those in economic need of savings.

13. Enthusiast couponers who use online coupons are
most likely to be young and high income, with
60% making more than $50,000 HHI per year.

14. It’s become clear that the lure of couponing
goes deeper than “easy savings.”

15. The
Psychology of Saving
is more powerful than the discount.

16. The great difference found between
those highly prone to coupons and those less
prone is “a strong underlying ego-related
dimension” to extreme couponing.
Source: Highly Coupon and Sale Prone Consumers: Benefits Beyond Price Savings
16
Journal of Advertising Research (2003)

18. The “Krazy Coupon Lady” does not need
to save hundreds of dollars on groceries.
She needs the feeling she gets from saving.

19. Extreme Couponers aren’t the norm, but their behavior is
an exaggerated version of the everyday coupon seeker.
KRAZY EVERYDAY

20. “I loved it. I’d just gotten $10 worth of books free.
It almost felt as if I’d shoplifted.
It’s absurd that I should have felt so giddy. ”
David Pogue (on Groupon), NYTimes Tech Journalist
20

21. Easy Savings does not
explain the success behind
sites like Rue La La and Gilt.

22. The average coupon user has developed an
expectation of savings that affects their
purchasing behavior.
Pricenoia — noun
Insider Discount for Everyone!
Pricenoia: A disorder characterized by the
systematic verification of international sites
when ordering from Amazon.

23. Marketers should focus on delivering
the thrill of saving—not simply discounts.

24. Coupons 2.0 is the next era of
couponing—leveraging the power
of the network to enable
shoppers to feel they’ve beaten
retailers at their own game.

25. RESISTANCE
IS FUTILE.
Brands must embrace this mentality and
offer consumers the rush they seek.

26. is not the enemy.
Copyright ©2007 Fallon Worldwide. All rights reserved.
The Krazy Coupon Lady

27. If you look closely, she’s actually driving awareness,
traffic, and trial of your products.
23% of total
monthly
visits came
from Krazy
Coupon Lady

28. The key for brands is to use the appeal of
savings as bait to maximize brand engagement.

29. Businesses that succeed in the era of Coupon 2.0
have identified ways to extend
the feeling of accomplishment consumers
experience when cashing in on deals.
Copyright ©2007 Fallon Worldwide. All rights reserved.

30. Once You Got ’Em, Keep ’Em

31. For Old Navy, the lure of a $1 scarf brings people
into the store, but providing the rush of saving
around every corner leaves visitors with a full cart.

32. Backcountry.com’s version of the $1 scarf is Steep and
Cheap, a daily deal website which serves as a gateway
for users to explore their site for additional savings.

33. Dairy Queen uses deals to recruit members for their
Blizzard Fan Club, fostering an ongoing relationship
with their customers.

34. Totino’s uses the network effect to turn cheap
loyalists into social advocates.

35. These businesses have used discounts as bait
to drive customers deeper into their brand.
Copyright ©2007 Fallon Worldwide. All rights reserved.

36. But a unique lure attracts a unique crowd.
Draw them in with an offer they can’t refuse.

37. The Cosmopolitan of Las Vegas offers deals in a
unique and unexpected way.

38. Sun Country recently used Groupon as bait by offering
an unexpected product for unexpected value.

39. Businesses who use
deal sites like
Groupon must make it
worthwhile and offer
consumers the
perception they’re
coming out on top.

40. Sun Country employed robust restrictions to ensure
a positive business outcome from the deal while
consumers marveled over the savings.
pssst… not valid for travel on Friday or Saturday, must pick month, additional fees apply.

41. Sun Country should have taken the deal one step further,
by getting users involved with their rewards program.

42. Target delivers the perception of savings euphoria
while solving business problems.
“The more you buy, the more you save!”

44. The allure of “everyday savings” is similar
to loyalty programs where experiential
savings attract repeat customers.

45. But the abundance of loyalty programs
has lessened the appeal.
Copyright ©2007 Fallon Worldwide. All rights reserved.

46. Modern loyalty programs include elements
of exclusivity to escalate the thrill of savings.

47. Zappos takes loyalty a step further and combines
exclusivity with competition, tapping into the
gamesmanship that’s already present in finding deals.

48. Many location-based services tempt users with
competition, but more importantly, deliver on
relevancy as well.

49. “Coming Soon” technologies will
provide even greater opportunity to
deliver the thrill of savings.

50. Near Field Communications (NFC) allows
for simplified transactions, data
exchange, and connections with a touch.

51. A “futuristic” example of how NFC will affect
coupons and discounts.
Consider arriving at the Use your cell phone Ten minutes later, you To check out, your phone
airport on vacation and as your room key via receive a message from the can be used before exiting
receiving a check-in NFC chips in the front desk to ensure you’re the hotel lobby. You are
notification from your hotel device and the door satisfied with your room. given a quick satisfaction
that contains your room handle. They also offer 15% off survey and, in return,
key so you can bypass the room or spa services. bonus loyalty points for
front desk. your participation.
Source: ASSA ABLOY Mobile Keys at Clarion Hotel Stockholm

52. Starbucks Card Mobile is an early example of what
will soon be the norm, allowing customers to check
rewards and make purchases from a mobile device.

53. A rise in smartphone ownership coupled with NFC
deployment will increase mobile coupon adoption.
• POS equipment for
Mobile Coupon Adoption
redemption
• Consumer awareness
• Lack of CPG offers
• Opt-in process
• NFC deployment
• Consumer interest
• Real-time offers
• Geo-targeting
Source: JupiterResearch (2/08) Time

54. In summary, there are a few key drivers when it
comes to maximizing the thrill of savings.
- Once You Got ’Em Keep ’Em
- Utilize the Network Effect
- “How Could I Not?” Deals
- Insider Trading
- All the World’s a Game
- Hit Them with Uber-Savings

55. What does this look like
for Fallon and Fallon Brands?

56. Insider Trading: “Like” Fallon Brainfood

57. Utilize the Network Effect:
Unlock the Dessert
10 People Check-in

58. Once You Got ’Em, Keep ’Em: Cadillac

60. All the World’s a Game: Totino’s

61. Text “Freepizza” to 23459 to find out where you can
spot the Totino’s Party Pizza!

63. Hit Them with Uber-Savings:
Nordstrom

64. Use the
promo code
“TAGSCAN”
for 20% off
your order!

65. To succeed in this new age of couponing,
you need to enable your consumers to feel
they’ve “won” a battle against retailers.

66. Our Parting Words:
What marketers can do today.
1. Focus on delivering the thrill of savings—not technology or savings alone.
2. Ensure business goals are considered when developing promotion ideas
and loyalty programs.
3. Make sure e-mails are mobile-optimized.
4. Start thinking about the customer purchase process, and find
opportunities to provide the excitement of saving money throughout
the entire experience.
5. Capitalize on the increased foot traffic that comes with using offers as
bait.