How to save money and control coupons by switching from direct mail to digital

By Seth Sarelson & Jonathan Treiber, Seth@RevTrax.com, Jonathan@RevTrax.com

Still reeling from the double hit of the May 2009 postal rate increases and the recession, brick-and-mortar merchants are looking for new ways to save money and market to their customers. Increasingly, these marketers are finding themselves in unfamiliar digital territory. The shift from traditional vehicles such as direct mail and inserts to a digital world that spans e-mail, search, social media, and mobile is not a subtle one.

Times are changing, silos are falling, and retailers are realizing that between design, production, postage, and other costs, direct mail has a more limited role in the marketing arsenal, and needs to be used much more selectively than before.

Let’s look at the relative costs of digital direct marketing versus print: Bulk postage rates alone could be in the neighborhood of $0.20 per piece. In the digital world, sending that same offer via e-mail could cost $0.003 with volume, and sending that offer via social media will cost nothing except the time of the marketing staff to set-up and execute the campaign. Digital direct marketing provides substantial cost savings, better targeting abilities, and logistical efficiencies.

For marketers with a compelling value proposition, one of the biggest costs associated with digital media is the cost of not controlling their offers in a world of digital viral marketing.

Direct mail by nature is a one-to-one communication channel. Consumers rarely receive a print coupon and share it with friends and family via e-mail and Facebook. Direct mail has inherent control features that digital marketing does not, at least not without utilizing sophisticated security technologies to control and manage distribution of digital offers. The viral nature of information on the Internet creates a number of new risks as well. A poorly executed digital campaign can damage your brand, deplete your budgets, and alienate your loyal customers.

There’s a lot of risk -- but with the right process and technology, savvy marketers will do far better with digital distribution and reap the tremendous cost-savings and marketing efficiencies.

Here are five easy suggestions for brick-and- mortar marketers just getting started with digital couponing to drive in-store sales:

  1. Make sure your Web site leads to your stores. Does your Web site have an interactive map with a store locator? A direct mail piece can list nearby stores based on the mailing address. However, in the digital world, consumers may want more information. Focus on usability and make this information easy for consumers to find on your Web site.
  2. Grow your e-mail database and social media following. Direct mail is predicated on an existing database of addresses. In the digital world, you can send an offer out to a much smaller database and leverage the viral marketing aspect of the Web to get other people to sign-up for your e-mail program or follow you on social media first before getting the special offer. Using the viral Web as a database building vehicle offers a big plus over direct mail.
  3. Use paid search. Use search engine marketing to put an offer in front of consumers looking for your goods and services in the specific ZIP codes where you have physical locations. This isn’t rocket science, and a simple Google search campaign will allow consumers to raise their hands and find you, which is a very different dynamic than a direct mail campaign focused on casting a wide net to potentially unengaged consumers.
  4. Measure, track, and measure again. Where are your in-store sales coming from? E-mail? Social Media? With direct mail, you know how many pieces you send out and how many get redeemed. With digital, there is a much larger gray area, and more robust measurement and tracking technologies are required to tell you exactly how offers are working in each channel and across channels.
  5. Invest in the right technology and process. It’s critical to ensure that high-value offers from your e-mail club don’t get posted all over the Internet or market-specific offers don’t bleed across geographic regions. This type of front-end fraud protection is often complemented with fraud protection at the point-of-sale to prevent coupon fraud at the register. Make sure you find the right technology partner who can provide flexible solutions on both these fronts.

As mentioned above, many merchants are learning the hard way that if not executed correctly, printable coupon campaigns can have serious repercussions across an entire organization, ranging from operations to marketing to customer service issues.

There are a number of couponing mistakes that every brick-and-mortar retailer will want to avoid:

  • Don’t use a PDF. PDF’s can easily be manipulated are easy to forward around in an unsecured manner, rendering robust tracking and analytics excessively difficult.
  • Never show a full coupon on the consumer’s computer screen. It’s never a good idea to show a full coupon on the consumer’s computer screen to avoid image manipulation. The only time the consumer should see the full coupon is in the print tray.
  • Never let the consumer leave your domain. For ideal response rates and customer experience, keep the consumer and coupon on your Web site at all times.
  • Don’t make the consumer go through a long registration. Keep the registration simple. Do NOT ask the consumer for endless amounts of registration data that you won’t use.
  • Don’t force the consumer to download software. Simplicity and a clear call-to-action are keys to keeping customers happy and conversion rates high.

Successful couponing via digital media takes a commitment to testing, a well-planned process, and the proper technology. With a willingness to learn and the right partners, every marketer can begin making the transition from direct mail to digital.

Seth Sarelson (Seth@RevTrax.com) and Jonathan Treiber (Jonathan@RevTrax.com) are co-founders at RevTrax (RevTrax.com), a leading provider of technology solutions to help multichannel merchants track the effectiveness of digital media on offline transactions.

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