Before delving deep into this realm, the first question to really answer is what are coupons?
Coupon, in marketing, is a ticket or document that can be exchanged for a financial discount when purchasing a product or a service. It is used for three main purposes by a retailer, in the reverse order (i.e. 3 being most important)
1. Branding and promotion of product/service/brand etc. in the minds of the customer
2. Getting a footfall on to the premises of the outlet or on to a website
3. Making a sale happen
Coupons are in an infancy stage in India as compared to markets like US and Europe. Traditionally, one example that is taken again and again of effective couponing in India is that of Dominos. Dominos delivers coupons in their pamphlets into homes and offices and whenever they do pizza delivery. Their coupons typically have 2-4 weeks expiry to encourage the customer to order quickly before they expire.
One thing to remember is that coupons are not the same as sale/discount/promotion running at a store. A coupon gives certain special privileges to the coupon holder making the coupon holder feel special. And this feeling is what drives the footfall into the store and the sale following it. A customer feels cheated if the retailer is running the same discount for everybody as that is being given on the coupon. For example, if a person get a 20% Off coupon on a certain shirt brand. This makes the person feel special to go and check out that shirt brand. However, he is immediately disappointed if he finds that the shirt brand is any way running a sale of 20% Off. Since coupons are still new in India, therefore, several retailers do not realize this difference and end up shooting themselves in the foot – big time.
Similarly, the end customers are also not well aware of the system of couponing. One critical thing associated with all coupons are the Terms and Conditions (T&C) . Minimum T&C with any coupon is that they can not be combined with any other offer and they need to be presented before the bill is made. Several customers, forget to read these putting the retailer in a tight spot which ends up in a bitter taste both for the customer and the retailer.
Coupons have been catching a lot of steam in India recently. There are two main reasons for this – (1) Organised retail (2) SMS as distribution platform. Organised retail leads to greater competition which increases the need for branding and for diverting footfall from competition into your store. Further organized retail helps you implement IT systems to track the coupons and their redemptions better.
One of the big problems with paper coupons is distribution. Getting them into the hands of the right customer is not easy. This problem is being increasing solved by the use of SMS as a coupon. Since, almost everyone in the TG has a mobile phone so distribution SMS coupon is easy. Further, a retailer does not mind if the coupon becomes a viral and is forwarded to friends. It only means there will be more branding and redemptions.
However, it coupons are still a long way to go, given few of the problem mentioned above. Khojguru is playing its role in it and is a major player in making coupons happen atleast in the region of Delhi-NCR.
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