Are marketers too dependent on discounts to get consumers interested?
“You know the feeling, the thrill of the save. That secret high from stretching a dollar.”
So began a recent Wal-Mart commercial. Apparently the prices were just too budget-busting expensive over there, so they needed a price “rollback.”
Actually, getting something at a discount isn’t a secret high. Not anymore, at least. Consumers are addicted to discounting. It’s everywhere these days, and it’s permeating every aspect of the ad industry.
Once we or our clients start discounting, can we ever stop? Does it help or hurt brands?
Not too long ago, department stores like Macy’s used to have a “One Day Sale” three or four times a year. Now, they do it once a week. Retailers knew the quick-and-easy way to goose sales was to throw a coupon at shoppers.
While coupon clipping is slowly going the way of the newspapers that hold them, discounts have adapted with the times. The newest, most dynamic ways of engaging consumers these days often involves some sort of discounted carrot.
It’s a large part of what’s making social media tick. Groupon, Scoutmob, and other sites offer one-per-day localized deals en masse that you opt-in to buy, along with making it easy to spread the word to your friends. Add to that Facebook fan-page offers, Twitter offers, secret coupon codes -- everyone’s looking for a break, and businesses large and small are happy to oblige.
As mobile marketing continues to gain traction, marketers are looking to lure nearby shoppers by geotargeting -- using new ways to use someone’s smartphone or other GPS-enabled device to send them messages when they’re in the neighborhood. That could be a smart idea, but it’ll definitely take more than, “Hey, come on in.” It’ll be, "Hey, come on in and take 30 percent off.”
With the rise of electronic-based offers and coupons comes the ability to track them. A recent article in The New York Times revealed what some in our industry already know: Coupons can reveal who you are, how you found the coupon, how long it took you to redeem it, and what might tempt you the next time. Generally, consumers don’t seem to mind -- as long as they don’t know what information’s being collected about them on distant servers. But the more publicity these techniques get, the more freaked out consumers become, so it pays to keep the back-end analytical capabilities a secret. Marketers don’t do well in a world of full, transparent disclosure.
It’ll be sad if the primary way new technology gets used in advertising is to offer an old-fashioned discount. Anyone who believes in the power of a great idea will always question whether the idea or the discount is the true lure for customers. When an offer does attract a response, it’s conveniently used as the sole reason that the ads work, never the creative idea around it. I remember an AE once told a client about a direct mail piece I worked on: “We got a huge response to the mailer, primarily due to giveaway of free USB memory drives.” It’s as if the concept and writing used in the piece were a pointless exercise compared to the incentive. At what point does the discount become the idea?
It’s a creative dilemma: Once you get beyond the shiny gloss of the new tactics, discounts are not sexy. They clutter up the ads and messages in ways creatives hate. Only occasionally will you find a clever concept around a discount, a coupon, or some other offer (although Woot does have some good writing on its site).
These days, however, few brands get away with charging full price and sticking to it. Apple does, generally (but those with connections to students or teachers can snag an education discount). For every high-fashion brand, a sample sale or sites like GiltGroupe or Yoox.com can be found to unload merchandise at a discount. If you want to save a little money on something, it’s not hard to find a way.
The problem occurs when consumers come to expect them in a Pavlovian sort of way. Most brands, especially small businesses, can’t survive anymore without offering deals on a regular basis. Sometimes it’s the opposite. I bought a Groupon for a place that offered teeth whitening at half-price. They were overwhelmed with the response, and three months later the business closed. Be careful what you wish for, I suppose.
In a world where ad agencies are continually having to prove their work is working, and one in which marketers need to produce sales, discounting is as close to a sure thing as it gets. Therefore, ad agencies will have to get used to seeing clients rely on discounts and special offers more and more. Let’s just hope we don’t have to sell ourselves short in everything else we do.