This is a story about where a quarter of a billion coupons ended up being redeemed. There are arguably few people that will find this post interesting, but I am confident that those who do will find it thought-provoking. It’s also nice to share how a potentially mundane exercise such as distributing coupons can yield powerful insights that identify a new customer segment and a better media plan.
Many years ago, I managed the distribution of 10 million coupon books in the UK. Each coupon book featured 24 coupons for money-off on different items available at Boots, a UK retailer with a national footprint. We distributed these coupon books at and around 1,600 Boots locations. That’s 150,000 coupons per store. The coupons were distributed in highly defined catchment areas surrounding each store location. Because this was our first project with this client, we wanted to learn as much as we could from the exercise. So we considered spatially specific catchment areas (households located within a few miles of each store location) and time-specific catchment areas (households within a defined drive time from each location) before deciding upon a custom space/time algorithm that generated a rather amoeba-shaped area around each store where we would distribute our coupon books.
We utilized four ways to reach our targeted socioeconomic profile of households: shared distribution (our coupon book was distributed to households as part of an aggregated distribution of non-competitive offers from other advertisers); solus distribution (our coupon book was distributed on its own to households); precinct distribution(merchandisers stood outside but near to the stores and handed coupon books to passers-by); and in-store distribution(coupon books were on a rack in-store near the entrance). The coupon books and the coupons themselves were coded to enable tracking at the end of the day, once the sales data came in. We had this project covered every which-way and looked forward to seeing the results come in.
The resultant analysis that I was tasked to prepare was full of insights and ended up being several inches thick. But what no one expected to find was the strange phenomenon of coupons being redeemed up to a hundred miles away from where they were distributed, with clusters of such redemption activity happening in a dozen or so cities. We had anticipated a periphery of shoppers redeeming coupons in nearby towns – but why would a significant number of coupons be redeemed a hundred miles away? My first thought was disappointment; that perhaps, despite our diligence and quality controls, some coupon books got mixed up somewhere between the printers and the various distribution depots we utilized. Or that these redemptions were somehow fraudulent. It was only when I was standing on a train station platform that evening, making my way home, when it occurred to me that commuters might be taking the coupons they received at home and bringing them into the Boots store near where they worked to redeem them. Excited, the next morning I brought an InterCity map in to work with me and, sure enough, the dozen or cities perfectly coincided with British Rail’s busier InterCity routes. I had a smile on my face a mile wide when I presented this finding and my Eureka! moment on the train platform as the culmination of our research presentation to Boots, something we entitled, “Customer Migratory Shopping Patterns.” I felt like Sherlock Holmes solving a case.
We concluded that there was a desirable, promotionally responsive group within the Boots target customer segment that, coupons in hand, were entering trains, tubes, and buses on their way to work. Which is exactly where we suggested media buys be placed to coincide with the following year’s coupon distribution.