PC&D MAGAZINE
Build a winning coupon strategy
From Volume 22, Issue 10 - October 1998
Feature
Goals, targeting are the keys.
by: George Akers

Almost every business is engaged in couponing of some kind. But what kind of coupons work best? What offerings work best? What layout or design returns the most for the money invested and how do you disseminate coupons to get the maximum return? These are the questions that plague carwash operators.

Over the years, I have tried every form of couponing known, including radio and TV coupon gimmicks. I always wanted to get the best return on those coupons, both in terms of increased sales of a certain item - such as a package - or increased volume of cars washed. Over the years, we learned some tricks to get both.

The frequent washer coupon

The greatest response we ever had was from the Frequent Washer Coupons given out at our washes on the cash register receipt. As part of the transaction, right under the charges-for-services portion of the ticket, we had in bold print FREQUENT WASHER.

Each receipt carried two frequent washer offerings - a coupon good for $3 off a package if the customer returned in 10 days, and $2 off a package if the customer returned in 30 days.

The cash register calculated and printed the correct return date. Cashiers who drew attention to the coupon when presenting the receipt did wonders for increasing returns.

Direct mail works

Our next highest coupon return rate came from direct mail to a customer database generated either by our wash or from a company with whom we did business, such as a petroleum company whose gas we sold or whose oil we used in a quick lube.

After getting a printed, gummed label list of their credit card holders living in our ZIP code, we would develop a coupon, have it printed on postcard-size stock and attach the labels.

We mailed bulk rate to save on postage and, because the labels were by ZIP code, it was easy to presort the coupons in accordance with postal regulations.

This coupon method always yielded high returns - about 10 percent.

Other coupon methods

The third method is the local or large coupon mailers. These companies send out from 50,000 to more than 100,000 coupons with each mailing.

A good return on this type of mailing is 2 percent to 3 percent. From a cost-per-return perspective, I felt it was a poor investment. However, coupons sent out with utility bills to ZIP codes around my carwashes did have a good return, and I used them regularly.

Newspaper couponing yielded the poorest return of all. It didn't matter if we placed coupons in the largest metropolitan paper or the neighborhood newspapers.

If you insist on using newspapers, place coupons in either the sports section or the business section for the best return. Even here, the return is low for the dollars invested.

Have an objective

When planning for the best return on your coupon investment, focus on the desired objective. Is it to increase volume, to raise sales per car, to introduce a new product or service, to let the public know of new ownership or new management, to draw customers back for the season or after an extended period of unfavorable weather or economic conditions?

You must have an objective for each coupon offering. Know it. Write it down. Discuss it with those involved in the development. Once the layout and wording of the coupon are reviewed and before it goes to print, compare every aspect of it with your written, stated objective.

Once you have zeroed in on the objective, determine the most effective way to reach your target public. In most cases, your target public will be the people living in ZIP code areas around your facility.

It could be apartment complexes, a business segment such as a manufacturing complex, an office complex or a hospital or medical complex. All are fair game for coupon business development.

To further develop this type of coupon strategy, an advertising agency will probably be of more assistance than a coupon company.

I always seek a partner to share in the cost of the coupon. There is usually the possibility of participation with one of the companies whose products you sell.

Ask every vendor you do business with if they have any type of advertising allowance. Usually it is necessary to have their logo appear somewhere on the coupon to get their financial participation. Don't overlook the fact that when a well-known national company's name appears with yours, it tends to give your business more credibility.

Let's talk objectives

Earlier I mentioned having a definite objective for each coupon offering - stated and written. Let's take a look at the Frequent Washer Coupon. The objective here was threefold:

1. To increase the frequency with which customers get their cars washed to every 10 days or at least every 30 days.

2. To increase sales per car by offering attractive pricing on packages.

3. To overcome the resistance of regular customers to a recent price increase for the basic carwash.

Offset a price hike

A seasoned carwash operator once told me never to discount the basic carwash - it's already too low, and to discount it further is to lose money at your base. Discount your packages or an extra service where you have margin built in.

He is right, of course. But I have found that if you offer a discount a month before a price increase takes effect and continue it for one to two months after the increase, the regular customers have little resistance to the raise.

The infrequent customers - whose vehicles are harder to clean anyway because they are dirtier - pay full price. Remember, this coupon is controlled by the use of your cash register at your carwash.

How to design a coupon

Now let's take a look at the typical mail-out or print media coupon. Here our objectives are:

1. Increasing carwash volume

2. Encouraging return wash visits

3. Increasing sales per car

4. Introducing the effectiveness of package offerings.

It is important to give the dollar amount your customer will save. To avoid confusion, give the regular price and the discounted price. If there is room, you may list the savings percentage.

Be careful, however, not to have too much clutter. Do all you can to give important but brief information: your location, participants, price and savings, what's included, expiration date and, if desired, no pyramiding with other coupons or offers.

Use your coupons effectively. Don't give away the store. Thank people for using them, and by all means try to get them into your customer base for follow-up.

George Akers is a carwash consultant in Tampa, FL, and a longtime contributor to Professional Carwashing & Detailing.

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