The Secret Life of Coupons

You are probably a couponer to some degree and that is what brought you here, to this wonderful blog. Whether you are casual or hardcore, I think it would be really valuable for us to take a hard look at where the coupons we are using are coming from and why they are there. First, let's ask some obvious questions:

1. What is a coupon?

2. Who makes the coupons?

3. Why do I use them?

4. Why do the people who make them want me to use them?

These seem silly, I know, but in the highly scientific and highly calculated marketing world we live in, sometime the real answers get lost. With that in mind, lets try to answer them.

1. What is a coupon?

Convention wisdom says coupons are a bunch of pages in the paper that you can use to save money on stuff. You cut them out, take them in, and get a discount. These days this applies to any mobile or internet coupons too, but the general idea is the same. Coupons are ways to save money, right? Wrong. Coupons are a tactic. The truth is that almost every coupons you see has been carefully calculated and the price adjusted to account for the "discount". Buying a DVD for $15.00 using a $5.00 coupon is only a good deal if the movie is actually worth $20.00. But what if the movie is only worth $15.00 and we just got tricked into thinking it was a good value? This brings us to our next question.

2. Who makes the coupons?

Again, seems simple but we rarely think of the "who" in terms of motives. Brands and retailers are the ones who issue coupons. This means the people who want us to buy their products are the ones determining what "value" means. Isn't that a little strange that we are trusting them to set the value AND letting them adjust that perceived value to introduce a sense of urgency or scarcity for their items? These coupons are starting to sound more like optical illusions than ways to save.

3. Why do they want me to use them?

The first thing that might roll off your tongue is "They want me to save money on their product so I'll buy it instead of something else." This is somewhat true in a very broad sense, but we would need to change it to "They want me to THINK i'm savings money..." As we said before, it's just a fact of life that businesses have promotional budgets and adjust prices to cover discounts. Aside from clearance, big discounts just mean the price was over inflated to begin with.

So with our understanding that coupons are budgeted tools to change our perception of a product without affecting the actual value of the good, why do they want us to use them? The answer is exposure. For instance, say you hear that there is a coupons to get a $100.00 pair of headphones for 50% off. We don't really need headphones and aren't even considering any that are regularly $50.00, but these are 50% off! You scour the papers and internet looking for this coupon because the headphones are half price! Well we know that the actual value of the headphones is probably well below the full retail, the business wouldn't sell them to us otherwise. 

Once we spend half an hour, we find the coupon and go buy the headphones and think we got a steal. That coupon has done three things: 1) effectively driven us to make a purchase we didn't plan on and didn't need 2) effectively changed our perception of $50.00 from being expensive, to being cheap 3) gotten us to willingly and actively engage with their brand for an extended amount of time. The key is the last one. Getting someone to think actively about your brand for half an hour goes miles toward building a repeat customer. Interesting, isn't it.

4. Why do we use them?

This part is key because there are two major categories of users when it comes to coupons: "Savers" and "Engagers". As we look at each I encourage you to be honest with yourself about which one you are. Your motivations are likely very different for one versus the other. 

"Savers" are the people who are after that discount. They tend to like more general and easily accessible coupons. This is the lower involvement, more casual of the two whose primary driver is to increase the sense of "value" they get from shopping. Sometimes this will mean using a coupon only on big purchases or only ones they just happen to see, but the key is that "savers" use it to supplement shopping rather than use coupons to define their shopping. 

"Engagers" may often think they are using coupons to save, but are likely driven more by the engagement they feel with the brand through the use of the coupons. These people are the ones who spend hours looking for very specific coupons and pride themselves on maximizing the amount they save. While these people will likely save more, I would argue that their motives have nothing to do with money. The engager seeks the sense of empowerment and superiority they feel over the brand by having "beat the system". The time spent is often a good indicator. There are very few instances in which the savings from intense coupon usage will outweigh the value of the time spent (in a conventional sense). It's important to note that there is nothing wrong with this reasoning. There is more to life than money and engagers do it because they enjoy it, just not for the reasons we would suspect. 

After taking a shot at figuring out which one you are, how do you think that relates to your personal coupon habits or shopping habits in general? What are your real motives?

Conclusion

With all of this in mind, the important things to think about with coupons are being aware and balance. Focusing on the first will make the second come naturally. Next time you are cutting or printing, think about how and why the brand is trying to connect with you. Think about what you want out of it and what they want out of it. Paying attention to these things could save you tons of time and money while also making you a much smarter shopper. Coupons are often not what they seem and just being aware of that will be helpful next time you head to the store.

Thanks for reading!

Chris@scannibal