Coupons and Rebates

Don't forget that only a small percentage of coupons are actually used. Newspaper coupon redemption rates in the grocery, drug, and mass merchandise industry average between 1 percent and 5 percent. Redemption rates for other coupon delivery methods (e.g., mail, magazine, newspaper four-color inserts) vary widely, but still amount to less than 10 percent for most products.

Coupons attached to the product itself are the ones that are most likely to be used, with redemption rates of 20 to 50 percent. However, these coupons tend to be redeemed by existing customers, so if your intent in distributing coupons is to get new customers, find another way to get them to your targeted audience. One good thing about coupons is that it's easy to monitor the results: you'll see every one that comes in.

A coupon should be good for at least 10 percent off the retail price of the product to attract buyers' attention and increase sales, with a 25 percent discount off retail considered more effective for mass market disposable consumer goods.

Coupons come in many forms, but the one thing they must have in common is an expiration date! If you forget this, you'll live to regret it.

Advertising Age magazine keeps up with these trends and a host of other topics which may be of interest to you as you think about advertising and promoting your business. If your local library doesn't have a copy, you can get on...