Customer Behaviour

Nobody Wants to Be a Tightwad

It would be logical for consumers to use a coupon to save money rather than pay full price for a purchase. Yet redemption rates for coupons are really quite low! Is it simply that consumers don't have the time to clip and retrieve coupons from newspapers, magazines or product packages?

Researchers have discovered another reason why consumers might not like to redeem coupons: They make the buyer look cheap. Consumers are concerned with more than price when shopping—they are also aware of the impression they are making on fellow shoppers. They not only worry about others' impressions of the quality of their purchases, such as the amount of junk food in their shopping baskets, they also care that others might consider them stingy if they whip out a stack of coupons.

Consumers do not behave the same way, however, if the coupon is attached to the package or if they make the purchase online. In the first case, the consumer is not actively going out of his or her way to save money, so there is no negative connotation attributed to the behavior. In the second case, no one sees the online purchase being made, so there is no fear of others' negative reactions.

The Po!nt: To make coupons a viable part of your promotion arsenal, you may want to rethink how they are distributed.