Marketing ?

[Trok198]

Does anyone have any feedback on putting coupons on the back of grocery store receipts? A new Stop n Shop is going in November 1st about a 1/2 mile from my pizzeria. The Stop n Shop will be on the border of my town and a city. I’ve been told that their will only be a few other businesses with coupons on the back of every receipt and that 4000+ receipts will be given out each day. I was shown a bunch of testimonials from other pizzerias from around New England that have had great results. I’m definitely interested in doing this. However, they would like me to commit to a 6 month contract. What would you be willing to pay per month for this and does anyone have any experience doing something like this?

 

[paul7979]

From my experience, these coupons only work with a BOGO offer. Anything less is going to get very few redemptions. The problem becomes that the people who see your coupon on the back of the receipt, generally are regular customers of the grocery store and will always have coupons for your store from there. Is gaining a customer that only orders BOGO offers worthwhile? As far as the cost of this advertising, my guess is you can negotiate it down to 50% or less of their initial offer. The sales staff that sell these have huge commissions built in to the pricing.

 

[Chris]

Good morning,

In my experience, grocery store shoppers are a “coupon-friendly” bunch. Combine this general assumption with the popularity of coupon-based television shows, and a struggling economy, and I think it is a smart move.

If you commit to this type of marketing program, make sure that your offers are aggressive and provide the new customers with a reason to come back and order again. Use some type of call tracking, online ordering code, or promotion to track the response. Otherwise, you’ll end up “guessing” whether the grocery store campaign actually worked.

Just my $0.02, hope this helps!

 

[Pizzamancer]

That really depends on what kind of marketing you are already doing. If you have no marketing plan and aren’t doing much now, then your register tape coupons will be wasted money. The ROI is just not there in terms of new customer generation and/or customer retention.

On the flip side, if you have an online marketing plan (facebook, emails, SMS,…) and a great front end (new customer generation) and back end (database marketing) system set up that has a decent return on your marketing dollar, then by all means start to broaden the field.

 

[26.2MilesforPizza]

I’ve never done it but listened to their sales pitch. They wanted a year long contract at $400 per month for me. I told them that I didn’t have enough faith in their program to be locked into that big of a contract. I can’t remember the number of impressions that they promised me.

 

[Chris]

Trok198 - Just thinking out loud, but let’s do some quick math…

If the grocery store program is approx $400 per month, for 6 months minimum, you are looking at a total spend of $2400 investment. What’s really scary is that the response rates could vary like crazy.

If this is the case, why not just use Every Door Direct Mail to send 10,000 households your full-color menus/coupons for 2,900?

That way, you can GUARANTEE that your menu will be seen and used by new customers. I think if you are going to spend the $2400, you might as well spend an extra $500 to get better results and fight off competitors at the same time. If you get a 3% response rate with a mailer (which is on the low end for pizzerias) you will get 300 new customers/calls. If you average order size is $15, you’ll easily make a profit. If the response rate is 4% or higher, the numbers will really start looking good (I’ve seen 3% to 12.5% response rates over the last 5 years).

I hope this makes sense, just be sure to consider all options and choose the one with the best potential ROI.

-Chris

 

[Trok198]

Thank you very much for the replies. The salesman is calling today to see what I’m going to do. Based on the responses thus far I’m not going to do it at the current price. He initially wanted $400 a month for a year and pretty quickly came down to $300 for 6 months. So I’ll probably tell him $200 for 3 months and if he’s able to do that I’ll try it out.

 

[system]

This is one of those marketing ideas that does not cost the company that is selling you the ad space much at all. I would think they would bring in a very low and attractive price schedule to get people to try this and then bump the price up after you see if it works or not. The $400 a month for a year seems high. I think your offer of $200 for 3 months and then maybe agree too $300 for the next 3 and then up too $400 a month if and when you really see returns coming in. Also, throw the multi-month contract out after the initial 3-6 month period. If you decide to stick around after the 6 months…make sure you are on a month to month basis. Give them a 30 day cancel option so you do not leave them hanging…but I wouldn’t see a need for a 6 or 12 month contract.

I do have a question…am I correct in thinking that the ads are printed as the receipt prints or are these pre-printed on the back of the rolls? I know our local grocery store does these and I am pretty sure it is printed as it comes out. I might be wrong. One last comment…even though I know they are on the back of the receipt…I very rarely even take a look! I usually only pay attention when the checkout person tells me the coupon on the back is worth $xxx off of gas! Our store does these unique discounts for gas when you buy a secret combination of certain items. So every once in a while you can walk out with a coupon for $0.20-0.35 cents off per gallon.

Hmm…this has me thinking. Everyone needs to buy gas. Why not team up with a local petro station and see if the two businesses can cross advertise for each other and offer some type of discount. Something like a free pizza with 4 fill-ups. There are so many ways that all food and non-food items are cross marketed these days and the ones that seem to always get my attention are the ones that I have to purchase and not just want too purchase. Show me a discount on something that I will end up buying either way…so when I see that I can save on it anyway…I will be more of a happy customer and more likely to come back for another visit. :idea:

 

[paul7979]

I’m not sure how short of a term they will go as they do preprint the rolls and they need to preprint a whole lot of them to get the best price. I do think you are on the right track negotiating the price to about 50% of the original offer. Just remember, if you don’t put an aggressive offer on these, you’ll hardly see any response.

 

[system]

The preprint does bring the cost up for them and I agree with the point that if you are not aggressive the receipt and your ad is going to be filed! Most grocery store now also have a coupon printer at the checkouts that print coupons based on your purchases. What would it take to tap into that system instead and to just have every 100th customer get a coupon for a free pizza. Every 20th customer gets free breadsticks and every customer gets a basic coupon of some sort. I am just trying to think of ways too better spend your marketing dollars.

 

[Pizzamancer]

qcfmike:

This is one of those marketing ideas that does not cost the company that is selling you the ad space much at all. I would think they would bring in a very low and attractive price schedule to get people to try this and then bump the price up after you see if it works or not. The $400 a month for a year seems high.

Not really. They are in business because they can attract enough new customers to keep them in business. Looking over my own data and broader retail data, the best redemption rate you are going to get from a custom printed receipt coupon (ie one designed on your customer’s tastes) is about 3%. Most response rates for coupons on the back of the receipt are 1/10 that. About 3 customers every 1000 receipts.

At $400 a month in advertising costs, you are going to need nearly 900,000 of those coupons to go out to break even (assuming an average order of $15 and 10% of sales spent on marketing).

Ask for some customer phone numbers. If other customers can give you some hard data, then take a look at it. I have never met one who could pull up an excel file with marketing $ spent compared to ROI and redemption rate, but who knows, YMMV with that one (but I don’t think it will).

Spend that $200 or $400 with Taradel on a monthly direct mailer. (Full disclosure, I have nothing to do with Taradel, but he has some good work, and is selling proven marketing that can be corroborated by about anyone on this bbs).

 

[Chris]

Thanks for the kind words Pizzamancer. The most important thing is to test various marketing vehicles/methods and always track results. Without data, you can’t determine the ROI or make informed decisions moving forward.

 

[benmahoney]

I have had mixed results-in one location best $400.00 a month ever spent. In the other location worst idea ever. I think what you should do is talk to merchants already on the coupon, see how they feel about the program. Also make sure you are exclusive. One problem I had was that the grocery store was not allowing us to advertise delivery as it would be in competition with their deli department.

 

[Pizzamancer]

benmahoney:

I have had mixed results-in one location best $400.00 a month ever spent.

Wow. You are the first person in 25 years of pizza who I have ever heard this from about supermarket receipt coupons.

But

In the other location worst idea ever.

This is the typical response.