Voucher Codes – An Added Cost That Is Open To Abuse Or A Valuable Customer Acquisition

And Retention Tool?

A research led presentation that explores the UK consumers approach to online shopping in a variety of vertical sectors. With the ever increasing volume of online voucher codes and money saving initiatives available to the consumer, has buying behaviour changed? This presentation will use

real consumer information gathered by iCD Research to demonstrate how the customer journey and decision making process had changed

during the credit crunch and how it has impacted the retailer.

Paul has a long and established background in market research, working in Australasia, the Americas, EMEA and the UK with clients that included Microsoft, the International Herald Tribune, O2, Tourism Australia and Virgin Money, to name a few. In 2005, he was appointed research and insight director of The iD Factor and 18 months later was responsible for the creation of the Group’s research consultancy division, iCD Research. Paul now oversees both expanding divisions.

Paul Dixon: Global Managing Director: Research

Gavin is responsible for multi-divisional sales within TMN Group as well as supervising the marketing of the group and its divisions. Gavin has worked for the Group since April 2002 and during his career he has worked his way from a sales account manager, to Sales Director and then Managing Director of tmnmedia. Gavin has worked extensively in a number of online methodologies - Affiliate Marketing, Email and Lead Generation.

Gavin Male: Group Sales & Marketing Director

Presenters

A history...

The coupon culture explodes

1887 - The first coupon appears....

Investment from business

Change to consumers mindset

The UK market for coupons

20% growth in total value redeemed from £400 m to £497m

29% increase growth in coupon distribution

Direct mail dominating distribution with 47.1% of market share

54% of coupons delivered carry unique tracking codes

Multi brand promotional offers amount for 20% of distribution

Not a TRADITIONAL coupon culture..

Present Day...

• Brands using voucher codes... Dell, M7S, currys, Argos... There are 1000’s of brands... The only one we’ve seen ‘backlash’ is John Lewis... Who ironically grew through voucher codes

Sainsburys invest multimillions in a coupon loyalty scheme

650% growth over the past 12 months (ISP)

10,800,000 results for ‘voucher codes’ in Google

Over 50 websites paying for PPC clicks on Google.

IAB regulates voucher codes best practise as of beginning of 2009

Majority of brands open to using online voucher codes.

A common held theory...

...to cost comparison sites...

Content and review sites...

...to voucher code sites...

...to cashback sites...

...to the store and purchase...

Cookies dropping here, there and everywhere.

Consumers follow a very long purchase process in order to get to their final purchase...

We know the affiliate view...

But what’s the consumer perspective...

The Consumer View

For the first time in over 18 months, consumer confidence is up

Consumer Confidence Index

And there’s never been a better time to purchase major goods

Major Goods Index

Or household goods

Household Goods Index

Unrivalled Understanding of the UK Consumer

Consumer confidence is UPIt’s perceived to be a GOOD time to

purchase

How does the UK consumer purchase products?

FACT 1

The consumer decision making process hasn’t changed over time

The customer journey

Need recognition

Information search

Evaluation of alternatives

Purchase decision

Purchase evaluation

FACT 2

Within the purchase process, consumers are taking different routes, variations and seeking numerous possibilities – all of which, are linked

to the value proposition

We spoke to the population to see what had changed in the last 18 months

18 months ago, ‘coupons’ were something you would

associate with American grocery shopping – now I

find myself actively searching for codes for most of my purchases

I always shopped online for

convenience, now I do it for the price

benefit

You have to be more savvy now and explore all your options

This is the power of the Internet

isn’t it – there is always a better deal out there

I find it difficult to trust what is

genuine and what is basic SPAM.

There’s always some reward to purchasing particular

products – you just need to work out which is best for you

If I was 50% online

shopping before the

credit crunch, I’m now 90% -

at least

The public said...

FACT 3

The opportunities to engage before the journey are endless

Television

Travel

DVD

Need Recognition >>> Information Search

OnlineOffline

OnlineOffline

OnlineOffline

Where Started Process

Time Spent During Stage

2-4 weeks

Less than 1 week

1-2 weeks

What people do when searching the for information about the product

Spoke to expert in the fieldSpoke to colleagues

Read newspaper/magazine articles or reviewsLooked in catalogues

Visited online auction sitesVisited forums

Searched for recommendations onlineSearched for voucher code discounts

Searched for cashback optionsVisited potential providers/brands stores to evaluate

Visited an online shopping portalSpoke to friendsSpoke to family

Visited a price comparison websiteUsed a search engine

Went to potential providers/brands websites that could offer this product/service

Increased opportunities to engage - Information Search --- before start of

Purchase Decision

Spoke to expert in the field

Read newspaper/magazine articles or reviews

Visited online auction sites

Searched for recommendations online

Searched for cashback options

Visited an online shopping portal

Spoke to family

Used a search engine

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%

FACT 4

The opportunities to engage within the purchase process still exist

During the purchase process

Spoke to expert in the field

Read newspaper/magazine articles or reviews

Searched for recommendations online

Visited forums

Spoke to friends

Searched for cashback options

Spoke to family

Used a search engine

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%

Why do people engage with multiple channels throughout the purchase

decision?I had made the decision and

found the flight but at this stage I still thought there might be a

better deal out there – no harm in one final search

It asked me if I had a voucher, which I

didn’t, but I went to find one – result!

I’m a member of various shopping sites so I just

wanted to see what they would offer as I get cashback with them

Spoke to my friend who bought the

exact same model to see what website she

went through

A final check on the prices

Quick scan on ebay to see whether I was making the right

decision

FACT 5

Voucher codes are increasing in usage with a varied but attractive user profile

Profile of Voucher Code Users

22% of UK recent shoppers interacted with a voucher code site at some stage of their consumer decision making process.

54% Male

48% Aged 18-34

47% Professional

17% Earn over £50,000

13% Social Grade A

Profile of Cashback Users

25% of UK recent shoppers interacted with cashback sites atsome stage of their consumer decision making process

55% Male

57% Aged 18-34

52% Professional

18% Earn over £50,000

14% Social Grade A

Similar Profiles – Different Consumers

45% Have used Voucher Codes or Cashback Sites during the entire purchasing process

22%Have used both Voucher Codes and Cashback

Sites during the actual purchasing process

Why did you use a voucher code website

Voucher codes are useful, sometimes, they give a good discount on the purchase I

make.

I tried to use some, but was unable to find any relevant

ones- I wanted to save some money if possible.

I looked for discounts to see if I could save any money on

the flights

Try and get the best price

Because it brought the price down

further

Where did you go?

I originally searched and found a couple of good sites which are bookmarked now

and I use when I need to

There are a few good sites I tend to use to browse for discount codes, as larger,

popular retailers sometimes have a discount (and I try to find the best deals and get

the best price I can)

Looked for holidays with voucher discounts online,

catalogue and at travel agents.

Just searched for it – google and I found it pretty quickly

Came in the email

What makes a good voucher code site

You have to judge whether you trust the site and you have those first couple of

minutes to make the judgement call.

Just make it simple to understand. So many of

them requires you to jump through hoops to find the

one code you need – I want something simple and fast

A well designed site that is simple to use

Something that does what it

says it is going to

What makes a bad voucher code site

Clutter – just make it simple and I’ll go there but some of them

look like grads have put the site together as part of a project

There is amazing amount of absolute crap out there – one site

had more pop ups than codes and when I made a simple search,

it delivered nothing of use – can’t even remember the name

of it but don’t ever go there

When it doesn’t deliver. If you’re a voucher code – I suggest you

actually offer codes rather than trying to sign me up for other

things

Complicated site – it needs to be quick

FACT 6

Voucher codes are best suited towards specific vertical sectors

Vertical Sectors Have Searched For Voucher Codes

Antiques & Art

Sports & Outdoors

Toys, Kids & Baby

Health & Beauty

Home & Garden

Small Appliances

Groceries

Entertainment (Movies, Music, Games, Books)

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0%

FACT 7

Voucher codes drive satisfaction; loyalty and advocacy

How Satisfied Were You With The Process You Went Through

Average

Used Cashback Site

Used Voucher Codes

0%10%

20%30%

40%50%

60%70%

80%90%

100%

Rated 1-4Rated 5-7Rated 8-9

How likely would you be to recommend the same process

Average

Used Cashback Site

Used Voucher Codes

Rated 1-4Rated 5-7Rated 8-9

FACT 8

The promoter MUST do it right, otherwise you run this risk…

You mentioned you used a voucher code site, but were dissatisfied with your experience. In your own words,

can you explain why?

Why would I bother again. Yes, I could have saved £25 but for the

25 minutes it took me to navigate through the site, trying to find what I thought would be just a simple code – I was more

frustrated than that I would have been if someone had

ripped up £25 from my wallet in front of me

Have you seen the voucher code sites out there – have a look and then ask me the same question

Online vouchers should be as simple as cutting a voucher from

a catalogue. It’s not. Scissors for me these days

Leave a loophole and it will be exploited...

Consumers aren’t stupid

Managed correctly, coupons can be highly effective

Must have customer engagement

Target audience with relevant offers, and brands

BUT...

A Valuable Customer Acquisition and Retention Tool

CONCLUSION

Many thanks

gavin.male@tmngroup.com – TMN Group – All Servicespaul.dixon@theidfactor.com – TMN Group – Research

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