For context, read The Coupon Problem.
My favorite high school dining spot did coupons all wrong. Here are 2 components contributing to their failure:
- Deal was too sweet (50% off is insane)
- Distribution was to existing customers
We already agree their value prop is compelling. It’s hard to say “I’d rather get Taco Bell” when an [already reasonable] $8 combo becomes $4 + tax/tip. So let’s drill-down on the other piece.
Distribution.
Frontera probably bought address lists from a marketing list company. Their platforms are built on channel partnerships and of course, software. The software scrapes the internet in search of human meta data (info about info) like age, location, education, job title, and known interests.
What Frontera could have done is massage these marketing lists.
They could have cross referenced last names from their credit merchant income statements and removed the dozens (if not hundreds) of existing customers. They could have analyzed these lists in an Excel spreadsheet with filters like “if a customer has purchased 3 times within the last 3 months, do not mail them bogo coupons.”
But that’s primitive and manual. Here’s a better idea:
Encourage existing customers to join a new loyalty program. Let them opt-in with a checkbox on their receipt, or as they leave the restaurant (hint: clipboard next to the mints), whatever. Just make it low friction. Be genuine but vague with the promise — “sign up to receive regular discounts on your favorite Tex-Mex.”
Now you’ve improved your coupon problem tech-free. Use this list to cross-reference and remove all loyalty program customers from the BOGO coupon distro list.
Now you can go back to rewarding existing customers and winning new ones. Nobody will know the difference and the Ryan Kulp’s of the world won’t blog you to shame about it 7 years later.