The first page of the latest Discount Voucher Report I have run for my newsagency shows that 28% of vouchers issued between February 1 and May 16 this year were redeemed. Of these, 18% were redeemed the day of issue, 40% redeemed between days two and seven and 42% redeemed more than seven days.
We have been running this program for fifteen months. It took between three and six months to really settle into the business fro the over the counter promotion through to measurable shopper awareness. Now, it is a considerable traffic driver and shopper engager.
A check of reports by other businesses and business consultants online and at business media sites indicates that the 28% redemption is at the high end. We know from our sales data, especially for magazines, cards and plush we are seeing discount voucher driven specific engagement.
I look at this data monthly as it has become a key measure of shopper engagement. It guides business decisions I make such as tweaking the loyalty program settings as well as encouraging team members by showing the positive impact of what they are doing.
Click on the image to see the detail. This is the first page of a report detailing all engagement. I use other reports for more detailed shopper trail analysis.
While I appreciate suppliers promoting brand-based loyalty offers in our businesses, I prefer the program I offer as it promotes my business and this is what matters most to me.
What we are doing in this business is easy for anyone to do. Any computer software should be able to offer you something like this including the reports. It’s much easier than getting cards made and having customers sign up for a program that may not be relevant to them given how often they can shop your business.
We are running at 26% redemption for the same period but our vouchers don’t appear to be quite as generous as yours and we allow 31 days redemption. It’s interesting how different settings are attaining reasonably similar results. We have a lower same day redemption and higher over 7 days redemption maybe reflecting the more local customer base in our centre. It is proving popular for customers producing some impulse same day sales and winning regular customers from Coles and other competition.
This is great Brendan – and you own the customer.
We are at 14% overall – HOWEVER the number redeemed between 2 – 7 days is 65% and over 7 days is 31%
Bernard Zimmermann owner of POS Solutions has blogged about this post today. While published it here today as business encouragement for newsagents including noting that it’s not a commercial post as What we are doing in this business is easy for anyone to do. Any computer software should be able to offer you something like this including the reports. Bernard sees my post as being from a competitor of his.
Bernard seeks to challenge and discredit my post on his blog. This is his right. But the assumptions me makes are wrong. I put a comment on his blog but it’s not yet been approved. Here is my comment I posted:
Bernard, as usual you have taken bits of data from here and there and cobbles a narrative to suit yourself and along the way ignored the facts.
This business is reporting 11% year on year increase in revenue. Not lottery or agency revenue but real product revenue. This is an extraordinary result. A result that is off the back of discount vouchers.
As I said on the Newsagency Blog – not a competitor blog but a newsagency blog, the data released today is a small snapshot of the true and extensive data set. The results of the business with excellent magazine, cards, gifts, plush and other growth shows the success of discount vouchers.
There is a Nextra shop in the centre using your software, lets compare results.
Here’s what I know – this store I wrote about is achieving channel-leading year on year growth. I think that has a lot to do with discount vouchers. I don’t care if anyone agrees with me – I am simply putting the facts out there for others to see.
Discount Vouchers are not about rewarding average, expected behaviour. With the right settings they get customers doing the unexpected. This is what I am seeing in my above average results.
My redemption rate is currently a miserly 2%. I need to work harder at tweaking the offers and ensuring customers are aware of it. I do get 40% redemption within 7 days, so that bit is working.
Some customers seem to think that $0.25 on a $5.00 greeting card sale is beneath them, but I do allow multiple vouchers to be used on subsequent purchases.
Then again, the customer who spent around $150.00 on high margin product was chuffed to return 2 weeks later with an $18.00 discount to claim on a further $80.00 purchase.
David it takes between three and six months to settle in. Maybe play with the settings to get a higher voucher value. For example, with cards delivering the best GP leverage this to create opportunities for customers to spend in other departments.
Bernard Zimmermann the owner of POS Solutions has written more about this at his blog – even though he is welcome to comment here at any time. Here is most recent response to him:
Bernard, I’m a retailer as well as the owner of a software company so I have a unique position to judge effectiveness of loyalty. Through Tower I have relationships with Vii Accumulate, Transactor, Plants Plus as well as three different loyalty programs directly in the software.
The discount voucher program about which you are obsessing – which is odd since you say you have the same thing (which I doubt) – in my own shop about which I wrote has driven extraordinary sales and gross profit growth. This business is significantly financially better off today as a result.
You either believe me or you think I am lying. Of course, I expect you to take the position you have always taken 0- that Mark is lying.
I published what I published on the newsagency blog as a newsagent to share the results I am seeing. I did so in the knowledge that you claim to have the vouchers too.
Pick your most successful Lucky Charm store running your points based program and lets compare publicly. I suspect you will say no as every time I have suggested a public comparison you have declined.
Given that the Federal Court action brought by nextra remains on foot it is inappropriate to discuss it here.
It is disappointing you moderate every comment posted on your company blog.
One thing I do notice with redemption is that women use it more and a lot of guys don’t bother.
Ours is only about 10% and I think the ones we are not seeing being redeemed are the 50c ones on magazines that are given to guys. They just grab their magazine and bolt, yet a lot of them are regulars.
I had a really quick read of the POS blog comments and totally disagree with ‘giving away margin to customers that would buy the product anyway’, we definitely are getting extra sales ‘to use their voucher’, don’t even need reports to tell us this just some time spent on the counter.
Jenny it could be the types of guys but we do well with them – especially if they are shopping with kids. We often add a line like: you can use it right away if you like.
The goal is to get an infrequent shopper purchasing something they did not visit today to purchase. I think is is what Bernard Zimmermann misses. This is a loyalty offer for where many shoppers are not regulars and or are tired of opaque points based systems.
Cris, good news in your numbers. There are no privacy issues around the comparison I suggest.
I call points based loyalty opaque because that’s what experts call it compared to other options today.
In my situation, 25% to 33% of my customers are not regulars and would not benefit from a points based program. This is where the vouchers shine.
It is interesting your comment about working on the most successful loyalty launch in the world. I will with Vii Accumulate – the Qantas owned company, the people behind the Woolworths loyalty, the company behind the Westfield and Subway offerings. All points based.
I mention this to indicate that points based is good in some circumstances but not in others.
In my case it is about incremental business plus about guiding / encouraging GP growth. The GP shift focus is key to our future.