Coupon redemption rate
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Not only does the. T he referrals o n the websites can also generate favorab le word- of -mouth for. Although online coupo ns have many advantages, they also present some p roblems Fortin, Seco nd, there exi st risks o f forgery; some tec hnology-sa vvy. It might even further. Third, at some p oint, i nefficiencies might b e more d es irable. I n the Sunday FSIs, for example, it is unlikely to find a coupon for two or more brands in the. T his co nstraint partly induces brand switching, which is one of t he major. However, if a consumer has full co ntrol over what coupons can be redeemed in the online.
For this r eason, most. S ince services ca nnot be stored , over redemption and. Many researchers have been tr ying to identify key factors that influence coupon redemption behaviors. Some have examined the eff ects of coupon characteri stics on redemption behavior e.
Among the vario us factors,. A genera l findin g for the effect is that higher coupon face value. T his finding p redicts a positive linear relation ship bet ween face value o f a. In those studie s,. Raghubir explained this seemingly contrad icting phenomenon by using t he a vailability o f price. According to Rag hubir , when price inf ormation of a product is not.
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When a coupon o f fers high face value, cons umers w ould infer p rice of prod uct to be high. Although higher f ace. On the other hand, when p rice information is present, there. Therefore, as the face. Considering the nature o f the Internet, where vast a mount of information is easily acces sible, it is presum ed.
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O n the ot her hand, it may be d ifficult for offline coupon users to find the referenc e price infor mation whe n. F ollowing the se reasoni ng ,. Rede mption rates of o nline coupons will increase as face val ue of coupons increase. Redemption rates of offline c oupons will sho w an inverted U-shaped pattern as face value of the coupo n. Effect of C oupon Benefit on Redemption Rate. Most co upons of fer price discounts, eit her in per centage or do llar amount terms. Sa wyer and Dickson, Among the non -price coupon types, free sample is one of the.
Consumers would perceive same economic va lue o f co upons differently dependi ng on ho w a discount is. A pro spect theor y Kahne man and. Tversky , shows that wh en alternatives are p resented as gains, people choo se and judge the m differently than. For example, Kah neman and Tversky They took more risks whe n the. Us ing the diff erence in the shape of va lue f unction in t he prosp ect. On th e other hand, free sa mple or free product or ser vice type. Since they are usually difficult to integrate with the price, they are more likely.
Past r esearch on framing o f sales pro motion has found that non-monetar y pro motions ar e more likely to be. For exam ple, Campbell an d Diam ond foun d th at co nsumers regard ed non-m onetar y. In several coupon pr eference s tudies, it was observe d th at Korean co nsumers. Coupons with free of fers will have higher redemption rates than co upons with price discount, either in. The Co mpany prov ides coupons through two methods of distribution — offline and online i n ni ne ser vice.
T ra vel fitness centers, travel agencies, etc. T he o f fline distribut ion is done by p ublishing monthl y co upon b ooklets, which are mainly cir culated through. Some booklets are mailed to. The or iginal d ata set included in this study covers t he coupons distribut ed via online or o ff line from April. The total n umber of coup o ns for the time per iod is 5,60 7 April, Among t he 5, co upons, For the sake of accurate comparisons bet ween o nline and o ff line coupo n. Amon g the 4 ,, 3, Coupon b enefits are. Percent-off , Dollar-off , Fr ee Pr oduct or Service which is related to a service.
The coupon redemption rate is calculated as the number of r edeemed coupons divided by the number of. Redemption rate of o ffline coupon is co mputed as the number. In the case o f o nline coupo n,. The online coupon used i n this study is a co nsumer-requested type. In cons umer-requested type of coupon,. T herefore, w e can consid er the numb er of visits ma de to the.
Just visiting th e website is not enough to qualify it as an actual d istribution. Printing is eq uivalent to clipping in the offline co upon ca se. Although cons umers have to p rint the coupon to use it,.
Coupons sent via a smartphone app are redeemed at a rate of 8%% - much higher than standard email or direct mail. On average, the digital coupon redemption rate is approximately 77% significantly higher than print coupons. This can be both good and bad for businesses as.
T able 2 displays average rede mption rates o f online and offline coupons. As it can be see n in the table, there. Free product or service. H1 -1 and H pred ict d if ferent respo nse patter ns between coupon face value and rede mption rate for. T o test them, separate analyses are conducted for online and offline coupo ns. First, the hypothesized relationships are tested on the total sam ple by aggregating coupons.
ANOV A tests o n t he di ff erences in rede mption rate across different coupo n f ace. T he results are summarized in T able 3. T he r elationship. O ffline perce nt-off co upons show a non-significant. On t he other hand, t he r elationship patter n of the do llar-off coupon is found to be a negative li near p attern. Although we do ob serve d ifferent resp onse p atterns bet ween face value of coupon a nd redemption rate, the.
Therefor e, H2 -1 and H ar e not. Figure 1, 2, 3, and 4 repr esent patter ns of coupo n redemption r ates accord ing to face value of the coupon. Redemption rates sharing same alphabets m ean that they are not diff erent, and redemption rates sharing diff erent. Offline Coupo n Redemption Rate. Online Coupon Redemption Rate.
(PDF) Online vs. Offline Coupon Redemption Behaviors
The relationship patterns ar e further inv estigated across different serv ice sectors to examine any possible. Si milar service sec tors are grouped together in order to secure enough sample sizes for. Entertai nment, Culture ,. Remaini ng service sectors are not analyzed due to the small sample. Although the results o f trend analyses are not as st rong a s t hose of the. Although they fail to reach the level of significance, the F-vlaue patterns f or the o nline coupon of Entertainm ent, Culture,.
The reason for the significant q uadratic. Offline Coupon Redem ption. Online Coupon Redem ptio n. Also, th e plo ts o f red emption rate generally rese mble th e pattern of the to tal sa mple r esult. So , the evidence f or. Next, H2 predicts diff erences in rede mption rate by coupon benefit type are tested using pair-wise t-tests on. Si nce t here are two types of free coupon i. A lthough it fails to rea ch the level of statistical. Thus, H2 is ge nerally suppor ted for. For o f fline coupo ns, the redemption rate of free p roduct type coupons is si gnificantly higher than t hat of.
However , the redemption rate of free gift t ype coupons is s ignificantly lower tha n that of both per cent -off. T hus, H2 is partiall y. Service sector level analyses find a si milar pattern of respon se that we have ob serv ed from the total sample. Although th e results ar e not uniform across the examined service sectors , it can be co ncluded that the.
T otal S ample. This reduced coupon face value le vel might cause to detect any n on-linear pattern in this case. However , the redemption rate p attern to that level resem b les th at of the total sample case. In the ca se of. Several interesting results are found fro m th is study.
Therefore, coupon distrib ution through the Internet was d one ver y selec tively to. I n additio n, the industry exa mined in this study seems to be another. In Korea, major online users ar e the young 20s. T his overlappin g nature of online user gro up and main custo mer group might. Although different patter ns are expected acco rding to distribution method i. The red emption p attern is found to be. This r esult rules out the p ossibility of diff erence in t he availability o f. In actual red emption data , it i s prob able. T hus , rather than the.
Mobile coupon redemption rates to rise this year
For both online and. U ntil now , the relatio nship betwee n c oupon redemption and face. Results of t his study s uggest t hat ot her possible patterns co uld exi st in. The cubic patter n can be explained b y the interactive e ff ect bet ween perc eived savings from the coupo n and. However , af ter reaching a ce rtain point o r a. T hey ma y infer that the regular p rice is in flated.
When it p ass es another higher threshold p oint, it may be. In the cu bic trend of per cent-off co upon both online and. Although the trend analysis s uggests the po ssibility of a negative linear relationship patt ern for the dollar-. T he pair-wise post-hoc c omparison tests o n mean. T he pattern for. Further studies ar e warranted to confir m and verif y these new pat terns in the future.
However , in the case o f o ff line free. In an online co upon case, co nsumers would do wnload coupons after co nsidering a num ber of factors, s uch as. On the other hand, in o ff line. In t his aspect, although it is free,. This lack o f rele vancy may. The findings of this stud y pr ovide useful implication s to marketers who are co nsidering pro motion in the.
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Online co upons are f ound to be more eff ective in terms of. I f marketers can acces s t heir target seg ment us ing the. Internet, it is reco mmended to use online coupo ns. It will result in a higher rede mption ra te , contributing to a sales.
When marketers have to use both online a nd offline coupons, the y ma y not need d iff erent approaches for. Rath er , they. In t he case o f the do llar-of f framing co upon , although the p attern is neither o bvious nor stati stically.
T he online medium can significantl y red uce. T he advent of t he Internet has. Deal or No Deal? As it can be see n in the table, there. P ast resear ch on coupo ns, which. Many researchers have been tr ying to identify key factors that influence coupon redemption behaviors. One interesting develop ment in the Kor ean co upon industry is that coupons are more widely used in.
It is highly likely that the threshold points for both types of coupons are. T hus, marketers have to verify a nd identify the threshold points in their specific pro motion. The result of this study , however , can be used as a good star ting point guideline in their search e fforts. Although the results of this stud y pr ovide meaningful theoretica l and practical insights to coupon.
Fir st, due to the li mitation o f e mpirical data set, the eff ects o f. Future studie s should. Second, the data examined in this study only cover s. T herefore, the co upon red emption pattern s found in this study m ight be. Further replicatio n is warranted , especially in the consu mer packaged good s industr y ,.
T hird, this st udy only co vers one ki nd of offline coupons ; i. So me other kinds of o ff line co upons might have si m ilar c haracteristics to online coupons. Or, the red emption rates. Fourth , althou gh we use the same definition for redemption rate, actual meas ures o f. Interpretation and application of the findings o f t his. Finall y , t his stud y has a s trong point o f using act ual coupon red emption data. However , this adva ntage inevitab ly crea tes a li mitation of lacking the information on motivation al a spect of coupon. Althou gh there ha ve been several studies to e xamine cognitive and ps ychological proce sses.
Despite all the li mitations o f this study , the f indings of. He has a PhD in marketing and has. Internationa l Marketing , P sychology a nd Marketing and others. His research interests include areas of brandin g,. Some Findings B ased on. Journal o f Marketing Resea r ch , 24 November , 37 0- 6. Srinivasa n, and R.
Ci mato and A. The Characteristics of a Goo d.
Recommended publications
W in ning Strateg ies and T actics , NY: Mo nroe, and Y. E f fects on Reference P rice. Advances in Consumer Resea r ch , 17, A Cross - National Analysis of the. Resear ch in Kor ean , 13 2 , Naka moto, and A. Consumer Resp onse to. Usage an d Population Statistics , available at: Econometrica , 47 March , - The Strategy o f Sales Pr o motion , Seoul: Kor ea n , 9 1 , Thesis, Seoul National U niversity. Armstrong , Principles of Marketing , Pearson P rentice Hall. Resear ch in Kor ean , 15 Spec ial Edition. Netemeyer , and S. Nielsen , T r ends in Online S hopping: A Global Nielsen Consumer R eport , available at: Se menik , Advertising , South-W estern.
Internationa l Journal of Service Ind ustry Management , 6 1 , A Signal for Price? Marketing , 46 Fall , -1 1 3. Science Institute, 47 - P etrison , Sales Pr omotion Essentials: Th e 10 Basic Sales. NTC B usiness Books. Marketing , 30 January , 6. The distribution of paper-based [19] or digital coupons [21] to incentivize consumer purchase [2] is a widely applied practice in the retail industry [17], [18].
Currently, over bn coupons are distributed annually in the US alone [19], [20], totaling in billion US-dollars worth of retail revenue and savings for consumers [2], [21], [22]. Despite distribution growth, consumers redeem coupons less frequently, if at all [13], [20], [23]. While the metrics of measurement may vary from business to business, calculating return from an ecommerce standpoint is about determining which method of outreach worked best for a company.
Businesses have different variables as what constitutes for cost and profit on both sides of the calculation. ROI is measured based on a business' gross profit, not just its gross revenue. An ecommerce company wants to know how much bottom-line revenue it's making from a particular method of outreach. Coupons are an effective way for ecommerce stores to increase sales. They are also easy to track in terms of who's redeeming them and where they obtain the discount. Once a consumer makes a purchase on a platform's site, analytics provide a plethora of information to a business owner.
An ecommerce company measures digital coupon ROI with the following calculation:. The combined effort of coupon software and point-of-sale systems lets businesses know how many promotions were distributed, how much it cost, how often the coupons were viewed, how many were redeemed and what the average checkout total was.
Analytics software is available for ecommerce companies to track their digitally based promotions, including coupon distribution. Companies measure digital coupon return through advanced tracking capabilities and cutting-edge software. Businesses gain better visibility into their operations by releasing and tracking digital coupons, if the ROI is measured correctly. Start your free trial High-volume or established business?