Deliver Magazine. Mail Marketing Strategies from the U.S. Postal Service®

A Faster Clip

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With cash-crunched consumers hunting for bargains, Valpak is capitalizing on the explosion in coupon usage.

After nearly two decades in decline, the coupon is back. Last year marked the first time in 17 years that consumers used more coupons than they did the previous year. An estimated 3.3 billion consumer packaged goods coupons were redeemed in 2009 — a whopping 27-percent increase over the 2.6 billion redeemed in 2008, according to Inmar, a coupon processing company.

It’s no surprise that the uptick coincided with news of the U.S. financial crisis. But despite the tight economy, marketers invested heavily in coupons, boosting the number available to the highest level in more than 30 years.

“Brands saw coupons as a key to maintaining brand strength,” says Matthew Tilley, marketing director for Inmar’s promotion services division. “If they reduced their promotional presence, they stood to lose sales to lower-priced competitors and store brands, so they doubled down hoping to create brand loyalty once the economic dust settled.”

One of the companies that benefitted from the coupon surge was Valpak, which gives local and national advertisers an affordable way to reach targeted audiences with mailed coupons.

But unlike other brands, Valpak’s challenge wasn’t so much awareness. (Its signature blue envelopes loaded with coupons and special offers already were hitting 42 million homes nationwide each month.) It was to remain relevant to coupon clippers, including those who prefer digital delivery.

“If consumers receive a packet of coupons that aren’t relevant to them, it won’t be long before they stop opening our envelope,” says Greg Bicket, president of Cox Target Media, Valpak’s owner.

But for today ’s consumer, remaining relevant also means making coupons available where people are looking for them. For some, that’s online. To keep up with changing consumer wants and needs, Valpak began syndicating its coupons to 150 online locations. Coupon links on those sites bring shoppers back to Valpak.com, where the Largo, Fla.–based company tracks which coupons are printed or viewed and provides the information to advertisers. Valpak also recently began offering mobile applications for smart phone users seeking coupons based on their location.

In an effort to showcase the company’s ability to stay current with trends, it collaborated in March with a popular daytime talk show for a high-profile promotion involving augmented reality. Valpak house holds received an envelope with an icon that triggered an augmented reality experience on the show ’s website when the icon was held up to a webcam. The promotion required users to first register online for a chance to win a trip to a show taping, then use their augmented reality icon to determine if they won a cookbook. The icon also triggered a thank-you video from the show ’s host.

“Early research suggests that consumers are going to include augmented reality experiences in their product purchase research, and we’re in an excellent position to help make that possible by adding the icons to our paper coupons,” Bicket says.

Even though Valpak is dabbling in new distribution methods, the company maintains a stern commitment to print. “More than 90 percent of our business comes through direct mail, and we don’t expect that to change anytime soon,” Bicket says.

To that end, the company has invested $200 million in a 10-acre, state-of-the-art printing and mailing facility that runs 24 hours a day, six days a week.

Valpak franchisees diligently work with advertisers to create an effective offer to be printed on an insert that will join, on average, 40 others in the blue envelope. Using data compiled by the company’s in-house research department, franchisees advise clients on appropriate reach, recommended frequency and effective offers.

“I’ve been with franchisees when they have turned down advertisers who either aren’t a good fit or aren’t able to make the right offer to consumers,” Bicket says. “It’s one way franchisees help keep what’s in our envelopes relevant.”

Bicket adds that there are a lot of ways to jazz up what is already a very effective four-color coupon that is well established with the public.

“We can give it new dimensions that sustain interest and relevance to multiple generations,” he says. “While one might prefer a traditional print coupon, another might be interested in more high-tech features.”

Recognizing that people interact with media in different ways, Valpak expects to see a growth in digital options to as much as 10 percent of its business in five years. “Even so, we see a long future in print,” says Bicket, “because when our advertisers combine digital with print, they get better results.”

B-to-C Marketing, Integrated Marketing, Large Business, Medium Business, Small Business, Targeting
 
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