Couponing Practices: Tradition Trumps Technology

couponingWith big changes happening every day in the way that consumers are interacting with brands and products, a big question is how quickly they’re changing their habits when it comes to the use of coupons.

Perhaps surprisingly, the results of a new 2014 Simmons National Consumer Study conducted by Experian show that “traditional” couponing activities remain far and away the most prevalent consumer activity.

First of all, the proportion of U.S. households that uses coupons of any sort is right around three-fourths (~74% according to the recent Simmons survey).

And we all know the single biggest reason why people use coupons:  to save money.  That rationale dwarfed any other among the survey respondents:

  • I use coupons to save money: ~64% of respondents mentioned
  • I use coupons to try new products: ~23%
  • Coupons incent me to try new stores: ~7%

But then the data points begin to deviate from where marketers may think their consumers’ minds are at (or where they might wish them to be).

Consider how many of the following popular couponing practices are distinctly “old school”:

  • I use coupons from in-store/on-shelf coupon machines: ~55% of respondents cited
  • I take advantage of rebates on products: ~50%
  • I use free-standing inserts from newspapers: ~46%
  • I use on-package coupons: ~37%

coupons on smartphoneCompare that to the far-lower engagement levels with “new school” couponing practices:

  • I use coupons delivered by Internet or e-mail: ~30% of respondents cited
  • I use my smartphone to redeem coupons at the store: ~17%
  • I have used a smartphone coupon app in the last 30 days: ~9%

These results show that if companies decide to embrace coupons as part of their marketing effort, they’ll need to pay as much attention (if not more) to traditional couponing methods than to newer practices.

Old habits die hard … at least in this arena.

Experian Takes the Pulse of Hispanics in the United States

Hispanic Market Report from ExperianIt’s no secret that the share of the American population identifying itself as Hispanic or Latino is growing.

The latest evidence of this is a report just released by Experian Marketing Services. It shows that ~16% of Americans age 6 and older fall into this category.

That’s an increase of two percentage points in just six years.

But here’s an even more eyebrow-raising statistic: Among Americans aged 6 to 34, nearly one in four are Hispanic or Latino.

What this means is that the geographic zones of the country usually associated with Hispanic population – California and the Southwest, Central and South Florida, Chicagoland, and New York City/Northern New Jersey – will surely expand to encompass other geographic clusters as well.

Experian’s research also shows that Hispanic households account for approximately 10% of all discretionary spending in the U.S.

But in select metropolitan areas, the share of spending by Hispanic households is greater — sometimes substantially so:

  • San Antonio Metro Area: ~60% Hispanic share of all HH discretionary spending
  • Miami: ~37%
  • Los Angeles: ~33%
  • Houston: ~17%
  • San Francisco: ~14%
  • Chicago: ~12%
  • New York: ~12%
  • Dallas: ~11%

While the country now has many second- and third-generation Hispanic individuals and families, the Experian research finds that even with these consumers, emotional ties to the Spanish language carry over to companies that advertise their brands in Spanish.

Not surprisingly, more than half of Spanish-dominant Hispanics agreed that when they hear a company advertise in Spanish, “it makes me feel like they respect my heritage and want my business.”

But among English-dominant Hispanics, ~30% feel the same way as well. And similar percentages feel a much greater sense of loyalty to such companies.

There’s another interesting takeaway from the Experian research, too. Hispanic consumers tend to be more optimistic about their personal financial situation – and that of America as a whole – than their non-Hispanic counterparts.

This sense of greater optimism has been a common thread among all Experian surveys of this type, where the research has shown a persistent positive margin with Hispanics of about five index points over the rest of the survey sample.

That level of optimism is refreshing to see!

What to Make of all the Interest in Pinterest …

I love PinterestUntil now, I’ve hesitated to blog about Pinterest, the digital bulletin board and newest “breakout network” in social media.  I wanted to see how it was evolving before jumping to conclusions about its importance and staying power.

Without a doubt, Pinterest is one of the biggest stories in the social sphere right now. It seems that something as simple as enabling users to post “boards” of their collections of photos has struck a nerve.

Pinterest is one of the most user-friendly social sites in cyberspace.  Pinterest participants use a “bookmarklet” button installed in their browser to affix photos or images to virtual bulletin boards set up on particular topics or themes such as interior decorating, food arts and fashion.  Each image has an accompanying clickthrough link to the web page where it was found.  Users can also “re-pin” images they find on other Pinterest boards.

Simple, easy … and popular.  In its most recent Digital Marketing Benchmark & Trend Report, Experian reports that Pinterest is now the third most popular U.S. social networking site. Only Facebook and Twitter rank higher.

Just how well is Pinterest doing? Consider that this invitation-only site has ~10 million users and receives nearly 25 million visits in a single week. That’s 30 times larger the volume of visits recorded on Pinterest just six months ago.

I’m still trying to determine how much staying power this latest social media phenom possesses. The rapid adoption rate tells us something right off the bat … and there are a few additional reasons why Pinterest may be here to stay in a big way:

  • Pinterest is a highly effective form of digital scrap-booking that seems to be extremely popular with its users.
  • Online audience measurement firm comScore reports that users spend an average of 1.5 hours per month on Pinterest, second only to Facebook.
  • Pinterest is easy and intuitive to use, making it popular with people who aren’t your typical “geeky” computer user. Pinterest users tend to skew older … more female (~80% actually) … and generally located more in “flyover country” than in coastal zones like New York and California.

Any time a social network can claim to have attracted the hearts and minds of the broader population, that’s noteworthy … and it leads me to believe that Pinterest isn’t merely a passing fad.

Indeed, we may have just scratched the surface of what Pinterest will be and what it will offer in the years ahead.

What are your thoughts about Pinterest?  Dynamic or dull?  Flash-in-the-pan or here to stay?  And how do you see it being used by marketers to promote their products and brands?

The Discover Card Discovers … Minnesota’s No Pushover

Discover cardAs someone who lived in the state of Minnesota for years, long ago I came to the understanding that many people there view themselves as the ethical if not intellectual “umbilical cord” for the nation.

And why not? Minnesota has long been the font of “good government” initiatives many other states have sought to emulate. It’s the state that routinely leads all others in voter turnout, not to mention being the springboard of reformist politicians such as Eugene McCarthy, Hubert Humphrey and Walter Mondale.

So I wasn’t surprised to read last week that Minnesota’s Attorney General Office has filed a lawsuit against the Discover card for “deceptive marketing” practices. Discover is accused of making “aggressive, misleading and deceptive” telemarketing contacts in an attempt to lure customers into signing up for additional services that they didn’t realize carried a charge.

According to the complaint, customers were ostensibly being informed of Discover’s well-known “cash-back rewards” program, but then were told of the fee-based services as if those were regular features of the card’s benefits.

“Discover’s telemarketers employ an array of deceptive tactics to elicit an affirmative response from the cardholder without the cardholder actually understanding that they are supposedly aggreeing to purchase an optional product for a monthly fee,” the lawsuit contends.

According to the suit, Discover allegedly enrolled “tens of thousands of Minnesotans and charged them millions of dollars for enrollment in the plans” which include a “payment protection plan” that allows unemployed or disabled customers to suspend making credit card payments without penalty, an identity theft protection plan that costs ~$13 per month, and a credit-score tracking service that bills at ~$8 per month.

I love the way Lori Swanson, Minnesota’s attorney general, put it. “People expect their credit card company to stop and prevent these fraudulent charges – not be the ones making them.”

Or course, it’s not surprising that credit card companies are attempting to sell customers on fee-based services; the lawsuit claims that Discover earned over $295 million on these optional products during 2009 alone.

But the fact is, consumers are paying for additional services they don’t really need, as much if not all of their risk exposure is covered by other laws on the books. Of course, Discover conveniently left out that bit of information in their sales pitch to consumers.

“The biggest credit card companies make huge amounts of money by getting their customers to sign up for add-ons that are useless,” says Edmund Mierzwinski, a consumer program director at the U.S. Public Interest Research Group.

The Minnesota lawsuit seeks to order Discover not only to cease its aggressive marketing of these services, but also to reimburse customers who signed up for services they no longer want.

Based on how earlier cases of a similar nature against Experian and Providian have turned out … my guess is that Minnesota is going to be successful.