Coupons, Response Rates and Customers

I am taking a class in multi-channel marketing at DePaul as part of my MBA requirements - which incidentally is the reason that I started this blog - but last night we had a speaker who presented the concept of database marketing. In his presentation he basically argued that the best predictor of future buying behavior was previous buying behavior. I can't argue with his logic - he makes perfect sense since neither demographics nor psychographics can truly predict buying behavior.

And according to today's Wall Street Journal - other marketers also agree with this logic. In "Personalized Store Ads Take Off" the writer argues that while smaller brands have used in store coupons presented to customers at the cash register for future purchases for several years, the large brands including Nestle, Coca-Cola and Kraft Foods are now starting to buy them in significant numbers. This practice encourages shoppers to try a brand that competes with one they just bought, or to try a new flavor of a product they currently have in their cart. The CPG industry seems to think it's a good way to reach consumers and they've found that their response rates are significantly higher using this method then FSI or other coupons.

Guess he was right....