Lower Customer Acquisition Costs

In every industry, it is expensive to acquire new customers. Of course the same is true for the grocery industry. And like other industries, companies are looking to lower that cost. We think we found an answer.

First let's look at the cost of acquiring that new customer. Coupons are a great way to get the customer down the aisle and put your product in their basket. But how much is it really costing you? You need to consider total cost (design, distribution, redemption costs, etc) and divided by new customers – not by the amount redeemed. Typically 56-86% of the people using your coupon are those who would have purchased your product anyway – you're paying someone who would have purchased anyway. That means a 1% redemption rate is really only 0.4-0.14% of new customers.

The nature of the beast? It doesn't have to be.

Grocer Green lowers customer acquisition costs in two ways: targeting and location.

Targeting

Blasting out coupons in mass mail, the newspaper, and on web sites has its advantages, but most people don't see your coupon and of the ones that do are often existing customers. In fact I love web sites where I can find brands I intend to buy (sorry).

Grocer Green is using customer purchase data to identify who buys your product, who doesn't, who should and when they are likely to purchase. This allows us to target coupons for customer acquisition are specifically to those that should be buying your product, when they are likely to buy your product.

Only targeting potential customers when they are ready to buy

For example, if they have just purchased a competitor product, we will wait until they are ready to buy again and then provide your coupon to maximize the chance they will use it.

Another example are customers who are purchasing elsewhere. Let's use your coupon to get them to buy your product today.

Location, Location, Location, Touch

In real estate and marketing, location is important. Coupons are the same way – it's all in the touch point.

Most coupons get to the customer when they are at home or headed home. You can call that the planning and not-interested stages. It requires the customer to make an effort to find your coupon, decide if they want to try out your product, add it to their shopping list (if they keep one), and then remember when they actually go shopping. OK, that's not really a lot of work or rocket science, but it's enough to keep the redemption rate down around 1% - and who wants that?

Alternatively coupons within the last three feet catch the consumer's eye when they do get close but most are being used by customers that were reaching for your product anyway. Which drives up the cost of customer acquisition – and who wants that?

The right touch at the right time

Our new touch point uses smartphones to deliver personalized coupons to consumers as they enter the store. They don't have to plan, search, clip, save, remember, etc. Just click and use the coupon. So simple. Making it so simple and as they are ready to purchase will drive up redemption.

Personalization means only potential customers are getting your offer. That means you're not paying customers who were going to buy anyway and driving up your customer acquisition costs.

 

Now be ninja fast. Ninja smart. Ninja effective.