The Warc Blog

The Warc Blog

Engagement is never on clearance
Robert Passikoff, President, Brand Keys, Inc
Robert Passikoff

It's claimed that the very first coupon appeared in 1887 – for a free glass of Coca-Cola. It's all gone downhill from there - or uphill, depending on whether you're a retailer or a consumer. Think S&H Green Stamps, airline miles, credit card points, newspaper free-standing-inserts, and buy-10-get-one-free punch cards. And now online coupons and deals abound.

Groupon is the current leader in the group-buying coupon scheme: team up with merchants, send out email blasts that pitch a discount coupon for a product or a service and keep 50% of the revenue. It's a money-maker, which is why Groupon has a billion dollars in venture capital and $760 million in annual revenue. Oh, and a lot of competitors.

Currently, Groupon's closest rival is LivingSocial. But others – in other forms – are coming on strong. Firefly Rewards takes the traditional punch card format digital; Yowza! offers coupons via mobile phones; Blinkness partners with newspapers' local coupon offers, and digitizes them. And don't forget the other web heavyweights that also offer access to coupons and deals: Facebook, Yelp, OpenTable, and most recently Expedia.

It's all getting a little out of hand.

But don't get us wrong. Coupons, price reductions and such can be very useful, especially when marketers are looking to produce maximum short term volume, or gain first-time trial. But when these offers become a constant substitute for brand value, retailers are looking at a very slippery slope, where consumers quickly file the brand under "commodity" - one that can be easily replaced.

Yes, everybody is delighted with a deal—or they were. But given the current state of consumer knowledge of the marketplace and access to information not controlled by the brand, what used to be "delight" has turned to "expectation". And the constant couponing, sales, and deals have dramatically changed the traditional price-value equation into a consumer-driven value-for-dollar credo, which comes with good news-bad news.

The bad news is that consumers still want a deal. The good news is that the brand can serve as a surrogate for the added-value consumers are looking for, and become a driving factor in the value equation. Brands that stand for something find themselves less in need of creating value through price reduction. They create value through what they have to offer, often emotionally.

Tiffany's little blue box has made many a woman's heart skip a beat, all while never being marked with a red clearance tag. Diamonds may be cheaper down the street, but engagement – brand engagement, that is – is the word every brand wants whispered in its ear.

Subjects: Brands, Digital

05 April 2011 10:47

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