Justin McMahon is Head of Operations at Mandlik & Rhodes Information Systems, Inc. and has been helping manufacturers navigate the coupon process for over 10 years. Mandlik & Rhodes is a proud sponsor of Startup CPG.

Look around your local grocery store and you will find that the Coupon is a ubiquitous part of the shopping experience. There are coupons hanging on shelf, handed out in store, spun out from machines, stuck to products, printed out at the register. The Coupon is not just limited to the grocery aisle either. If the grocery store has their own shopping app, open it up and you can clip coupons right to your store ID; coupons are mailed to customers, sent to their email inbox, handed out at events and trade shows, and printed in newspapers. You can’t avoid them! There is a reason why every major CPG in the country has a coupon program; one of the easiest and most cost-effective ways for a CPG to promote their products in the US. is a manufacturer’s coupon.

If your brand doesn’t have a coupon ready and available for your products, you’re missing out.

I work with 100’s of new couponers a year and there is often a lot of ambiguity around how the coupon works. It is my job to help “demystify” the coupon process.

Here are some answering common questions we hear every day:

• How do I get the stores to accept my coupon?
• Can I afford a coupon and what costs are involved?
• What are some basic coupon strategies?
• How do you measure Coupon performance?
• How do you start a coupon program?

This article is going to answer these questions, highlight some of the benefits of couponing, and hopefully convince you to go ahead and take the plunge to get that first coupon program going; it’s easier than you think!

Getting Stores to Accept Your coupon:

Hands down, the biggest advantage of the coupon is its universal acceptance. The main feature of the coupon is that you can give the customer a voucher for a discount off your products and that customer can then take it to just about any store that carries your products to get the discount in exchange for your voucher. This is a tremendous value. You don’t need to go store to store registering or notifying your retailer partners about you new foray into the coupon world. Just code the barcode to spec and you’re good to go!

Typical Coupon Costs:

The Coupon is a simple, low cost, and effective way to promote your product both inside and outside of the grocery store. Costs can be very budget friendly, especially compared to other marketing costs. Costs involve:

• Clearing house fees
• Retailer handling fees
• Distribution and or printing fees

Print, processing, and handling are usually less than a dollar per coupon. Distribution costs can vary depending on your media type and partner, but still much less than advertising and sponsorship.

Basic coupon strategies:

The coupon is a little reminder of your brand; it has your logo, maybe a picture of your product. It’s like a business card, but it has a value and is usually kept around a little longer.

The next time you are at an event, look around at everyone’s tables; almost all of them are handing out or displaying coupons at their booths. The coupon is a great conversation starter, and an easy way to help your team boost engagement with your brand. Additionally, having just a few coupons handy at the office for a quick “thank you” or “sorry” when responding to customer experience will help make those interactions more impactful.

The great thing about the coupon is, the customer must go to the store and buy your product to use it! Instead of just giving out free product you are driving a sale at the retail location.
There are many coupon strategies. Here are a few more:

• Coupons help acquire more customers. Even if you end up giving a little money away with each deal, coupons are excellent for increasing the number of people who make both current and future purchases from your company.
• Coupons increase loyalty among existing customers. coupons are excellent for making customers feel rewarded for shopping with you. They help to promote first time purchases and keep customers coming back.
• Coupons help clear merchandise. When it’s time to get summer items off the shelf and fall items stocked, coupons are an excellent vehicle for getting this done effectively without losing your profit on unsold items.
• Coupons promote new products. There’s nothing quite as good at getting customers excited about a new product or service than a coupon, discount, or giveaway.

Coupon performance:

A coupon program is quantifiable. When you spend your time, money, and effort on a program you’re probably going to want to know how well you benefitted from it. Was it worth the effort or not? A coupon redemption is moving at least one unit of sale. Determining ROI on a coupon is much more straight forward than other forms of advertisement.

When a customer redeems a coupon, the retailer will need to submit that coupon in as a claim. This means your team will know which coupons are being redeemed at what stores; and you can use this data to show your retail customers how effectively you are promoting your product in their stores. Starting to see the value now?

Alright, you’re convinced. How do you start a coupon program?

Typically, a CPG will use a clearing agent to simplify and streamline the process. There are a few nuances about the coupon that are not covered in this article, such as validation, retailer expectations and payment terms, best practices for coupon design, family codes, coupon deductions…but you don’t need to be an expert to start a coupon program. A clearing agent will get you set up with a barcode, ensure you coupon design is conforming to industry best practices, and most importantly handle the coupon claims process on your behalf.

Getting a coupon set up and working is a simple process, and you may even be able to handle this yourself; however, if you are expecting any more than 100 coupon redemption you should probably consider hiring a clearing agent to handle the processing. Mandlik & Rhodes specializes in working with smaller volume and new couponers. I consult with many new couponer CPGs a year. If you are interested in learning more about coupons, how they work, and if you need an agent (or just want to learn more about coupons) consider requesting a meeting through our website, or simply email info@mandlik-rhodes.com to request more information.