Coupon misprints – What rejecting a customer’s coupon really costs your business

Do you give out coupons for your customers to use?

Great Harvest Bread

Sample of Great Harvest Bread coupon

I recently read in the NW Observer, a newsprint, that offers a weekly ‘Grins & Gripes’ column a Gripe regarding a coupon misprint.  It seems another area newspaper ran a Great Harvest Bread ad with a buy one get one free offer that ran one week too long.  Unbeknownst to this consumer, she tried to use the coupon in their store.  According to the Gripe, they rejected the coupon because “it was not valid due to the newspaper’s mistake in rerunning the ad.”

Actually that coupon was valid and should have been elegible for redemption unless there was a disclaimer.  And even if there was a disclaimer you might be better off to allow the customer to redeem the coupon and keep the customer happy.  What kind of damage did this employee cause Great Harvest Bread company for rejecting the coupon?

Before deciding whether or not to redeem an out of date coupon you should consider a few things:

What is the cost of the loss in revenue and profit?  In this case maybe $8 for a second loaf of bread in revenue and $2 in profit?

What is your cost value per customer?  You need to take into account what kind of service or product you offer, the shelf life of your product and the average sale per customer.  For a bakery like Great Harvest I am guessing $268 per customer.

Then, ask what damage and economically negative impact this action of not making the customer happy could potentially have on the business.  With the advent of social media platforms, your customer’s “Gripe” could have a tremendous impact on your bottom line.  This customer went to the NW Observer paper with a 26,000 readership.

Let’s do the math on this customer loss to the bottom line:

Counting the $2 of lost profit, $268 of missed future opportunity sales and cost of negative publicity of an estimated 10 people who read the Gripe and decided to go somewhere else, the potential loss is $2950.

Don’t be too quick to judge this estimate as exaggerated either.  As U-Haul has painfully discovered, the Internet, Facebook and other social platforms are unforgiving places and store all negative customer feedback.  Google UHaul and see what comes up under mistakes as far back as 2006!

The next time you have the choice between rejecting that coupon and just accepting it, think about how much it is really costing you.

Princeton Marketing been providing marketing consulting and strategic marketing business planning, media buying and marketing communication since 1998.  ‘Managed Marketing with Measurable Results’ is our specialty.

 

About Laurie Panas-Brackett

V.P. & Marketing Strategist Princeton Marketing Group Co-owner and founder
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