Coupon Clearing Bureau (Pty) Ltd

*Research has shown that: 52% of coupons redeemed motivated

BRAND SWITCHING.

It is important to note that a coupon will not just be responsible for moving one unit of your product but multiple. Most shoppers who switched brands continued to purchase the brands that they switched to after the first purchase.
Coupons also do well in defending your brand against Brand Switching.

65% of coupons redeemed motivated –

• NEW BUSINESS (“I was never going to buy the product but the coupon persuaded me to”).
• PANTRY LOADING (“I decided to stock up”).

Research has shown that an important portion of all
Main Shoppers always use coupons.(2004-5 large national survey)
Coupons beat Trade Promotions (in all forms) when it comes to Return on Investment!(FSI Council of North America).

Coupons work best in tough times, just like what all shoppers are facing right now. (See Sunday Times July 3 2016, page 6 | news)

For more information on all aspects of coupons, phone Melissa or Mike at (011) 403 0688 or e-mail melissa@ccbsa.co.za or mike.aitken@ccbsa.co.za .

*Cart-Ad Instore Media’s research.

Successful coupon based campaigns have a number of factors in common. The most important ones are as follows:

1. The face value of the coupon must give the shopper an attractive discount. The higher the discount, the better the response. Most successful promotional coupons have a face value of between 14% and 20% of the price of the product.
2. Coupons must be targeted correctly. It is pointless distributing coupons to a target market that will never use or never could afford the product.
3. The coupons should clearly show the product and the discount offered.

Certain products coupon better than others and certain methods of coupon distribution are more effective than others. When contemplating the use of coupons to promote a product, it is well worthwhile consulting Leni van Hattum at 011 403 0688 or leni@ccbsa.co.za to obtain an opinion on the campaign prior to its launch.

Methods of Distribution and Coupon Redemption

Coupon redemption varies depending on the method of distribution and the utility value of the product. The most effective coupon campaigns are those done at point of purchase. That is, where the shopper lifts the product off the supermarket shelf.
Point of purchase coupons are On Pack coupons, Neck Tag coupons, coupons distributed by in-store demonstrators and coupons dispensed from a coupon holder. Of these, On Pack coupons are the most effective. Their average redemption is 20% but the products like soap and aerosols show coupon redemptions even higher, from 30% to 40%. These percentages show how successful these types of coupons are as compared to couponing in the USA where the vast majority of redemptions are in the single digit figures.
Other methods of coupon distribution include booklets of coupons, knock-and-drop coupons, mailed coupons, coupons printed from the internet or emails, store printed coupons and coupons in magazines and newspapers. They are all successful in their own way.

Advertising Spin-Off

The success of a coupon-based campaign cannot only be judged by the percentage redemption. Many coupons pass through the hands of potential purchasers without being used. Each coupon is seen as an advertising impact, which is most valuable if the campaign is correctly targeted.

Coupon Clearing Bureau

Coupon Clearing Bureau, also know as CCB, is the clearing house for all consumer coupons redeemed in South Africa. The company was created in 1978 by both suppliers and retailers to perform all administration required and handle all transactions involved in the clearing house function.
The clearing house operation is audited by Stein Baltsoucos Inc. Quarterly internal audits are carried out to verify that the standards laid down are adhered to.
Coupon Clearing Bureau also provides a wide range of statistics on coupon redemption, tailor-made for both current and prospective clients.

Costs

Apart from the coupon design and printing costs, there are three costs involved in couponing:

1. Coupon face value - this is the discount given on the product being promoted.
2. Retailer handling fee - this is the amount charged by the retailer/wholesaler for redeeming the coupon. It covers administration costs and loss of interest on the money used to fund the promotion. A schedule of retailer handling fees is available.
3. CCB processing fee - this is the amount charged by Coupon Clearing Bureau to cover the costs of administering the clearing house operation. The processing fee varies from retailer to retailer depending on the volumes of coupons received, the larger the claim, the lower the charge.

Accounting Modes of Operation

All suppliers receive their invoices, statements and supporting documentation by email on the 25th of each month. The suppliers pay over the retailer refunds plus retailer handling fees and CCB clearing house charges to CCB by EFT. The amounts owed to the claiming chain stores, other retailers, cash-and-carriers and wholesalers are then consolidated by claimant and then paid over to them by EFT. The claimants also receive all supporting documentation and reconciliations by email.

Terms of Business

Coupon Clearing Bureau invoices all suppliers by the 25th of each month. Payment is due on presentation, preferably through bank transfer.
It is most important for suppliers to understand that delaying payments causes negative sentiment amongst retailers which is transferred to shoppers, due to the shopkeeper’s reluctance to accept coupons. The harm done to couponing by delaying payments is far greater than the benefits of a marginally better cash-flow.
It is interesting to note that the U K clearing house requires all suppliers to deposit a float with them from which refunds are disbursed, prior to the inception of a promotion.

Coupon Destruction

Coupons are kept by Coupon Clearing Bureau for three months so that any queries can be investigated. Thereafter, they are destroyed in a secure environment.

For more information, please contact
Melissa at melissa@ccbsa.co.za
Leni at leni@ccbsa.co.za
Mike at mike.aitken@ccbsa.co.za
Tel. 011 403 0688

Coupon promotions are a relatively inexpensive means of promoting durable and non-durable consumer products. The results of campaigns are measurable and it is possible to carry out specific targeting of promotional activity using coupons.
Coupons are used to:

1. Enhance sales.
2. Build brand equity.
3. Maintain market share by rewarding loyal customers.
4. Increase repeat purchase and purchase frequency.
5. Encourage multiple purchase (2 for 1 offers).
6. Attract new users or brand switchers from competing products.
7. Launch new products.
8. Offset price increases.

(With acknowledgment to N C H Promotional Services in the U K)

(Paper coupons and laminated paper coupons)
Why you should increase the number of physical coupons that you distribute when running a coupon campaign.

The following graph shows the number of coupons distributed in a particular product category’s coupon campaign and the resultant percentage of those coupons redeemed by shoppers (These are actual figures from our historical database).

You can see that if you only distribute a comparatively small number of coupons, like 15 360 in the graph, you will achieve quite a low redemption, like 2.18%.

However, if you distribute 50 000 coupons, you achieve 20.30% in this example and just under 50% redemption if you distribute 220 000 coupons.

A coupon also acts as an advertisement for your product. The mere act of a shopper seeing a coupon with your product on it creates an “advertising impact”. The more times a shopper sees an image of your product, the more familiar your brand will be to her/him.

Conclusion: Your coupon campaign will be more successful if you increase the number of coupons that you distribute.

Looking at the cost of mounting a coupon campaign, increasing the size of your print run adds a very small cost to the total project cost because of the economies of scale of larger print runs. Of course, the redemption costs will increase but the increase in the number of coupons distributed will result in measurably more of your products being sold and an increase in your revenue. Also your campaign will be much more successful with more of your products being sold. Finally, do not ever forget the increase in repeat purchases of your product that will take place as well.

Would a 100% redemption ever be achieved? Answer: Never! To illustrate this, the following is a selection of average redemption percentages for coupons for very popular brands from our historical database (the volumes of coupon distribution were substantial):

As the number of coupons distributed increases, the number of potential shoppers who would buy your product increases as well and the cost of reaching each one falls.

The final bonus is, that as the number of coupons redeemed in the industry increases, the unit processing charge as billed by CCB falls because of the economies of scale of processing large volumes of coupons.

For more information, please do not hesitate to contact Melissa at melissa@ccbsa.co.za or Mike at mike.aitken@ccbsa.co.za .

Physical Coupons Work!