What you can learn from the world’s most successful coupon campaign

 

 

 

 

 

 

 

 

 

Back in 2004, Wednesday was the least popular day to go to the cinema in the UK. A single campaign has transformed Wednesdays into the most popular weekday to visit the cinema.

What caused this change and what can your business learn from it?

Orange Wednesdays

Orange is one of the major mobile phone operators in the UK. In 2004 they launched a new mobile coupon campaign called ‘Orange Wednesdays’, the campaign is still running today.

The promotion means that their customers can text the word FILM to the number 241 and they receive a message back that entitles them to two tickets for the price of one at their nearest cinema.

The promotion has become so popular that it now issues over 300,000 coupons each week, that’s about 15 million each year!

Coupons allow price differentiation

Coupons have been around for many years in paper form and now mobile coupons are becoming more popular. What is important about them is they allow companies to charge different amounts to different customers depending on how price sensitive they are.

When a company sets a price for its products it normally has one price which is set to maximise profits. But some of its customers would have been prepared to pay more. The problem is that the company can’t charge different people different prices – unless they use a coupon.

Coupons mean that customers who aren’t worried about the price will not bother with the hassle of finding a coupon and will just pay the full price. Those customers that are more price sensitive will seek out a coupon which will give them the lower price that they seek. This gives the company more sales than they would have achieved with a single price point.

The mistake you should avoid

Coupons are sometimes used as a short term tactic to attract new customers. The problem with this is that you will just attract price sensitive customers who will move on to your competitors once you stop running the coupon. The important thing to learn from the Orange promotion is that the point of a coupon is to allow you to charge different prices to different customers, it is not to bring in price sensitive customers and then expect them to start paying more when the promotion stops.

Coupons are a long-term strategy not a short-term tactic.

 

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