Privacy is the "elephant in the room" of target marketing efforts.

The customer has been conditioned to think… How can you target an offer without my data? How is that data collected and used? Wait a second…How did you get that data? Who else has that data? 

No one likes to talk about Privacy too much. Most Marketers perceive it as a negative in customer’s minds; even the root cause of failing loyalty programs.

There are different ways of dealing with  the privacy issue.

1. You can ignore the issue
2. You can  decide that it isn’t worth the hassle and give everyone the same offer
3. You can point to a privacy policy and convince yourself that boilerplate from a lawyer will make a customer content vs. what it is really designed to do… cut back litigation
4. You can take the high road. 

The high road is to develop target marketing programs that openly target your customers for their propensity to do something, fully transparent and without apology. Remember, in most cases business rules and algorithms cannot handle fully targeted 1:1 offers, so why pretend that the offers are 1:1 Let the customer know that these are offers for "customers like them" – because thats what they are!

What about their data? You get rid of it. That’s right… you build a unique campaign database that strips out all the identifiable data that is not needed. and you tell the customer right on the offer "THIS OFFER WAS CREATED FOR CUSTOMERS LIKE YOU, FROM A SECURE DATABASE   WITHOUT ANY OF YOUR PERSONAL OR IDENTIFIABLE DATA"  You use a unique customer campaign number derived from, or referenced to, the customer’s data that is held in a database elsewhere.  For the campaign, the unique number used is in a group for offer purposes. Essentially, the offers are not personalized down to the customer level. They are not company:1  but company:segment .

More on the "high road" If you need an email address or a name and street address to deliver the offer, you add that to the note to the customer… "THIS OFFER WAS CREATED FOR CUSTOMERS LIKE YOU, FROM A SECURE DATABASE   WITHOUT ANY OF YOUR PERSONAL OR IDENTIFIABLE DATA – YOUR (EMAIL) ADDRESS HAS BEEN APPENDED TO THE OFFER FOR DELIVERY PURPOSES ONLY"   

When the campaign is over,  you preserve the high road policy, by using the intelligence from  the campaign selectively to analyze and optimize. The next campaign uses unique campaign ID numbers again.

There is enough opportunity for dynamic offer optimization to challenge the savviest marketers with the biggest technology resources, while staying on the high road.

Now the Customer is being conditioned differently.

How can you target an
offer without my data?
- I’m part of a group getting the offer

How is that data collected and used?
- My personal and identifiable data isn’t being used

Wait a
second…How did you get that data? Who else has that data?
- I trust the company judging by the effort they have made in communicating how they use my information

Next time I’ll share my thoughts on… delivery offers.

Overall
coupon redemption rates are in decline in the United States and Canada.
As North American marketers search for answers to help them cut through
the clutter arising from a proliferation of offers, the time has come
to re-examine some of the conventional wisdom on couponing.

Much of that conventional wisdom is wrong, say ICOM Information & Communications
marketing and consumer insight experts Peter Meyers and Steve Litt.
Their assertion is based on redemption trends derived from a 20-year
database ICOM built in the course of designing 6,300 targeted
direct-mail programs and issuing 425 million coupons to 28 million U.S.
and Canadian households that voluntarily provide information about
their purchasing preferences. ICOM’s database uniquely differentiates
redemption behavior between current, competitive and new users of
products.

According to Meyers and Litt, these are the top ten myths about coupon redemption:

Myth #1: Short-term expirations drive immediate sales.
Fact: Consumers need more time. A short expiry often cuts redemption far more than any increase in value can make up.

Myth #2: Higher value always equals higher redemption.
Fact: Value alone isn’t enough. Maximum redemption comes from an optimal value-expiration sweet spot.

Myth #3: Store brand users aren’t worth pursuing with target coupon offers.
Fact: As
store brands upgrade their quality, fewer store brand consumers will be
price-centric and more will be quality and feature conscious. They’ll
often redeem targeted offers at rates as high as other competitive
users.

Myth #4: Targeting the most loyal users of a competitor’s product yields the best return on a coupon program.
Fact: Light to moderately loyal competitive users are more likely to try a new
product and will do so on a lower-value coupon offer.

Myth #5: The presence of a sample is a requisite for driving high redemption rates.
Fact: There
are other factors much more likely to drive redemption rates. Some of
those include expiration, value, current vs. competitive user, and
frequent vs. infrequent coupon user.

Myth #6: The current users of a product don’t need long expirations to get them to redeem a coupon offer.
Fact:
Even for current users, to gain more than two-thirds of potential
redemptions, offers must be six months at minimum, and in the 10-12
month range for personal care categories like skin and beauty products.

Myth #7: Coupon clutter is pervasive in all delivery strategies.
Fact:
Escalated volume is not a factor in targeted coupons mailed directly to
homes. Notably, targeted promotion redemption rates are up in this
sector for household products and pet products.

Myth #8: Coupon offers on frequently purchased items are redeemed quickly, so an expiration of less than six months will do.
Fact: Targeted offers with expirations shorter than six months in general have only half as many redemptions as longer term offers.

Myth # 9: Current and competitive product users need the same coupon value to be motivated.
Fact: In
any product sector, current users typically require much less offer
value to drive them to purchase. Sectors vary, but it often takes 40
percent less value to move a current user than a competitive user.

Myth #10: Americans and Canadians share the same coupon redemption behavior.
Fact: There
are shared traits but the difference in absolute redemption rate is
substantial. Americans receive 10 times more mail than Canadians and
are less likely to respond to offers. Canadians favor contemplation
over quick action and require longer expiration terms. The net result:
the decline in overall coupon redemption rates is steeper in the United
States.

To build this list, I surveyed Scansave, LLC (the company I founded) and 4 other companies that specialize in delivering targeted offers in-store. I am very happy for my own selfish reasons to see validation for these new business methods. The over-arching framework for in-store target marketing has to be the interface to the shopper/customer; where and how do you make contact, and what do you give as a value exchange? 

So here is my list of benefits for those considering target marketing in-store, which in my mind only qualifies if your efforts are measurable, targeted, and can be optimized.

1. offers are relevant and personalized – it demonstrates you know your customer
2. delivered at the best place; the point of decision
3. flexibility; electronic or paper with multi-channel integration opportunities
4. increased frequency; not the program but the result of frequency offers
5. increased basket size without diluting profit margins; cross-sells and no pantry filling
6. product trial; see it, touch it and an instant incentive to try it
7. level playing field for store brands; its your store… promote your private brands efficiently
8. data-rich; if the offers are targeted, the data  collected is valuable and powerful
9. less waste; more efficient than broad-based direct marketing via mail
10. $; increased spend, increased revenues and increased profit margins