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Personalized Offers Can Pay Big Dividends for Retailers

Dan Slavin
Dan Slavin

Learn how personalizing offers can bring more traffic and sales to your retail store.

  • Applying the principle of personalization – where you feel like you're receiving special treatment – can also apply to personalized coupons and offers.
  • You can personalize offers based on a variety of factors such as past purchasing behavior, recency of purchase, dollar value, time of year (seasonal) and location.
  • Consumers say that they will make a first-time purchase from a retailer when that retailer offers a high-discount coupon or promotional offer in return.
  • Consumers overwhelmingly prefer higher-value coupons that they can use only once, versus a lower-value coupon that they can use more than once.
  • True offer personalization requires strong distribution and redemption security to ensure that a coupon is redeemed only once and to ensure that the coupon does not go viral.

Retailers operate in a competitive environment and competition doesn't just come from around the corner but literally from around the world. Today's retailers are engaged in an ongoing battle to not only capture new customers but to continually engage the ones they already have.

One time-tested method for doing that has involved special events, couponing or special offers – special because, when offered exclusively to some pre-determined group of customers – they can be a powerful way to boost engagement and sales.

Unfortunately, special offers aren't often developed strategically. Fortunately, today's technology can be a big aid here if used right.

The recent Coupon and Offer Personalization report polled 1,152 U.S. consumers and shares insights into how today's consumers respond to special and personalized offers, offering cues to help retailers formulate and deploy offers.

Researchers found that personalization is more important than ever before. Consumers don't want to feel that they're just "one of the masses" – they want to feel special and they want offers that feel relevant to them personally.

Today's savvy consumers don't want to receive offers for products or services they have no interest in. But, if we can personalize those offers based on past interactions, we can be highly successful.

Consider this: 99% of survey respondents said that they would be "likely or highly likely" to use a high-discount coupon from a retailer that they shop with regularly. Let that number sink in: 99%!

In fact, even if they had not shopped with a retailer for a long time, 97% said that they would be "likely or highly likely" to come back to the store after receiving a high-discount coupon.

Here's another important takeaway that may be especially pertinent to those retailers who tend to rely on lower value promotional offers: consumers overwhelmingly prefer higher-value coupons that they can use only once over a lower-value coupon that they can use time and again.

Personalizing offers is a must in today's digital world

The term "mass personalization" may seem like an oxymoron – how could something targeted to a mass audience be personalized? Well, today's technology makes the concept very possible and highly desired.

In a report from Deloitte about mass personalization, the consulting firm looked at how businesses are changing their processes to offer cost-efficient personalization at scale. Their findings suggest that personalization may improve consumer traffic, increase conversions and allow businesses to charge more for their products. All of that, simply by making an effort to provide a personalized experience for customers and consumers. There's more good news. Deloitte's research reveals:

  • One in five consumers are willing to pay a 20% premium for personalized products or services;
  • Personalization also prompts information sharing: 22% said they would be happy to share some data in return for a more personalized service or product.

Personalization is in the mind of the consumer, of course, and today's consumers won't be fooled. That's why it's so important to ensure that the technology tools you're using to provide a personalized experience hit the mark in terms of truly understanding customers and their past purchasing behaviors.

 Offers can be personalized in a variety of ways, such as the following:

  • Based on past purchases. Amazon brought this type of personalization to the forefront by recommending books to Amazon readers based on the books they had purchased in the past. Today's retailers can capitalize on the ability to tie past purchases to potential future purchases – and leverage couponing and special offers to drive action.
  • Based on recency of purchase. Data related to recency of purchase can be considered a few different ways. First, research shows that customers can be frustrated when receiving a special offer for a product or service they recently purchased. On the flip side, sending promotions based on lags in purchases can help prompt consumers to take action to reorder or return to your store.
  • Based on dollar value of purchase. People who spend more, spend more. Simple concept but highly important. A customer who has made a $500 purchase in the past is likely to make a $500 purchase in the future – especially if incentivized through a high-value coupon.
  • Based on where the customer lives and what's happening at the time of year. Customers sweltering in hot summer weather are more likely to purchase things like ice cream, warm-weather clothing, air conditioners, etc. Customers with kids going back to school are more likely to buy new clothes and school supplies. Holidays, too, have always been a big retail factor.

Managing the use of personalized offers

While special offers and couponing certainly offer value for retailers and others hoping to continually engage existing customers and attract new ones, inefficient or ineffective use or special offers can result in negative impacts on the bottom line. For instance:

  • If personalization misses the mark, customers may be more peeved than pleased, resulting in negative impacts on sales, if sales even occur. Marketers need to ensure they are addressing what consumers value and dismiss when it comes to personalization.
  • If coupons aren't secured, they may be used multiple times or shared among consumers, extending the reach of the specific offer far beyond what was originally intended. Avoiding reuse and pass along should be a key component of your digital couponing efforts.
  • If coupons are offered to consumers who would have made a purchase without a coupon, marketers are leaving money on the table. On the flip side, of course, if coupons aren't offered to customers who value them, the same can occur. J.C. Penney, under then-CEO Ron Johnson, learned this the hard way when he ended reliance on coupons and stopped the previously storewide use of discounts the chain store was known for. As a result, his time with the retailer is considered the most destructive reign by any CEO at any company in history.

The strategic and effective use of your customer data can help you appropriately personalize offers to get the most bang for your buck. Crafting offers based on what customers value and avoiding overuse by instituting controls to prevent reuse and pass along, are both important must do's for marketers of any stripe.

By adding a security component to coupon distribution and redemption, marketers can drive single-use redemptions for coupons while continuing to delight and engage customers.


Technology can be a powerful aid in helping retailers to effectively – and strategically – manage the special offers they make to various groups of customers or potential customers. Single-use coupons that expire upon redemption across all mobile channels can be a great way to maximize revenue while also identifying and targeting those most likely to buy.

Image Credit: rez-art/Getty Images
Dan Slavin
Dan Slavin Member
Dan Slavin is CEO and co-founder of CodeBroker, a provider of mobile marketing solutions. He was CEO of Framework Technologies, VP of Open Market, and CEO of International Testing Services. He earned a BS in Electrical Engineering from Yale and an MBA from Harvard.