Wall Street Journal/Smart Money Monday, May 9, 2011
By Kelli B. Grant
Sharing has its benefits: helping others, fostering cooperation and conserving resources. But it can also cut your bill at checkout, as manufacturers and retailers start issuing new coupons that increase in value when you pass them along to other people.
iStockphotoFor example, a $1.50 Huggies coupon suddenly becomes a $3 one when you agree to email or instant-message it to three people, or post the link to Facebook, Twitter or MySpace. On deal site PeopleDeals, currently in beta, New Yorkers can grab a $1 coupon toward lunch at local restaurant L’asso, which mushrooms to $2, $3 or $4 when you post a link on Facebook and other friends nearby use the link to get their own copy.
The idea is a riff on what daily-deal sites like Groupon promise: get enough people interested in an offer, and you’ll secure a better price. While these social coupons haven’t yet taken off like daily-deal sites – coupon management firm Inmar, which tracks the industry, says it is aware of a handful, but the trend wasn’t significant enough last year to track amid the 3.3 billion offers consumers redeemed – experts are expecting them to gain popularity.
Indeed, consumers on Facebook and Twitter are likely to see more of these offers as brands strive to engage with their customers on social networks, says Lynn Mettler, the founder of Step Ahead, a marketing firm in Mount Pleasant, S.C. “The couponing crowd is very active on social media,” she says. “People are happy to spread the word to get the coupon value up.”
It’s a win for coupon-clippers, but also for the companies hoping to increase sales. A 2010 iModerate study found that 67% of Twitter users and 50% of Facebook users said they were more likely to make a purchase from the brands they follow. Sharable coupons reinforces that, because you’re likely to forward the deal to friends who you think would find it useful, and more likely to use that higher value coupon, says Vijay Pullur, the chief executive of SocialTwist, the social media marketing firm behind several of the promotions. While a typical manufacturer’s coupon has a redemption rate of just 10% to 20%, a current promotion for $0.75 off Jimmy D’s – $1.50 when you email it to three friends or post it on either Facebook or Twitter – has a redemption rate of 81%.
Would you bombard your social network with coupon offers to save more at checkout?