Street marketing: how proximity and context drive coupon redemption

Abstract

PurposeIn 2009, US coupons set a new record of 367 billion coupons distributed. Yet, while coupon distribution is on the rise, redemption rates remain below 1 percent. This paper aims to show how recognizing context variables, such as proximity, weather, part of town and financial incentives interplay to determine a coupon campaign's success.Design/methodology/approachThe paper reports an empirical study conducted in co‐operation with a restaurant chain: 9.880 Subway coupons were distributed under different experimental context conditions. Redemption behavior was analyzed with the help of logistic regressions.FindingsIt was found that even though proximity drives coupon redemption, city center campaigns seem to be much more sensitive to distance than suburban areas. The further away the distribution place from the restaurant, the less does the amount of monetary incentive determine the motivation to redeem.Practical implicationsWhen designing a coupon campaign for a company, coupon distribution should not follow a “one‐is‐good‐for‐all‐strategy” even for one marketer within one product category. Instead each coupon strategy should carefully consider contextual influence.Originality/valueThis paper is the first to the authors' knowledge that systematically investigates the impact of context variables on coupon redemption. It focuses on context variables that electronic marketing channels will be able to easily incorporate into personalized mobile marketing campaigns.

Mobile Targeting

“…As shown in Figure 2, the estimated marginal mean effects results visually support that near-distance mobile promotions result in a higher likelihood of consumer purchases than far-distance mobile promotions. These findings largely support the notion that location-based mobile technologies also matter in generating consumer purchases (Ghose et al 2013, Spiekermann et al 2011.…”

“…Specifically, consumers were more likely to respond to a mobile promotion when they were close to the promoting store than when they were at home (Banerjee and Dholakia 2008). In a field experiment, Spiekermann et al (2011) found that consumers were less likely to redeem restaurant coupons when they received them at farther locations from the restaurant. Similarly, Ghose et al (2013) support consumers' preferences for locations that are close to them at the time they conduct their mobile-based Internet searches.…”

“…This definition of location from the promoted event is in line with the Spiekermann et al (2011) use of distance from a restaurant and the Ghose et al (2013) use of distance from retailers in mobile-based Internet searches. Drawing a circle with the movie theater located at the circle's center suggests that, at a larger radius (a farther distance from the movie theater), there would be more mobile users located within this band.…”

“…Banerjee and Dholakia (2008) 351 Consumers are more willing to respond to a proximally located promotional offer. Spiekermann et al (2011) 171 The proximity of a promoted restaurant increases consumers' coupon redemption likelihood. Ghose et al (2013) 260 Proximally located stores are more likely to garner clicks in mobile-based Internet searches.…”

Increasing recommendation accuracy and diversity via social networks hyperbolic embedding

“…On the other hand, flooding a message concering a product or service to social connections of a user, including those that live far away from Washington DC or have not expressed any interest for food coupons, would probably be considered as spam. The dependence of relevance to the message context [18] calls upon developing a dynamic routing approach.…”