how digital couponing can work for you.

Outline

• Introduction

• Industry Analysis

• Marketing Research Problem and Research Questions

• Hypotheses

• Research Methods

• Analysis

• Results

• Implications

FIVE reasons digital coupons matter right now!

Economic recession and slow recovery, means couponing is here to stay!

Saving is becoming an expected behavior among most Americans.

Newspaper readership is on the decline.

Smartphone penetration is increasing.

The internet has become a key part of our daily lives.

Saving $$$

Newspaper

An excellent shopping tool, providing heavily discounted deals

Motivating consumers to try NEW!product/service offerings

To interact, share ideas, and provide feedback

To show support for the company to others

For fun or entertainment

From a consumer perspective, social coupons are:

Industry Analysis

•US spending on deals will hit nearly $2 billion this year and will rise to $4.1 billion by 2015.

•74% of respondents claimed to search multiple coupon sites every week - Bing and Impulse Research

•Grouponwas the industry pioneer, however there is a long list of other deal services:

• Living Social

• Scoutmob

• Bloomspot

• Yelp, Facebook, Yahoo, Open Table, and Amazonlocal.

•Low Barriers to entry

•3 R’s: Retention, Redemption, Respond

•Yelp reviews that mention having used a coupon have a strikingly lower rating score than those that do not.

exploratory

Marketing Problem

To determine what drives digital coupon usage from a consumer perspective by examining:

• What contributes to consumers using deals?

• What contributes to their overall experience?

• Does brand loyalty has an effect on consumers’ digital site preference?

Research Questions

1. What drives consumers to use digital coupons?• Do social networks affect which digital coupon service customers use ?

• Does mobile redemption affect which digital coupon deal site consumers use?

• Do consumers preferences affect whether or not they use digital coupons?

• Do consumer preferences affect which digital coupon services a consumer uses?

2. What drives consumers to not use digital coupons?• Do demographics affect whether or not a consumer uses a digital coupon?

3. How does digital coupon usage affect a business?• Does using a digital coupon at a place that you’ve used before affect

consumers’ overall experience with digital coupons?

• Does consumer used which category of business before affect consumers’ overall experience with digital coupons?

• Do consumers view the business differently if they utilize social couponing?

The goal of this research is to answer the following questions:

Hypotheses

1-1 Do social networks affect which digital coupon service customers use ? Ho: usage of different types of social network sites has no effect on digital coupon deal sites

which consumer useHa: usage of different types of social network sites has effect on usage of digital coupon

deal sites which consumer use

1-2 Does mobile redemption affect which digital coupon deal site consumers use?Ho: usage of mobile redemption has no effect on digital coupon deal sites which consumer

useHa: usage of mobile redemption has effect on digital coupon deal sites which consumer use

1-3 Do consumers preferences affect whether or not they use digital coupons?Ho: consumers’ preference has no effect on usage of digital couponHa: consumers’ preference has effect on usage of digital coupon

1-4 Do consumer preferences affect which digital coupon services a consumer uses?Ho: consumers’ preference has no effect on digital coupon deal sites which consumer useHa: consumers’ preference has effect on digital coupon deal sites which consumer use

Hypotheses

2-1 Do demographics affect whether or not a consumer uses a digital coupon? Ho: demographics has no effect on usage of digital couponHa: demographics has effect on usage of digital coupon

3-1 Does using a digital coupon at a place that you’ve used before affect consumers’ overall experience with digital coupons?

Ho: prior to using the deal, consumers have purchased from business has no effect on consumers’ overall experience on using digital coupon

Ha: prior to using the deal, consumers have purchased from business has effect on consumers’ overall experience on using digital coupon

3-2 Does consumer used which category of business before affect consumers’ overall experience with digital coupons?Ho: consumers used which category of business before has no effect on consumers’ attitude toward the businessesHa: consumers used which category of business before has effect on consumers’ attitude toward the businesses

3-2 Do consumers view the business differently if they utilize social couponing? Ho: businesses utilizing digital coupon has no effect on consumers’ attitude toward the businessesHa: businesses utilizing digital coupon has effect on consumers’ attitude toward the businesses

Research Methods

Methods

Primary Data

Executive

Interview

Data Analysis

Secondary

Data

Academic Journals &

Survey Data

Analysis

• DV & IV Table

Analysis

• Types of analysis:• Frequency Distributions

• Comparison of Means

– T-test

–Chi-Square tests

• Comparison of Proportions

• Regression Analysis

RESULTS

Insights from ScoutmobMain Concepts from Interview with Liza Dunning

“Maintaining the trustworthiness of its brand is one of the company’s primary objectives”

Creative coupon design was part of a larger concept to have consumers use Scoutmob’s mobile app, products and editorial as a part of their lifestyle

Category preferences are not uniform: Restaurants are seen as the sustaining element for Scoutmob

A trend of retail successes within the app as well

“Improve the mobile app and the product as well as add excitement to the brand”

Future plans to reward loyalty

Secondary ResearchDaily Deals: Prediction, Social Diffusion, and Reputational

Ramifications

Do Facebooklikes correlate with the final deal size and whether the dataappears consistent with current models for the effects of social networks ofbuying decisions?

Must be careful not to conflate correlation and causation; it is not clear that likesinspire purchases, even if the number of likes and deal sizes are correlated.

Deals with approximately the same number of likes can vary significantly interms of final deal size

Secondary ResearchDaily Deals: Prediction, Social Diffusion, and Reputational

Ramifications

The average month over month growth in number of reviews for deals prior to Groupon offers is about 5% while the average percentage increase in reviews the month after the groupon is 84%.

During\After the Deal: On average, the number of user contributed reviews increases significantly and based on the proportion mentions, the group deal appears to be the proximate cause.

Yelp reviews mentioning either keyword (groupon or coupon) are associated with star ratings that are 10% lower on average than reviews that do not

1-1 Do social networks affect which digital coupon service customers use?

• Ho: usage of different types of social network sites has no effect on digital coupon deal sites which consumer use

• Ha: usage of different types of social network sites has effect on usage of digital coupon deal sites which consumer use

R2=0.1495% of confidence

1-1 Do social networks affect which digital coupon service customers use? (contd.)

0

10

20

30

40

50

60

70

80

90

88

43 39 37

8 5 3

39%

19%17% 17%

4% 2%1%

People Who Use Deals

% of Total Sites

# of Users

0

5

10

15

20

25

3049%

12%10%

24%

0%4% 2%

People Who Don't Use Digital Coupons

% of Total Sites

# of Users

1-2 Does mobile redemption affect which digital coupon deal site consumers use?

• Ho: usage of mobile redemption has no effect on digital coupon deal sites which consumer use

• Ha: usage of mobile redemption has effect on digital coupon deal sites which consumer use

• 56% of Digital Coupons Used were redeemed via Mobile

R2=0.2195% of confidence

38%

8%8%

6%

12%

29%

Used Mobile Redemption

ScoutMob

Rest.com

IDK

HalfOff

Living Social

Groupon

1-3 Do consumers preferences affect whether or not they use digital coupons?

• Ho: consumers’ preference has no effect on usage of digital coupon

• Ha: consumers’ preference has effect on usage of digital coupon

R2=0.39 95% of confidence

1-3 Do consumers preferences affect whether or not they use digital coupons? (contd.)

0

5

10

15

20

1319

128

14

511

19

13%

19%

12%

8%

14%

5%

11%

19%

People Who Don't Use Digital Coupons

% of all Pref Categories

0

10

20

30

40

50

60

70

80

90

51

8976

51

82

3257 61

10%

18%15%

10%

16%

6%

11% 12%

People Who Use Deals

% of all Pref Categories

# Responses

1-4 Do consumer preferences affect which digital coupon services a consumer uses?

• Ho: consumers’ preference has no effect on digital coupon deal sites which consumer use

• Ha: consumers’ preference has effect on digital coupon deal sites which consumer use

R2=0.1195% of confidence

1-4 Do consumer preferences affect which digital coupon services a consumer uses?

• Ho: consumers’ preference has no effect on digital coupon deal sites which consumer use

• Ha: consumers’ preference has effect on digital coupon deal sites which consumer use

R2=0.1295% of confidence

1-4 Do consumer preferences affect which digital coupon services a consumer uses?

• Ho: consumers’ preference has no effect on digital coupon deal sites which consumer use

• Ha: consumers’ preference has effect on digital coupon deal sites which consumer use

R2=0.1095% of confidence

2-1 Do demographics affect whether or not a consumer uses a digital coupon?

• Ho: demographics has no effect on usage of digital coupon

• Ha: demographics has effect on usage of digital coupon

R2=0.1395% of confidence

2-1 Do demographics affect whether or not a consumer uses a digital coupon? (Cont.)

• Ho: Consumer’s gender has no effect on usage of social coupon deal

• Ha: Consumer’s gender has effect on usage of social coupon deal

95% of confidence

2-1 Do demographics affect whether or not a consumer uses a digital coupon? (Cont.)

• Ho: Consumer’s marital status has no effect on usage of social coupon deal

• Ha: Consumer’s marital status has effect on usage of social coupon deal

95% of confidence

2-1 Do demographics affect whether or not a consumer uses a digital coupon? (Cont.)

• Ho: Consumer’s age has no effect on usage of social coupon deal

• Ha: Consumer’s age has effect on usage of social coupon deal

95% of confidence

2-1 Do demographics affect whether or not a consumer uses a digital coupon?(Cont.)

• Ho: Consumer’s age has no effect on usage of social coupon deal

• Ha: Consumer’s age has effect on usage of social coupon deal

95% of confidence

Who Use?

71%

29%

Use Digital Coupon & Gender

Female

Male

56%

44%

Use Digital Coupon & Marital Status

Married/Living with partner

Single

37

46

9

0 10 20 30 40 50

18-29

30-45

46-65

Use Digital Coupon & Age

814

1229

88

13

0 5 10 15 20 25 30 35

0-30K

31K-50K

51K-80K

81K-100K

101K-125K

126K-150K

150K+

Use Digital Coupon & Income

**In range 81K-100K, there are 13 respondents who did not answer the question, we assume their income are the mean, which is $94,477.

Who Do Not Use?

46%

54%

Not Use Digital Coupon & Gender

female

male

82%

18%

Not Use Social Coupon & Marital Status

Married/Living with partner

Single

5

14

9

0 5 10 15

18-29

30-45

46-65

Not Use Social Coupon & Age

02

64

1033

0 2 4 6 8 10 12

0-30K

31K-50K

51K-80K

81K-100K

101K-125K

126K-150K

150K+

Not Use Social Coupon & Age

Why Do Not Use?

0

1

2

3

4

5

6

7

8

9

Don't Know How

Not Familiar

No Need No Value Too Busy Too Many

Comms

11%

30%

7%11%

26%

15%

Reasons People Don't Use Digital Coupons

% of Total Response

# of Response for Reason

3-1 Does using a digital coupon at a place that you’ve used before affect consumers’ overall

experience with digital coupons?• Ho: prior to using the deal, consumers have purchased from business has no effect

on consumers’ overall experience on using digital coupon

• Ha: prior to using the deal, consumers have purchased from business has effect on

consumers’ overall experience on using digital coupon

R2=0.29 95% of confidence

3-2 Does consumer used which category of

business before affect consumers’ overall

experience with digital coupons?• Ho: consumers used which category of business before has no effect on

consumers’ attitude toward the businesses

• Ha: consumers used which category of business before has effect on consumers’ attitude toward the businesses

R2 = 0.16 95% of confidence

Coefficients Standard Error t Stat P-value

Intercept 7.000 1.187 5.898 0.000

Category_Used_RestaurantBar -0.930 1.197 -0.777 0.439

Category_Used_Retail -1.143 1.269 -0.901 0.370

Category_Used_Salon -2.143 1.269 -1.689 0.095

Category_Used_Entertainment -0.846 1.232 -0.687 0.494

Category_Used_Health Service -0.667 1.370 -0.486 0.628

Category_Used_Experience -3.000 1.370 -2.189 0.031

Category_Used_Travel -1.250 1.327 -0.942 0.349

3-2 Does consumer used which category of

business before affect consumers’ overall

experience with digital coupons?(Cont.)

0

2

4

6

8

10

12

14

16

18

1 2 3 4 5 6 7

People Who Don't Use Deals

Lowers Biz Status Friends/Family Use Deals

3-3 Do consumers view the business differently if they utilize social couponing?

• Ho: businesses utilizing digital coupon has no effect on consumers’ attitude toward the businesses

• Ha: businesses utilizing digital coupon has effect on consumers’ attitude toward the businesses

R2=0.4995% of confidence

3-3 Do consumers view the business differently if they utilize social couponing?

0

20

40

60

80

100

120

140

160

180

200

1 2 3 4 5 6 7

People Who Buy Digital Coupons

FriendsRecommend

PrevCust/BuyDeal

Tell Others

ProudSavings

FriendsRecommend

Uncomfortable

OnlyGoIfDeal

LowerBizStatus

NoBuy Upfront

Less Likely Very Likely

Coupon User

Demographics

• Female – 71%

• Married/living with partner – 56%

• 30-45 Age – 46%

• $81,000-100,000 – 32%

Lifestyle• Proud to save money • Enjoy going out• Highly engaged online• Always in the know• Green Lifestyle• Socialite

Lifestyle• Very busy• Not price sensitive• Traditional• Hands -on

Non-Coupon User

Demographics

• Male – 54%

• Married/living with partner – 82%

• 30-45 – 50%

• $101,000-125,000 – 36%

ImplicaitonsFor a restaurant targeting an older demographic partnering with health services would be beneficial.

-With partnering with health services, should avoid using Living Social.

As a business, targeting existing customers would be more beneficial than targeting new customers with digital coupons.

Should strongly consider Scoutmobbecause consumers who prefer mobility and who also prefer not to print deals are more likely to use Scoutmob.

-Scoutmob is also more likely used for restaurant than any other site

Targeting consumers with a high preference for restaurants is your best bet.As peoples preferences towards restaurants increases their opinions that it lowers a restaurants status decreases.

To create more of an experience for consumers, should provide an incentive for consumers to share through social networks. People that have no social network think only a few of their friends use deals.

Make it easier for consumers to use digital coupons by hiring brand reps/digital coupon ambassadors educating customers on how to use digital coupon—as age increases “don’t know how” becomes more frequent as the reason people don’t use digital coupons.