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Coupon Expiration Period Trends
As a means of spurring faster sales and controlling liability, marketers are shortening expiration periods, or the length of time during which a consumer can redeem a coupon. In fact, in the past 10 years, the average expiration period of manufacturer coupons has decreased 30.3%, from 3.3 months in 2000 to 2.6 months in 2009.
At the same time, research shows that consumers are not fond of short expiration periods, stating that shorter expiration periods often don’t allow them enough time to use the coupon. Further, when the percent of coupons redeemed by expiration period is indexed against the percent of coupons distributed by expiration period, results show that consumers have a definite preference for coupon offers with longer expiration periods.
Pulling from a rich internal database, Inmar has been able to derive the following key learnings regarding coupon expiration periods:
- When setting a coupon’s expiration date, it is crucial to consider the lead times associated with the various methods of coupon distribution.
- Short expiration periods can produce higher redemption rates when distribution dates are tightly controlled. However, very short expiration periods (less than a month) may inhibit promotional performance.
- Distribution method and product category, coupled with expiration periods, will influence the final redemption rate.
- Marketers should analyze the effects of expiration period on promotional performance for each of their brands to determine the optimum expiration periods to use.
- Marketers should consider tying expiration periods to product purchase cycle. If expiration periods are too short, the consumer may not have enough time to use your coupon. If they are too long, competitors may preempt your coupon promotion and draw your consumers to their products.
More information about the subject can be found in Inmar’s Advantage Update, “Military Coupons”, which can be downloaded from the Client Access Website.