Bed Bath and Beyond just announced that their coupon strategy is backfiring and that their profits are hurting because everyone is waiting for the coupon to do their shopping.
Umm… yeah. When you send the coupon out every week and never enforce the exclusions or expiration date, you pretty much send out the message that everything in the store is always 20% off. Anyone paying full price in that store is either lazy or an idiot.
What used to be special is now considered the norm.
BBB faces a dilemma. They either have to drop the coupon program and wean customers off the 20% discount (a daunting and dangerous task), or raise the bar on the coupon program to make it special again.
They said in the article, “Bed Bath and Beyond says it plans to draw in more customers through marketing.”
Okay, but how? A bigger, deeper coupon every so often? (further eroding profits) or something else?
If you are doing something special for your customers, eventually it goes from special to expected and the marketing pull from it will taper off. If it is a discount, that discount will have to grow over time to remain equally effective.
If you consistently go above and beyond your customers’ expectations, eventually they will come to expect it, meaning you’ll have to raise the bar even farther.
As you choose your marketing strategy, remember that the special things you do today will become the norm tomorrow. Make sure you have room to raise the bar when the effects start tapering off.
PS Surprise and Delight are the best tools for attracting new customers because you’ll never run out of new and fun and inexpensive ways to surprise and delight your customers. Check out these two Free Resources to get some ideas of things you can do to raise the bar and attract more customers – Generating Word of Mouth and Customer Service: From Weak to WOW!. I doubt either of these will be strategies employed by BBB (although they should).