We use coupons every day, but what exactly are coupons?

Because of my work, I have been dealing with coupons almost every day for the past two years. I think all my colleagues have been asked this question: "I heard you work at XX, give me a coupon~" and then the friendship boat capsized~~ heavy fog

The essence of coupons is price discrimination

Coupons originated in the 1820s and are still, in most cases, something that makes consumers and businesses happy. When consumers get it, it means they can get goods or services for less money; when merchants issue coupons, it means there is a possibility of obtaining conversions, winning more customers and making more profits.

However, in essence, coupons are actually a "price discrimination" strategy of merchants. Price discrimination occurs when businesses charge different fees for providing the same level of goods or services to different consumers.

Why do this? Since it is the same product or service, wouldn’t it be fairer to have a unified price? This is because every consumer has a scale in his heart, and not everyone has the same psychological expectation of the price of a product.

For example: popcorn at the cinema costs 15 yuan a bucket. A thinks this is simply robbery, but 5 yuan is acceptable. B thinks it is a bit expensive and will buy it at 10 yuan. C thinks 15 yuan is reasonable and is the standard for watching movies. However, the actual cost of popcorn is only 3 yuan.

If the same charging standards are applied, the profits of the cinema will be as follows:

• When the price is 15 yuan, only C will buy it, and the profit = 15-3 = 12
• When the price is 10 yuan, B and C will buy it, and the profit = (10-3) * 2 = 14
• When the price is 5 yuan, ABC will buy it, and the profit = (5-3) * 3 = 6

Is it possible to get higher profits? This is where gold vouchers come into play. The cinema gives A a 10-yuan coupon, B a 5-yuan coupon, and no coupon to C. The price of popcorn is still 15 yuan. The profit of the cinema is as follows:

(5-3) + (10-3) + (15-3) = 21

The above example is a simplified and ideal scenario. In reality, consumers will not clearly tell the merchant what price they expect. Being able to accurately meet consumers' expectations and reasonably distribute coupons is a challenge to the merchant's operational skills.

However, from the above examples, we can see that coupons are an important tool to help businesses engage in price discrimination. By making good use of coupons and meeting the expectations of different consumers, businesses can earn more profits.

The role of coupons for merchants

1. Maximize profits and minimize consumer surplus. When prices are fixed, merchants can only make profits from a fixed group of consumers who accept the current prices. However, after price discrimination, multiple price levels appear and merchants can obtain value from new consumers. Charging different prices to different consumers can maximize profits.

Consumer surplus = maximum price buyers are willing to pay - price buyers actually pay. Let’s take the above example again. Audience C thinks popcorn is worth 15 yuan. If the price of popcorn is 10 yuan, his consumer surplus = 15-10=5. For a customer who thinks popcorn is worth 15 yuan, of course we sell it to him at 15 yuan. This way, the consumer surplus is 0, which is most beneficial to the cinema.

2. Classify consumers and distinguish between "poor" and "rich". The terms "poor" and "rich" are used here as metaphors, and do not really refer to income and economic conditions. “Poor people” refer to those who are price sensitive and willing to spend time searching for deals. "Rich people" refer to those who don't care about discount information and just buy directly. As mentioned earlier, because consumers will not actively tell merchants what their expected price is, by issuing certain coupons, merchants can distinguish consumers with different payment intentions and conduct long-term user management.

3. Stabilize prices, provide flexible discounts, and buffer against price increases. When a merchant wants to promote a sale, if he lowers the price directly, it will be difficult to raise the price later. When operating costs increase or prices are forced to rise due to inflation, sudden price increases are difficult for consumers to accept. At this time, vouchers can maintain prices and capture price-sensitive consumers.

4. Flexible iteration and refined operation. Designing a set of flexible coupon tools can help merchants carry out their operations in a "faster, better and cheaper" way. This can achieve the goals of promoting designated products, attracting new users and improving retention. If it can be connected to the merchant's membership system, it can also provide data support for member behavior tracking and analysis.

Function and rule design of coupons

5. Promotional carrier. Whether it is a physical coupon or an electronic coupon, it can be fully used as a carrier for event promotion . It is important to add a sharing factor to the coupon to expand the reach.

The impact of coupons on consumers

1. Make consumers want to take advantage of bargains and stimulate consumption. From not buying to buying, from buying to buying more.

2. Changes in coupon package combinations make consumers less sensitive to prices. A common practice in some fast food restaurants is: hamburger + chicken wings + cola, or hamburger + French fries + ice cream... In short, they often offer various coupon combinations. In fact, the purpose of cola and French fries is to confuse people.

3. Consumers’ time costs increase, but sometimes they enjoy it. Sometimes it is not easy to get coupons, and consumers even need to search, download, print and redeem them. Young people and students with limited spending power are more willing to do so. Therefore, some people label such users as low-value users, but I do not completely agree. Think of the discount code strategy of a certain taxi-hailing app. Its users are often white-collar workers with high consumption and good financial ability, but they are willing to gather in forums and QQ groups online to share discount codes. For them, this is a sense of superiority that goes beyond the simple mentality of taking advantage.

Tips:

• What people need is not to take advantage, but the feeling of taking advantage.
• A discount that everyone can get is not a discount.