From Coca-Cola to AI: The Evolution of Coupons in Marketing

Today, we’re exploring a marketing tool that’s been around for over a century and is still making waves in 2024: coupons!

We’ll journey through history to see how iconic brands like Coca-Cola used coupons to fuel their success. Plus, we’ll look at how modern technology and AI are shaping the future of coupon marketing.

You might be asking yourself, “How do coupons attract customers? I mean, it’s 2024, aren’t people over coupons these days?”

Turns out, they’re not.

80% of Internet consumers report that they only sign up for emails to get discounts.

So, if you want to make more money from your emails, you need to create a coupon marketing strategy.

At its core, coupon marketing is about:

• Attract new customers.

• Retain current ones.

• Make them try new products.

The problem with coupon marketing often lies in how it’s executed. Many marketers offer discounts without a clear plan, which can make their brand seem cheap.

A solid coupon marketing strategy should consider:

• Who the target audience is

• What kinds of deals or discounts will appeal to them

• How to launch offers that catch attention without cheapening the brand

The best part about coupon marketing is how easy it is to track results. You can send your customers emails with special coupon codes and quickly see who uses them.

By testing different coupon offers, you can gather data on what interests your customers and how often they redeem your coupons. This information can help you shape your long-term marketing strategy and build stronger customer relationships.

THE BIRTH OF THE COUPON

Imagine a world without Coca-Cola. It's hard to fathom, right? But believe it or not, the iconic brand was once on the brink of bankruptcy. That was until a clever businessman named Asa Candler came along and changed the game with a simple yet ingenious tactic: coupons.

But let's start at the beginning. In 1885, John Pemberton, a pharmacist and former Confederate soldier, created a soda fountain drink that would later become Coca-Cola. The original formula was born out of necessity, as Pemberton struggled with a morphine addiction caused by a knife wound. He sold the recipe to Candler for a mere $2,300 (approximately $77,000 today), and the rest, as they say, is history.

Candler, the founder of The Coca-Cola Company, faced a daunting challenge: how to create demand for a new product. That's when he came up with the brilliant idea to distribute thousands of coupons for free Coca-Cola. This clever move not only increased demand but also helped Coca-Cola become a household name.

The tactic helped solve the “cold start problem”.

Coca-Cola sold syrup to pharmacies, general stores, and soda fountains. Candler gave free syrup to these retailers and distributed coupons in the area, stimulating both supply and demand simultaneously. The company reimbursed retailers for the free drinks, redeeming 8.5 million coupons in the first 25 years.

COUPONS AND CEREAL

In the early 20th century, food companies were trying to find new ways to attract customers. The Kellogg brothers, John and Will, were pioneers in this effort with their innovative cereal, Corn Flakes.

What made their approach so groundbreaking? They started one of the first major coupon campaigns. Inside each box of Corn Flakes, they included a coupon for a free box with your next purchase. This wasn't just a clever trick; it was a brilliant move. By offering immediate value, they not only boosted initial sales but also encouraged customers to come back.

The Kelloggs' strategy helped Corn Flakes become a beloved breakfast staple across America. Their success didn't go unnoticed. Soon, other companies began using coupons too. By the mid-1960s, almost half of all Americans were using coupons regularly. By the mid-1970s, that number jumped to three-quarters of the population!

Coupons quickly spread to various industries, from fast food to retail. Sunday newspapers were filled with them, and grocery stores even printed them on the back of receipts based on what you bought. Electronic shelf coupons also became popular to drive point-of-sale purchases.

COUPONS IN THE DIGITAL AGE

Even though clipping coupons is less common now, selective price discounting is still popular. Most software products use “promo codes” instead. You can send these codes via email, put them on a landing page, or even attach them to a referral program. Users get personalized codes that benefit both them and the people they refer. Promo codes can appear in ads or be mentioned by your favorite content creators.

However, the challenges that faced companies like Coca Cola back in the day are still around:

1. Do promos actually bring new customers, or just make existing ones buy sooner?

2.  Are you targeting the right people? Sending discounts to low-intent customers might result in one-off purchases that mess with your customer acquisition cost (CAC) and lifetime value (LTV) metrics.

3. How often do promos lead to fraud? Just like counterfeit coupons in the past, modern scams can involve fake promo codes.

4. Have you created discount loopholes? Can customers stack discounts, leading to unprofitable sales?

These are the modern dilemmas of marketing teams across the tech industry. It's easy to launch a new discounting campaign, get a big bump in revenue, and then realize that the revenue is low-quality. And you’re monetizing customers at a discount when you could be getting them at full price if you just had patience.

COUPON MARKETING IN THE AGE AI

We’re just beginning to embrace AI companions in our daily lives. However, I believe these AI companions are the next frontier for marketing techniques.

AI will help us with tasks, answer our questions, and even become our friends. But AI will also change the way companies market their products to us.

Just like how coupons were a way for companies to promote their products in the past, AI will become a new way for companies to reach us. We'll see different types of AI agents, each with its own personality and purpose. Some will help us with specific tasks, like recommending products or services. Others will be more like friends, chatting with us and keeping us company.

As AI agents become more common, companies will find new ways to market their products through them. We might see ads popping up in our conversations with AI agents, or AI agents recommending products to us based on our interests. Companies will also try to figure out how to get their products mentioned in AI conversations, just like how they try to get their websites to show up at the top of search engine results.

AI agents will also help companies reward their loyal customers. For example, an AI agent might offer you a discount on a product you've been eyeing, or recommend a new product based on your past purchases. We might even see AI agents sponsored by companies, like how some YouTube creators partner with brands to promote their products.

As AI agents become more advanced, we'll see new ways of advertising and promoting products. We might see video ads or interactive experiences that are tailored to our interests and preferences. And as AI agents become more integrated into our daily lives, we'll see new business models emerge. Instead of paying for services, we might see more free services with targeted ads.

One thing is for sure - as long as products and services have prices, there will be opportunities for discounts and promotions. And AI agents will play a big role in how companies offer those discounts to us.

The story of the coupon is far from over, and it will be exciting to see how AI agents change the way companies market to us.

CHATGPT PROMPTING FRAMEWORK

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