Consumer Perceptions of Service Coupon Delivery

ABSTRACT: This paper develops an empirical foundation for understanding consumer use and perceptions of different coupon delivery methods, particularly relating to direct mail and Internet. Data were collected on consumer utility perceptions of coupon distribution methods from a sample of 403 respondents obtained from a national service coupon delivery firm. Results showed that customers who used the Internet to access service coupons perceived more economic benefits, higher user enjoyment, and lower time costs than those who used direct mail to obtain those same service coupons. Additionally, consumers using the Internet exhibit significantly higher levels of coupon innovativeness than those who used the direct mail. A discussion and implications of the findings are presented.INTRODUCTIONConsumer couponing behavior has seen resurgence in the past several years. Coupon offers from companies have grown. Websites specializing in coupons have emerged. Even television shows have documented the renewed interest as exemplified through TLC's Extreme Couponing, a show about shoppers who make extensive and focused use of coupons to save money while accumulating large quantities of goods. Throughout this resurgence, it has been noted that coupon clicking, as opposed to coupon clipping, has become a preferred method of couponing. A 2002 study reported that consumers downloaded roughly 242 million coupons from the Internet in 2001, more than a 100 % increase from the previous year. An attractive operational feature of the Internet as a coupon delivery option is that managers are able to lower the costs associated with printing and distribution of coupons. More importantly, coupons downloaded from Internet sources are three times more likely to be redeemed. Tedeschi (2003) reported that Internet coupons have a redemption likelihood of 3.1% as opposed to traditional coupons with a 1.1% likelihood of redemption. As services marketing managers increasingly think about allocating resources away from more traditional coupon delivery methods in favor of the Internet to take advantage of these savings, there is a growing need to better understand such things as why coupons secured through the Internet are more likely to be redeemed, what motivates consumers to seek coupons through the Internet versus more traditional methods, and who is more likely to use this coupon delivery option.The purpose of this paper is to provide an empirical foundation for better understanding how consumers who primarily use the newer electronic based method (the Internet) of obtaining service coupon offers perceive and evaluate it, as compared to how consumers who primarily use the more traditional direct mail method perceive and evaluate that service coupon delivery method. Two complimentary theories that are useful toward this goal are utility maximization and coupon innovativeness theory. These theories have been employed in the past to help explain consumer perceptions of the costs and/or benefits of their decisions (Shimp and Kavas, 1984), and their willingness to try something new (Goldsmith and Hofacker, 1991), respectively.LITERATURE REVIEW AND THEORETICAL FOUNDATIONCoupon Research: Much of the recent product coupon literature can be classified into two broad streams of research (Fortin, 2000; Guimond, Kim, and Laroche, 2001; Mittal, 1994). The first of these streams focuses on the effects of coupon characteristics on intended outcomes (e.g., redemption rates, brand sales, brand switching). The second relates coupon redemption to consumer characteristics such as demographics, individual difference variables, and costbenefit perceptions of coupon use.The investigation of service coupons (as opposed to product coupons) is also an emergent area within the coupon literature. Service firms frequently use coupons in order to influence consumer behavior (Hartley and Cross, 1988; Lovelock and Quelch, 1983; Taylor, 2001) yet this phenomenon has limited exposure in the literature. …