How To Do Discount and Coupons For The Elite Audience

We discussed the basics of coupons earlier. Here is a look into common pitfalls and the best way to do coupons for the elite audience. Elite here means an audience that has some value for its time and generally has a high spending capacity. Typical desirable audience for first world hospitality and services industry.

The Problem with regular coupons:

  1. It’s too embarrassing for the “elite” to ask for discounts. You don’t want to show your BOGO voucher on a coffee date.
  2. The process of asking for discount is confusing. Do you present the voucher before ordering, before billing or during payment?
  3. Most businesses in service industry like, restaurant, spa or hotel, will give you an inferior service if you presented a discount voucher or a Groupon. Try booking a hotel directly over phone/walk-in vs through the popular no-frills hotel booking company, chances are that you will get far inferior room in the latter case.

Other problems:

  1. Repeat usage by non-target audience.
  2. Lack of data on usage pattern.

Target Feature:

  1. Make the redemption invisible. Only the person paying should know about the discount. This way there is no confusion or embarrassing moments.
  2. You declare you are going to use the coupon, before entering the store. If there is condition that you don’t satisfy, like time of the day or day of the week, it should be told before hand.

Possible Solutions Points:

  1. Booking system — A pre-paid table booking system could book you for a discount but it wouldn’t be very flexible with respect to what was finally ordered by the consumer. Good for a single price product not good enough otherwise.
  2. Payment system — A payment system is robust to address all of the above issues. Like a credit card company giving you a 15% cashback on your total bill amount. The waiter doesn’t need to know anything. The bill is of full amount so it’s not embarrassing when you have a companion along.
  3. A billing + payment system — This combination ticks all the boxes, specially when you want to run a product specific promo. The billing system can pass the purchase details and payment system can enable the redemption. The integration though is very high touch. It’s not going to be easy to execute.

Payments system as a loyalty and discount system:

  1. Tap the app to “claim” a coupon before entering the store. This is to make sure, that just about everyone doesn’t get discount, even though their decision to buy was not get triggered by the coupon.
  2. Read the amount paid via the SMS and process a cashback.

A company like Paytm with Little is well positioned to do this. I was really hoping something of this kind from Paytm. A loyalty program /promotional marketing product run by a payments company is a powerful thing. What if you don’t want to or can’t wait to build a payments system?

Build a payment aggregator!

Imagine a system that can read my credit card statement. It can as well send cashbacks to my card. An app that can read my location and transaction sms, can very well do this through any non-cash payment system, without the restriction of single payment mode. Having the ability to read my card statement and have my phone logs also means that the campaigns can be highly targeted.


Originally published at Naman Sarawagi.