Do E-Mail Coupons Really Work?

Can email coupons really work?

I’ve asked this question before. Today, more information for you to chew on.

DiningDuck.com, from Creative Indoor Advertising, is a free service for restaurant patrons in central and northern Indiana. DiningDuck partners with local restaurants. Its members sign up to receive an email newsletter featuring coupons from local restaurants.

Here’s how it works: DiningDuck teams with restaurants (about 30, so far) to offer coupons through an email newsletter delivered and tracked by Neighborhood Email. The company advertises the program through word of mouth and ads in restrooms (Creative Indoor Advertising’s motto: “Delivering a captive audience since 1999”) in nearly 300 locations throughout Indiana. Potential subscribers visit DiningDuck’s Web site and answer a few questions, including email address, gender, and birth month.

Each month, members receive an email newsletter consisting primarily of coupons. (To see a sample, go to http://www.DiningDuck.com/sample.shtml.) The newsletter leads with the same friendly logo that resides at the top of DiningDuck’s Web site. Just below the logo is a personalized message. Last month’s began:

Dear Heidi, We’ve got more great coupons for you this month! Scroll down to see all the coupons available. To print a coupon, click on the “get coupon button” next to that coupon. A new web page will open to display the coupon you can print…

The newsletter then mentions DiningDuck’s monthly gift certificate drawing and the Feed a Friend promotion, in which members forward DiningDuck information to friends and family. Fifteen or so coupons follow, depending on the recipient’s location. These closely resemble the sample coupons. Many include a “view menu/get map” link that transports recipients to the individual restaurant’s one-page microsite, part of the service DiningDuck offers to its restaurant partners.

How well is the program working? Check out the following numbers:

• Unique open rates. Unique open rates average between 60 and 70 percent. Total open rate averages around 150 percent, indicating recipients open the message multiple times. This doesn’t include forwarded messages’ open rates.
• Unique CTR. Unique CTR averages between 35 and 40 percent, meaning over a third of recipients click at least one coupon each month.
• Database numbers. The newsletter began in February 2004, with a handful of subscribers. It now has about 3,750 members, with about 100 new subscribers joining each week. About 45 or 50 people sign up through the Feed a Friend promotion weekly. So far, fewer than 60 people have unsubscribed.

Though DiningDuck can’t track coupon printing and hasn’t undertaken a comprehensive redemption rate study, it has taken informal surveys of its partner restaurants. It found redemption rates range from 10 to 57 percent. In other words, of recipients of a given restaurant’s coupons, 10-57 percent actually redeem them. The “buy one, get one free” offer types often fall into the higher percentages.

One objection I’ve heard to using coupons in email a the business accepting them needs reassurance that they’re authentic. Several food manufacturers have told me they’ve tried distributing coupons by email, but stores won’t accept them. Here, this clearly isn’t an issue. The restaurant itself is involved in creating the coupons.

DiningDuck’s database is growing nicely for a regional newsletter; the response rates are something to be pleased about. I’m not the only one who thinks so. Restaurants sign up for a six-month program. Not one has yet dropped out of the deal (except a restaurant that folded), and all contracts up for renewal have been renewed.

Do email coupons work? DiningDuck, its partner restaurants, and restaurant patrons resoundingly say, “yes.”

Want more email marketing information? ClickZ E-Mail Reference is an archive of all our email columns, organized by topic.