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Why Deeply Discounted Coupons are bad for Branding

Going to Borders made me think about branding and how deeply discounted coupons are so bad for your brand. As consumers, we love coupons, and getting a 30-40% off on a book is a great deal. The problem with these deeper discounts, as Borders offers, is that consumers lose the desire to pay full price for the book they always wanted. At first this deal seems too good to be true. It creates this sense of urgency where you need to go into the store to take advantage. Sales for the store are up and every thing seems great. But then that scarcity runs out. Borders, for example, runs one of these deeper discounted coupons on any item every week. For the past couple weeks, while Borders has been scrambling to stay alive, I’ve received a coupon pretty much every day. The scarcity ran out and I pretty much ignored them. Worse (for Borders) I pretty much expect that their is a coupon that I am entitled to at the store that is deeply discounted. So the perception to consumers is that these books are overpriced.

Don’t get me wrong, an occasional slightly discounted coupon can be a great way to spark interest in your goods. But for myself, and as I am sure other consumers, as these deeper discounts become more regular, we no longer pay full price for books. Borders has made books such a commodoty and a deeply discounted one. In fact we won’t shop until we get the illustrious 40% Off coupon. Borders would likely see better profits with more targeted, slightly less discounted coupons.

This last weekend, I went to the closing sale of the local Bozeman Borders where they had only taken 20% off most items. The place was hysterically packed with people. Funny that this is the most people I have seen in the store ever, including Christmas. Ironically the regular store coupon (which is actually 33% off) this week. Had the store remained open, this coupon would be valid and a far better deal. At the end of the day It’s still hard to believe that the Bozeman Borders is closing, but yet it’s becoming fairly apparent as to why.

Wishing the employees the best and your store will be missed.

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