Does CVS really need a marketing campaign to boost ExtraBucks redemptions?

The NYT reports that only 49 percent of CVS ExtraBucks rebate coupons (free money!) are redeemed by customers. CVS wants this number to go up so it is launching “a humorous effort” to discourage “money trashers” from throwing away their ExtraBucks, which are printed at the bottom of their CVS receipts.

Does CVS really need to spend money on this kind of a campaign? The problem seems to be primarily about the placement of the ExtraBucks coupon, the coupon’s graphic design, and the ease with which someone can separate the coupon from the receipt itself (currently, the receipt has no perforation like some of the coupons you would find in weekly circulars). ExtraBucks accrue to ExtraCare customers who have already signed up for the program and swipe their card at the scanner every time they make a purchase in order to get the discount. Lack of awareness hardly seems to be the problem.

The Times reports that the marketing campaign is being rolled out alongside a coupon redesign that uses larger print and a “more eye-catching design.” Early results are “encouraging,” according to CVS, which says it noticed an increase of 5 percent in redemptions.

Now that the two are being rolled out together, disentangling which piece is responsible for the uptick redemption won’t be possible. This seems like a clear case where smart experimental design could help CVS assess the cost effectiveness of 1) A “money trasher” marketing campaign, 2) Various choice architecture changes to the delivery of ExtraBucks, and 3) A combination of a marketing campaign and choice architecture changes. Based on this current strategy, it’s doubtful CVS will be able to say much about the various tactics with any certainty. Too bad.

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  • Nosybear

    Interesting that you mention the experimental design.  I’ve observed that few with a business “education” know anything about experiments.  They just want to do something, solve the problem and so forth.  While the drive is admirable, the execution is often a catastrophe.  Ed Deming once called actions like this “making things worse through doing one’s best.”  MBAs do not think this way.  They change things.  They don’t measure.  They opine loudly and with great authority – they’re generally the ones in charge – about solutions when they haven’t even identified the problem.  And the business suffers.  Same thing in Washington but that’s a dissertation, not a blog comment.

  • http://twitter.com/eolsencreative Eric Olsen

    At one time, I thought I was a Walgreens loyalist. Mostly because I wasn’t aware of an alternative. Then, a CVS pharmacy popped up within a block of my house.

    When they handed me my first rewards receipt stating I had earned $4.50 back just for shopping there (fairly irregularly) over the last few months, I was in love.
    Then, I went back to cash it in, and it turned out that I had missed my 2-week window of cashing them in. (They have since extended the deadline to 90 days) At first, I had considered these ExtraBucks a free gift. When they were taken away from me, I felt I had been robbed.1) The cashiers don’t always tell you when your receipt contains your Extrabucks coupon. (so you might not save your receipt)2) If you lose this slip of paper, you’re out of luck. Why aren’t your ExtraBucks attached to your card?3) Your ExtraBucks can expire.Why on earth would you have a policy whose sole purpose would be to anger those you consider loyal?

    • Matthew J

      Your ExtraBucks are attached to your card.  Simply go online, register your card to you, and emails will be sent to you regularly with additional cost savings.  I recently used ExtraBucks along with emailed coupons to save $26.50 off of a Craig speaker system for my son.  I never use my actual card, solely using my phone number at the register with the cashier.  And no, I am not a crazy coupon person, but a regular dad that watches his budget and like how use hotely loyalty programs, stays loyal to one grocery store, one drug store, etc.  It all adds up if you do the spending right.

      • Matthew J

        Also, when you register, you will be alerted when ExtraBucks are available for use and you can print out at home.  This is one of their primary goals – to get you to spend time on their site and especailly to spend $ on their virtual store, sending out coupons regularly for website only promotions.

  • HoldUp

    Anything that requires me to give personal info for, I will not use. CVS is horrifying, slow, dirty and requires a spy card so I no longer go there.

  • jimmy

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