by Richard Giedroyc
October 16, 2012 – The headline for this article may be deceiving. The logical primary mission of a mint is to issue sufficient quantities of coins to satisfy the requirements of either the domestic or some foreign economy. Why would your mint products need to be marketed?
In fact, marketing of both circulation coin products and of ancillary products that may create additional income streams for the mint (or its owners) are paramount. We are in the early 21st century. We are in the information age, but the information still requires dissemination. Information will not disseminate itself. Word of mouth is not sufficient. People do not read the inscriptions on coins to determine their face value or the country in which they are meant to circulate.
Using recent developments in circulating coins of the United States as an example, the current usage of the 50-cent or half dollar coin and the introduction of the one dollar coin are both dismal failures. The general public thinks the half dollar is no longer produced. Most of the public has no idea that the dollar coin exists. If they see one they question if the coin is legal tender.
The decline in the use of the US half dollar coin has led to a self fulfilling prophesy. As the circulation of the denomination declined the government had the options to either begin publicizing its existence or to capitulate by reducing production to coins meant exclusively for collector consumption rather than for circulation. Since the latter choice was taken this has reinforced the idea that the coin is no longer a viable currency. This in turn has encouraged hoarding rather than spending the coins when they are encountered.
The dollar denomination coin has evolved into a failure since its re-introduction in 1971. Since that date the coin has morphed from a recognizable 38.1 millimeter copper-nickel composition coin to a 26.5mm diameter copper-nickel coin confused with the US quarter, then to a 26.5mm diameter golden color copper-zinc-manganese-nickel coin in 2000 that is seldom promoted. The public typically thinks the coin is made of gold and hoards it, or isn’t certain if it is legal tender and tries to avoid using it where possible.
The same public that rejects using these dollar coins will purchase them in Proof sets, thinking the coins will become more valuable as they age. Why? Because the US Mint advertises that the mint is in the business of selling Proof sets. While the advertising for these sets tends to be concentrated in hobby publications, the mint also maintains an enormous mailing list of past customers to whom it advertises through direct mass mailings.
But even this has become a problem. The US Mint reported only 6,547 purchases of its 2012 Uncirculated Dollar Coin Set on September 20, this date being the end of the first full week of the availability of the 2012 set. The mint also reported poor sales results for its silver composition Making American History Coin and Currency Set.
In fact the US Mint was at the time this article was being written offering 29 different collector coin sets on its web site. The primary tool through which these sets were being offered was the mint’s existing mailing list. There was no all-encompassing catalog, just a confusion of costly mailers for each individual product. Is this marketing, or is this throwing all 29 of your products against the proverbial wall to see which if any of them stick?
The typical mint customer for collector sets has a budget and can only purchase a limited number of items. Many of these buyers will become disillusioned later when they learn how shallow the secondary market for these collector-only issues really is. Coin dealers will attest to the fact US Mint collector products decline in value in the secondary market unless they are precious metal products whose intrinsic value appreciates. The mint has failed to encourage a secondary market where demand exceeds supply. Without such a secondary market it can be anticipated buyers who learn this will stop buying, needing to be replaced continuously by new customers. It costs money to find these new clients.
The US can argue it did publicize the new golden color dollar coin when the coin was first introduced in 2000, but the coin’s lack of use in circulation indicates the publicity wasn’t sufficient. There doesn’t appear to be any effort other than by word of mouth now in place. There is no incentive program for the vending industry to use the coin. The coin is simply overproduced, then stockpiled in anticipation of some future demand that will likely never exist.Then there is Colombia, which in June introduced a new series of lighter weight coins, each with new designs. The counterfeiters literally beat the local mint to issuing 1000-peso coins, which has quickly become a major problem in that country.
How did the counterfeiters get away with it? There has been a lack of publicity regarding the appearance of the new coinage. Central bank director Jose Dario Uribe was interviewed by W Radio in April, but never revealed the appearance of the new coins!
Zambia is a good example of a nation where the proper publicity that should take place when new coins are to be introduced into circulation is taking place. On September 21 Bank of Zambia Governor Dr. Michael Gondwe called a press conference at which he indicated changes in banking systems, in accounting systems, and calibrations of Automatic Teller Machines are now taking place.
Gondwe said, “The technical guidelines are the basis upon which commercial banks and other stakeholders will conduct business before and during the rebasing exercise.”
That’s right. Dr. Gondwe said there will be a rebasing “exercise.” This is a hands-on component, not just another press conference or press release. There is also a countrywide “sensitization” campaign complete with posters and educational printed materials that will be used to publicize the upcoming January 1, 2013 currency changes. The publicity campaign is planned to continue throughout the entire fourth quarter of 2012.
According to the September 21 Zambia Daily Mail newspaper, this campaign is meant “to create awareness of the appearance of the currency before it becomes a legal tender.”
Coins may still be needed in commerce, but without publicizing your coin products continuously don’t expect them to be used automatically. Overproduction and storage costs you money. Market what you make.