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Headache Relief December 16, 2010

Filed under: Resources,Strategy — Carla Bobka @ 11:59 pm
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Up to now, retailers who loved Groupon still had a bone to pick with their redemption process. While 66% of business owners describe their Groupon offers as “profitable,” many feel mired down with the redemption process. It is a paper-laden process thrust on retailers during the whirl of visits from Grouponees, many of whom are first-time customers.  Fumbling through paper to cross off a coupon-redeemer is not the “new customer experience” business owners want remembered. If the business has multiple locations to redeem the Groupon offer, the paperwork became even more cumbersome.

Imagine cross coordinating between locations which coupons had been redeemed? Yuck. If you don’t wade through the cross checking customers could redeem a single Groupon multiple times by going to each of your locations. That’s a recipe for cash flow nightmares.

“How many more cupcakes should I make?”

“Idon’t know, how many more Groupons are left to come in?”

“Well, let me count how many are crossed off on our 12 page list.”

“Wake me when you’re done.”

It seems Groupon has been listening to the gripes and developed iPhone and Droid based mobile phone apps to simplify things.  The apps were announced to Groupon subscribers via an email today. The apps are free, are available for download now and have been tested with select retailers. Keep in mind this app is different than the one telling buyers what Groupon is available each day. This is specifically built for the business owner.

As of posting time there were 2 reviews on iTunes about the app. Both ratings 4+. Time will tell if it’s a cure or just something to dull the pain.

What have your Groupon redemptions been like? Tell us in comments.

 

Was LivingSocial promo worth it November 8, 2010

Self Indulgence Tanning and Self Spa coupon from Oct. 27, 2010

On October 27, 2010 Self Indulgence Tanning and Self Spa ran a coupon via LivingSocial. It went out to the Wilmington/Newark DE subscriber list. Today’s post is the story of what happened from the owner’s perspective.

As of 11:00 am two email recipients had called to ask questions about the specific treatment featured on the coupon. The calls continued all day. From the Owner’s Page on LivingSocial.com Judy Grabowski, owner of Self Indulgence, could watch sales of the coupon follow shortly after most phone calls.  By 4:30 she had tallied 54 coupons sold.

On that same page she could see tally count of coupons sold, demographics of the buyers and the amount of the check she would recieve from LivingSocial. If she wanted she had the ability to set a cap on the number of coupons sold. Once the deal was over, she would get a list email addresses and names for those who’d bought the coupon.

Judy specifically chose not advertise the LivingSocial coupon to her existing customers. She wanted to see it play out organically. That would tell her how many of her existing clients were shopping for deals via email coupons. (If you’ve watched LivingSocial or Groupon offers, spa deals do very well. Which leads me to believe the market is huge and loyalty may be low.) Yes she was hoping the deal would bring her mostly new clients. But, she was willing to accept that existing clients would benefit, as well.

The demographics provided on the buyers helped her learn more about her customer base. She could see their geography laid out on a map, how they made the purchase (iPhone app or via the email) and time of day the purchase was made. From that information she could infer other things:

  • How far were they willing to drive for services and what direction they were coming from. That could help her open another location in the future.
  • How many of them use iPhones.  One of her treatment vendors has an iPhone app, too. Maybe clients would be receptive to offers from their app as well if she made them aware of it.
  • Time of day they are most receptive to spending or at least time of day they are most decisive. If she does other newsletters it gives her a clue as to the best time of day to hit their email.
  • From the phone calls she learned what questions people had about a specific treatment, FIT Bodywrap.  She’ll be sure her staff hits on key points that resonate with buyers.

I know, inference is not a sure thing. There’s no way to know when the coupon will be used, or if the customer will become a regular. There’s no way to know how long people considered the purchase before making the buy. But it’s all good information to begin exploring and testing with other promotions and communication tools.

Lessons learned to help you with a similar offer:

  1. Be sure your staff knows the details you included on the email sent out by LivingSocial.
  2. Be sure staff can speak intelligently about the promotion and the specific service or product you advertised.
  3. Have enough staff on duty to handle the phones and your regular traffic.
  4. Gather info on the offer from more than just LivingSocial’s tools.
  5. Have a specific goal – Judy’s was to see what would happen with no promotion beyond those on LivingSocial’s list.

Have you tried a similar offer? What did you learn? What would you do differently?

 

Groupon – The Good and the Ugly September 23, 2010

Too-good-to-pass-up deals in your city, emailed to your Inbox.

Groupon is the latest wunderkind of social networking. In the last 3 weeks they’ve been the feature of stories in everything from Fast Company to NPR, Today Show, Good Morning America, and was named the #1 Hottest Website for 2010 by Fox Business News. They offer hyper-local marketing in 140 markets in the US. Offering one too-good-to-pass-up discount everyday to their email audience. Here are some past offers.

Today I read a horror story from Posies Cafe. It got me thinking we need to talk carefully about who it’s right for and how to strategically plan for wild success and its aftermath.

How Groupon Works:
1. Each day they feature something from an advertiser, something cool to do at an unbeatable price.
2. The offer only goes live if enough people join that day… so inviting friends is encouraged.
3. Check back the next day for another awesome Groupon.

Groupon Target Audience:
They’re socially active, both online and off. Here are the demographics.
– 50 percent go out twice a week or more
– Habitual users of Facebook, Twitter, blogs, and other social media tools
– Savvy Online Shoppers

What the Groupee gets:

Exposure to highly targeted audiences.

– Sales at deep discount.

– Payment before the end user gets the product or service.

What’s in it for Groupon:

Groupon takes a commission on every sale. They provide the audience and the distribution channel. They process all the transactions and take a cut. Usually it’s 50%.

How it’s changed business

Groupon’s model rearranges payment’s spot in the transaction. Payment happens in advance of the consumer using the coupon at the retailer. It moves you getting paid closer to the front end of the process. That could be good for your cashflow.

In deciding if Groupon is right for you, look at it from all angles. Run the financial scenarios for 50 sales for 500 sales. Ask yourself these questions:

  • What will you do with the exposure when you get it?
  • How will you stay in touch with the new customers it brings you?
  • How will the influx of business affect existing customers, and can I live with a worst case scenario?
  • What are my true costs of the deal?

Groupon’s biggest competitor is LivingSocial. Some of the details are different, but it’s based on the same principles of group buying power, and people sharing good deals with friends.

Other articles to help you decide if Groupon or LivingSocial is right for your business: