I received an email the other day regarding marketing that said, “I've been doing business with Groupon and they've basically become my partner......I am trying to find ways to convert referrals to customers, but can't seem to find the right bait. It's been exhausting. I was hoping you could give some advice and help save my business from the daily deals. When we started the business several years ago it seemed like a really good idea, but since then it is though we can’t escape their grasp.”
As I read it I thought, aren’t we done with daily deals yet?
Could that garden center’s money have been better spent?
For a fraction of the true, hard costs of attracting cheapskates to their store, they could have sold what they had.
For full price.
To customers who value an exceptional experience.
To customers who don’t only show up when there is a fire sale.
Market to cheapskates and they’ll find ways to give the minimum from their wallet to get the maximum from your bottom line.
Take a look at these comments that followed a Washington Post article on customers coming in and only buying one item: “I never go through the upsell hassle” and “We don't buy any of the electronic gizmos and gadgets so nobody can upsell me on anything anyway. My 10-year-old Tracfone flip phone works just fine.”
These are not profitable customers to attract...
Oh right, you still don’t believe me?
How about another garden center that found out the hard way about using Groupon to market their business….
I asked Chellie Zimmerman, owner of Black Horse Farms Market in upstate New York if the money she lost doing a daily deal was real. She answered, “Yes that is REAL money LOST! Another bad thing is that your regular buying customers jump on Groupon when they would have been just as happy spending $100. Of the 500 we sold about 25% were existing customers and maybe we gained 2% as new customers.”
And from your local paper and DealSavers to a large number of online companies operating like Groupon including LivingSocial, Tippr, and more, their model appears to always be the same. They’re willing to take half of what you offer without any responsibility for fulfilling those certificate sales.
One woman I talked to last Sunday told me her friend offered a daily deal to attract new customers to her spa. She’s now so booked taking care of deals that her regulars can’t get in for two months and are going elsewhere.