June 16, 2011 at 12:01Groupon: an alternative view from the owner of the business publishing his proposal
Hysteria about Groupon and similar services has swept most major cities. Therefore, the number of people who want to try for their business is constantly growing. “Business representatives are 95% satisfied, they are ready to take advantage of the same percentage again, and 96% of them I recommend to my friends and colleagues,” this is what they say to us on the Groupona website . However, the picture is not so rosy as it might seem at first glance.
I apologize in advance if someone thinks the article is one-sided and too dark. I just urge you to take a critical look at collective shopping services if you want to use them for your business.
Let's figure it out in order. What Groupon offers us - do I want, as a business owner:
1. Have a guaranteed way to get hundreds and thousands of customers?
And how many of them will become your customers later? Groupon does not provide such data, but it is clear that the lower the% return, the less profitable it is for business owners. It is clear that it is worth discarding:
a) Freeloaders who use only coupons, they do not care what kind of place and service, the main thing is cheaper. They will return to you only with the next coupon.
b) Already existing customers of the institution. This is just the biggest headache. Imagine how much you will lose if a client buys a service from you for 100 rubles. And here he buys it at a 50% discount, i.e. he pays 50 rubles. of which you get only 25, giving the second half to Groupon. Yes, and there can be no talk of any loyalty; the discount is not associated with you, but with Groupon. And you will still have a regular customer and will be angry: he walks to you, walks, you didn’t even offer him tea for free, but here he, along with all the others, gets mega-freebie in the amount of 50%.
As a result, for you a decrease in loyalty and losses from regular customers who have already bought a coupon.
2. Do not lay out round amounts for marketing?
You already pay these amounts, giving a discount. Feel the difference: spend 30 thousand rubles. on a banner and get 100 full clients or sell 400 coupons (visitors) for 100 rubles each, losing 75 rubles for each of them. less received or the same 30 thousand. Figures are conditional, but their order is approximately the same.
I do not take into account outstanding coupons if the price of the coupon is 100 rubles. and higher, the visitor will probably use it, in a pinch, give or sell coupons on resale services (such, if they haven’t appeared yet, they will be accurate soon).
3. So that your brand stands on a par with the brands of the best and favorite institutions of the city?
Who do I love? On the day on the coupon aggregator, I see about 100 coupons, and the best brands among them are not particularly visible. Basically, here are companies that no one has ever heard of. And how many brands will I remember from this list? It should be understood that sometimes visitors look only at the size of the discount and the type of service (product), then they pay attention to the name later.
4. To get customers with higher solvency than you have now, or to gain a new type of audience?
Of course, all the guys buying coupons have a lot more money than the clients (for example) of my restaurant with an average bill of a couple thousand. A new type of audience freeloaders - yes, I really need them. I agree, there arewhite and fluffysolvent, but what is their percentage, who will return to me and be my client forever?
5. Rely on us for the correct calculation of workload, staff training, copywriting, and call center support?
No one knows if the stock will “shoot”. There are two factors that can affect the number of coupons sold: the frequency of use of the service and the size of the discount. You must understand that with the growth of discounts, the size of the non-target audience also increases. You can predict the results, but I have already seen several actions where the owners clutched their heads from the influx of visitors and had no idea when to serve them all.
I will not judge about the support of the call center, but for all my calls as a client, and there were 10 of them for sure, they sent me to the organizers of the action and asked to clarify all the information from them.
Conclusion: you need to be more careful about this fashionable thing, as long as there are no statistics, it is difficult to understand if this is a plus for business or loss.
I apologize in advance if someone thinks the article is one-sided and too dark. I just urge you to take a critical look at collective shopping services if you want to use them for your business.
Let's figure it out in order. What Groupon offers us - do I want, as a business owner:
1. Have a guaranteed way to get hundreds and thousands of customers?
And how many of them will become your customers later? Groupon does not provide such data, but it is clear that the lower the% return, the less profitable it is for business owners. It is clear that it is worth discarding:
a) Freeloaders who use only coupons, they do not care what kind of place and service, the main thing is cheaper. They will return to you only with the next coupon.
b) Already existing customers of the institution. This is just the biggest headache. Imagine how much you will lose if a client buys a service from you for 100 rubles. And here he buys it at a 50% discount, i.e. he pays 50 rubles. of which you get only 25, giving the second half to Groupon. Yes, and there can be no talk of any loyalty; the discount is not associated with you, but with Groupon. And you will still have a regular customer and will be angry: he walks to you, walks, you didn’t even offer him tea for free, but here he, along with all the others, gets mega-freebie in the amount of 50%.
As a result, for you a decrease in loyalty and losses from regular customers who have already bought a coupon.
2. Do not lay out round amounts for marketing?
You already pay these amounts, giving a discount. Feel the difference: spend 30 thousand rubles. on a banner and get 100 full clients or sell 400 coupons (visitors) for 100 rubles each, losing 75 rubles for each of them. less received or the same 30 thousand. Figures are conditional, but their order is approximately the same.
I do not take into account outstanding coupons if the price of the coupon is 100 rubles. and higher, the visitor will probably use it, in a pinch, give or sell coupons on resale services (such, if they haven’t appeared yet, they will be accurate soon).
3. So that your brand stands on a par with the brands of the best and favorite institutions of the city?
Who do I love? On the day on the coupon aggregator, I see about 100 coupons, and the best brands among them are not particularly visible. Basically, here are companies that no one has ever heard of. And how many brands will I remember from this list? It should be understood that sometimes visitors look only at the size of the discount and the type of service (product), then they pay attention to the name later.
4. To get customers with higher solvency than you have now, or to gain a new type of audience?
Of course, all the guys buying coupons have a lot more money than the clients (for example) of my restaurant with an average bill of a couple thousand. A new type of audience freeloaders - yes, I really need them. I agree, there are
5. Rely on us for the correct calculation of workload, staff training, copywriting, and call center support?
No one knows if the stock will “shoot”. There are two factors that can affect the number of coupons sold: the frequency of use of the service and the size of the discount. You must understand that with the growth of discounts, the size of the non-target audience also increases. You can predict the results, but I have already seen several actions where the owners clutched their heads from the influx of visitors and had no idea when to serve them all.
I will not judge about the support of the call center, but for all my calls as a client, and there were 10 of them for sure, they sent me to the organizers of the action and asked to clarify all the information from them.
Conclusion: you need to be more careful about this fashionable thing, as long as there are no statistics, it is difficult to understand if this is a plus for business or loss.