Be true to yourself …. To Groupon or not to Groupon?

A while ago I shared a story about a cake company who were put in a sticky position by Groupon, on my Fanpage.  It lead to a conversation where people shared their business experiences with Groupon some good and some bad.  I’ve picked a few points from the thread it had a total of 35 comments so apologies if I didn’t use yours.

David Gillard – We had one successful promotion on it, and one which was a nightmare. Normally have quite a structured way about marketing – ie: only going for our clear demographic. Groupon is too wide, and unfortunately for us we attracted people who wouldn’t normally be a target for us and thats where the problems were. Everyone has a different experience, based on our 1st experience we’d repeat it, based on our 2nd we wouldn’t. As with everything, negogiate hard if you do go with one of these type companies and never give the 50% commission to them, they will budge if you push hard enough and will put in clauses and limits if you tell them too. On the plus side it does get you in front of a few hundred thousand people.

David makes a clear point that advertising should be targeted running a children’s soft play he needs to be advertising in mum/child orientated places more important local to him. He would have been better off using Facebook to put out a special FB likers offer as all those on his page will be users of Serendipity Sam’s this is a much more targeted forum.

DK Capture Photography & Studio Hire You have to look at Groupon and Living Social as A PR thing more than money making. We have run with three offers and have offered packages which we can up sell. If you offer a package with no chance of addtional sales you may aswell through money down the drain.

I agree whole heartedly with this point Groupon and the likes of are only ever going to increase brand awareness and add ons to your package a must (just think about when you go to the hairdressers you always end up buying hair products or having a head/hand massage etc … Hairdressers are the queens of up selling).  My issue with this form of marketing is the people who won’t then use your business nor pay full premium do you want to waste time on them in the beginning?? Business is about building relationships with customers – there WILL always be people who are only after a bargain regardless of the service you provide they will never come back, well not till the next Groupon Deal.

Work it baby – I’m 50/50 on whether I’d do another, if I did I’d keep it to a one off annual deal with different deal/service/product each time. I think if you always do deals it just de-values your services especially when it’s something like Groupon as the discount is so high. For me as my service is quite niche if was always unlikely the deal was going to sell more than I could handle so maybe that’s the key. Groupon made out like the deal would turn my business around overnight as I’d only be going 4 months when we were discussing the deal but it definitely didn’t do that. A lot of the Groupons were never claimed, I think people buy on impulse because it’s such a bargain and never actually get around to it before it expires (or maybe that’s just in my case as exercise requires some motivation to get to the actual door). Possibly a blessing in some cases if you over sell. Groupon never lose out though because they keep all of your percentage if people don’t come through the doors, where I know other daily deals you get paid your percentage for all you sell whether they are used or not. For me although I’m unlikey to do it again on my current services I probably would do it again. For me as they were no extra costs for running the deal it was a no brainer. All the things I had to have to run the deal i.e music licence, insurance, venue etc I was already paying for so unless the deal oversold to the point I needed to add additional classes I would have no extra costs (being new to business I didn’t have much of a existing client base to be frank, so they were plenty of spaces to be filled). As it turns out I could control the deal, happy days 🙂 . From it I got new members who’ve now became some of my best customers – as in great to work with, happy to pay full price and most importantly recommend me. That early on in business and with virtually no marketing budget they was no way I could of got as many people to know about my business as Groupon did without it being very costly. My website visits were great that week! So what I’d say to anyone thinking of doing a groupon is if it’s at no extra cost or low cost to you and you have means to be able to cope with the deal then I’d 100% recommend it. If the deal will cost you a lot to run then I’d stay well clear. If your hoping to get customers who will value your higher end services or product then again weight it up. I’ve got some of my best customers from Groupon but from the deal only just over 50% were claimed. Of that 50% half of those I didn’t see again after all sessions were used and the other half is split 50/50 – half come occasionally but the other half now attend every week!

Completely mixed reviews form Work it Baby but she has mentioned everything I would have said.  Especially the part about devaluing your business – a sale here or there, a random special offer that’s fine but too many businesses are always having sales – I always think this makes YOU look like YOU don’t think its worth the premium price you bestowed upon it and if this is true then change your prising structure go in low and sell higher volumes you will look far more credible. Then excitingly the company who Cake Heaven blogged about – Need a Cake – replied to me thread!

Hi all, Just to clarify a few points. Anyone could use the vouchers not just new customers. We had a limit but Groupon lifted it off there own back and sent the offer out to other areas. We had a job stopping them sending it to even more areas, I never dealt direct with Groupon only through a third party which was the first problem, secondly lifting the limit they had no right to do this, then the voucher codes people had did not work so 1000,s phone calls. Groupon issued incorrect codes. They set the price of the cakes not me. You can talk forever but Groupon is not there to support, we only got £2.20 per box Groupon had the rest. We lost money over the volume as we had to employ agency staff for the cakes and office etc, Royal mail increased postage costs during the time and we were not allowed to increase ours. There is a vast difference in 1000 orders to 12,500 orders of a dozen cakes. So advice dont do Groupon. There are loads of other ways to get clients and good faithful ones. Yes we made a mistake i dont want to see you make. We are over it and smiling with a few Grey hairs.

Then low and behold as of by magic I get an email from Groupon asking me to run a competition on my blog and that they would pay me £50.  So here within lies the ‘being true to yourself‘.  I’m just like everyone else I have 3 children to feed, a home to run, a car that eats money so it would have been easy and possibly forgiveable for me to say .. yes thanks show me the money!  But what kind of message does this put out to my followers?  I don’t believe in the Groupon way of marketing, I don’t believe Groupon are supportive and have the best interest of the businesses at heart … so instead of taking their money I wrote this post.

M,M & O – beeans on toast for tea 😉

5 Comments

  1. January 11, 2012 / 9:14 am

    Have to agree Joanne – as a business model it’s purely a way of promoting and advertising, not making a profit. You therefore have to weigh up whether it’s right for your particular business … and it’s not for me! 🙂

  2. January 11, 2012 / 9:38 am

    Great post – shame about the £50 – hope something better comes along!

  3. Liz Beavan
    January 11, 2012 / 9:40 am

    Very interesting read! I’d never heard of Groupon to be honest but good to see all the opinions of them so I am forewarned. Thanks Joanne – enjoy your beans on toast! ;o)

  4. January 11, 2012 / 1:46 pm

    OMG! i gasped when reading the reply from the cake lady! i would take that company straight to court! i can’t even believe that groupon lifted the limit! after what i said r.e. groupon i still stick by it but have been speaking to living social which have a 1:1 team for designing your offer, everything is totally above board and you have total control over what you are selling so am looking forward to promoting an offer with them in the future :o)

  5. Michelle
    August 24, 2013 / 6:31 pm

    Go JD!!! As a customer I don’t like Groupon, so many offers, infact nearly all the offers I see are people trying to shift dodgy old stock or basic offers where you’re going to get the upsell from hell. Its no wonder decent businesses don’t have the best results when they’re bundled in with a load of durge.

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