I’m Tired of One Night Stands
February 21, 2011 by admin · 6 Comments
At the risk of mixing metaphors, Luke Hohmann recently described Groupon, Living Social and other daily deal sites as enticing businesses into one night stands. At first I laughed but as I thought about my direct experiences with a plethora of group buying sites, I think he may be right. There is no doubt that these daily deal sites can deliver a deluge of coupon-grubbing customers to a small, local business’s door step. But at what cost? Negative margin, stretching service delivery to breaking point, alienation of regular loyal customers, attracting customers who don’t spend more than the deal amount and won’t ever come back are some of the well documented potential pitfalls. (And hopefully not STD’s!)
I often describe Groupon, Living Social and other daily deal sites as providing small businesses a large, fishing drift net to cast broadly into the ocean; the result is you will no doubt collect a lot of sea life, but only some of which will be the targeted species you are actually fishing for. Luke’s metaphor is certainly more colorful and may, in fact, be truer than mine.
Daily Deals | 3 Tips for Small Businesses
August 16, 2010 by admin · 5 Comments
After experimenting with Groupon late last year and blogging about Savvy Cellar’s experience, I was immediately inundated with comments and questions from small businesses all over the world. Since that time, we have seen the “Daily Deal” space grow with such fervor and frothiness that I can’t help but imagine it is heading towards an inevitable meltdown (or at least significant contraction of the numbers of competitors playing in this space). Simple consumer logic dictates that one can only view and consume so many coupons on a daily basis . . but who knows.
I was recently interviewed by MSN Business on Main writer Barbara Schenck in her article “Daily Deals Propel Coupons to New Heights“. Barbara pressed me to provide practical advice to small business owners as to how they should approach this emergent form of marketing. It got me thinking . . are there best practices that small businesses could follow? Read more
Game On With Groupon
December 3, 2009 by admin · 26 Comments
As co-owner of Savvy Cellar Wine Bar & Wine Shop, I get to experiment with promotional services that are designed to help local businesses. Over the course of several years we’ve tried (no particular order): Google Adwords, Yahoo! Local, MerchantCircle, Local Newspapers, Local Magazines, Email, Twitter, Facebook, FourSquare, Peninsula Shops, Movie Theater Advertising, Rumbafish and now Groupon.
Groupon is an online coupon site. It is organized by major metro markets in the US. Each day they feature something unique to do in the local market (restaurants, spas, entertainment, etc.) at a special “group” price. There is a minimum level set for each offer – meaning that a certain # of people have to sign up for the daily groupon in order for everyone to get it. This drives sharing among friends on social networks. If enough people opt to take the offer, then the offer is “on”. At the end of the day, everyone who took the offer is charged. Then Groupon takes their cut 40-60% and pays the merchant the balance.
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