What’s your Groupon Strategy?

Businesses are falling over themselves to get featured on Groupon and its clones.

Prague alone, a city of just over a million people, has a double-digits number of group buying deals sites. I’ve taken the opportunity to buy a number of deals myself from several different sites. The curse of the marketer is to evaluate every experience they have as a customer from the other side. So this is the “here’s how I’d do it” post.

A while back I wrote about the pros and cons of using group buying deals sites as a marketing tactic. Since then there was a very interesting first hand report by the owner of a cafe in Portland, Oregon about her experience running a Groupon promotion and how it nearly put them out of business.

Even if the site you’re looking at working with doesn’t take 50% (or 100% if the deal has a sticker price of less than $10 – yes seriously!!) as Groupon does, you’re looking at drastically reduced revenue, so you’d better do your sums and be trying damn hard to make the deal worth your while long term, because short term it’s very likely to be in the red. If you’re not sure, don’t jump into it because everyone else is, there are plenty of cautionary tales out there. Still set on it? Here’s my take on what a business should do when they run a Groupon…

Be smart about the deal

The last thing you want to do with a deal is lose money or damage your business’s long term viability by attracting bargain hunters that won’t come back or training customers to buy only when there’s a special. Think about what you could offer very carefully. Consider offering something that by its nature is likely to lead to return business. It might not even be part of your regular offering, it could be an introductory class if you teach something or provide a service, restaurants can make their deals exclusive of drinks (usually the highest profit area anyway), or for a special event (tasting evenings perhaps) rather than offer a discount that can be used anytime within three months. Retailers should consider long and hard what they’re offering – half off $50 worth of any goods means you’re left with $10 or so to pay for the product. The best option for retail would be to offer a single product or range of products which normally have enormous margins (maybe talk to the supplier about running the promotion), to make sure they cover their costs, and that they put into action the rest of these suggestions.

Before

  1. Do your sums. I know I’ve said that already but this is the fundamental ‘no money, no business’ part. If you’re losing money on every sale you’re not going to be in business for long. Work out how much you need to make extra from each customer. What extra products or services can you sell? Deals that can only be used one at a time, for a partial amount of a bill give you the best chance of making full ticket price revenue on the rest of the order. Most of all, don’t try and sell more than you can handle. If you’re a service provider (say a fitness instructor) don’t try and sell 3000 hours of your time for a tiny sum, you’ll end up resenting the customers.
  2. Keep it quiet (publicly) – you’re about to run an offer at a dramatically cheaper price, don’t damage your revenues in the days leading up to it by tipping anyone off.
  3. Tell your team. Make sure everyone who works for you is aware (but sworn to secrecy) of the impending deal. Explain the conditions so everyone is clear.
  4. Get a commitment from the site for how long the expired deal will be published for, at a well keyworded URL – but not including your business name. Make sure the links to your site on the page are not nofollowed and if possible, use valuable keywords, not ‘click here’ or ‘website’.
  5. If you can, find out if the site will let you follow up with buyers of the deal by email, and if you can identify redeemed and unredeemed deals.

On the day

  1. Tell your network – tweet it, post it on your Facebook wall, your blog and website. Consider emailing it to your list. You might think this contradicts point 2 above, and goes against the whole ‘group buying deals are about getting new customers’ line but as Joseph Jaffe teaches us in Flip The Funnel, your existing customers deserve to be treated at least as well as new customers. If you don’t tell your existing customers it’s like you’re hiding it from them. And hiding the truth is like lying, and lying is bad (see, I learnt everything I needed to know about marketing in kindergarten). Plus if you’re running this offer, you want it to ‘tip’ (become valid) and you want it to spread. Your existing customers are the most likely to share the deal with friends because they already know you.
  2. Be staffed well enough to handle the enquiries. Even if the deal doesn’t start till the next day, expect phone calls, emails and personal visits.

When the deal is being redeemed

  1. Schedule demand, if you can – if you’re a service provider, try and spread out the bookings so that you can be available for full-price paying clients.
  2. Stand by the conditions, but don’t be a stickler – in the story of the cafe owner, she was prompted to write the blog post to tell her story because she refused a longtime customer’s Groupon because it had expired. It would take a really understanding customer not to feel mistreated. Most customers aren’t. Saying ‘we have to stick by the rules because other people took advantage’ doesn’t cut it. The cafe had received the money (what little there was) from that customer’s Groupon, expired or not.
  3. Get something out of the interaction – assuming most of the buyers of the deal are new to your business, take the opportunity to grow your email list (tag it if you can, that information is going to be useful), Twitter followers or likes on Facebook. Print up some fliers to hand people when they present their deal coupon – taking a ‘what next’ approach. Suggest places they can write reviews, or connect with you further. Consider that these are value-conscious consumers and for many any loyalty they have is to the deal site, but if there’s something you can do to capture future business, now’s your chance. Have a loyalty programme? Tell them about it. High-tech with plastic cards? Give them a form to fill. Low-tech with paper cards and stamps for each visit? Hand them their card with the first stamp on.

After the deal has expired

  1. Go for the final squeeze – if you segmented your mailing list with new signups from the deal now is a perfect time to go for a final squeeze – what action would you like these people to take? Remember this group aren’t quite like your organically grown list of existing customers, so tailor the ask to that. If the deal site allow it, write to deal buyers through them.
  2. Measure – if you planned well, you had metrics that you would judge against. Now’s the time to do that – take the scores for whatever you were pushing for – revenue? Facebook likes? Email signups? Repeat visits?
  3. Evaluate – take the numbers from the last step – did it make sense for you to do it? What could have been done better? What did you learn? Would you do it again?

I’m pretty sure I’ve missed several nuances. If you agree, let me know in the comments.

Update: If you want to run the numbers, I recommend downloading the Groupon profitability spreadsheet helpfully prepared by Rags Srinivasan.

Image credit: NCReedPlayer

Banding Together

Is your local retail business going well? Some of your (not ‘really competing’) neighbours doing worse?

I wrote a piece last year about why you might want to help out those who you might consider competitors. I’ve just seen first hand what can happen when a company’s neighbour goes out of business: a much more serious competitor can move in.

My local sandwich shop, a small independently owned business has been serving baguettes, salads and paninis for over 5 years. Later this month a sandwich-shop chain is opening up in place of a cafe, just three doors away. They should have them beaten on price, unless the new shop gets aggressive and goes after their loyal customer base of office workers from around the area. As it stands they’ll attract business just on the basis of curiosity.

Now is the time for the little guy to raise their game, whether they broaden the menu, encourage loyalty (the chain already has a loyalty discount card) and raise their service level: offer delivery, take pre-orders – all the things the chain isn’t willing to do.

If that situation sounds familiar to you, now might be a good time to reach out to them and work on some co-marketing efforts – banding together to ward off a bigger threat.

Image credit: Chiceaux via Creative Commons on Flickr

Local listings for local people

The what, why and how of getting in the Google Local search results

Now Google are beefing up the importance of ‘local’ worldwide it’s time get serious about your listing.

Go to google.com and do a search for your business type, e.g. ‘Tackle shop’. Are you getting the ‘Local 10 pack’ (see image below)?  If you’re not getting amongst local results at the top of the page, try it with a ‘geographic modifier’ – the name of your town/city.

A local 10 pack
A local 10 pack

If you are seeing local results then Google deems those keywords indicative of a business that people are interested in local listings for and that they have results available for. Did you come up in those listings? If yes, you may still need to ‘claim your listing’ if you weren’t the person that entered it into Google Local Business Center – jump to the ‘claiming your listing’ section below. If your business doesn’t come up, search for your business name ‘Fred’s Tackle’ along with the name of your town: ‘Fred’s Tackle Brighton’ should do. If that finds you, and displays your details along with a map, then you may still need to claim your listing (and you clearly have other work to do too in optimising for keywords!)

Entering your Google Local listing, or claiming an existing one

  1. If you have a Google account, log in, if you don’t, create one – you can use your existing email address for your Google account, or set up a Gmail address.
  2. Go to Google Local Business Center and click on add new listing.
  3. Enter the details, reposition the map marker if necessary paying attention to entering a well worded description. If an existing entry exists with similar details you will be shown that and will have the option to claim that listing instead of adding a new one.
  4. Submit the details. You will now need to verify the information you have given, this is done in one of three ways
  • Google will call the number you entered as the contact number using an automated system you type in the PIN number you’re given on-screen
  • Google send an SMS to the contact number and you reply to that
  • Google send you a post card by regular mail – this takes ages and is best avoided.

Once you have verified, within a day or so your listing will start showing up.

Why claiming your listing is important

If your business is already showing up on a Google local search, but you didn’t put it there you should claim your listing. You don’t want your listing to be hijacked!

To claim a listing, look for the ‘Edit’ link. You should now see a link to ‘Claim your business’. Claiming your business is in fact the same

Flesh it out

Once you’ve got (or got control of) your listing you can upload images and link to Youtube videos – getting you further .

Give it a day or so and you should show up for those searches. If no map comes up now when you searched for your keywords, or a company name then Google probably doesn’t view your keywords to be a sufficient local trigger but you’ve not hurt your chances of coming up for relevant searches at all and if they change their minds, you’re ready for it.

Tips for success

Enter your details in as many local directory type sites as you can find, especially the free ones – Google considers these ‘citations’ – the more you have, theoretically the more relevant you are.

Keep your data consistent – address/phone number/web site across all the local directories you’re listed in – this makes Google’s life easier linking up those citations.

Encourage your happy customers to write reviews on any directory sites your business is listed on (don’t write them yourself, that’s just not playing fair!), or directly on Google itself.