Deal of the day websites are becoming extremely popular in South Africa and are opening up new brand awareness marketing opportunities for SA brands. More and more of our clients are asking about this option, so here are some of the essential points you should know when marketing with Groupon and other deal of the day websites.
Marketing with Groupon – A Case Study
One of our clients, The Chocolate Tier, a thriving chocolate business, was recently approached by Groupon and ran what would be considered a very successful campaign with them. However, the learning curve was steep.
Kate, the owner, very kindly shared a few of her pitfalls with us and we discovered that while many businesses are keen on the idea of a Groupon or other deal of the day marketing, they are completely unprepared for the outcome. Here are the things you should know before taking on a deal of the day campaign.
5 Tips for Marketing with Groupon
1. Deal of the day sites are not for everyone
Consider your product and service offering carefully before approaching any of these sites.
Many deal of the day companies require up to a 60% discount and then take up to 45% of your turnover from the deal. You need to consider whether you can take this kind of revenue “hit”.
2. Limit you offering
There is no point in selling 1500 Chocolate Tastings in 12 hours if you can’t provide 1500 Chocolate Tastings.
What happens if you are a small beauty salon with 3 therapists, and your product is essentially time? If you have to service 1500 vouchers, it will take you 12.5 weeks of back-to-back appointments utilising all of your therapists. This means you are earning less than you should for these 12.5 weeks because you are left with no time for full-paying clients. You could put yourself out of business.
Make sure you are working with a deal of the day brand that allows you to limit the number of vouchers you sell.
3. The deals must work around your time, not the customers’
This applies mostly to service offerings and boils down to planning. You need to ensure that voucher clients are not taking away from your existing revenue-generating business. Clearly state in your terms and conditions that there are particular times available.
For example, if your beauty salon is normally closed on a Sunday and Monday then those are particularly good days to be selling “your deal”. Alternatively stay open an hour longer every weekday.
Remember, terms and conditions apply to everything. You will always have people who will complain about not being able to come when they want to, but stand firm – if they really want your product they will make a plan.
4. Planning, planning and more planning
You need to be prepared to structure your bookings long before the deal goes live. People will start booking immediately so plan your hours / days, ensure your entire team is briefed properly, and have specific calendar or system in place that will allow you to track voucher numbers properly.
5. Think long term
YES, the majority of all people who purchase a voucher from a deal of the day website are just looking for a deal. But those people talk and word of mouth can be a powerful brand awareness tool.
In the end, you may not see the return immediately, but you will see it.
Remember: this is a marketing initiative and should therefore market your business not damage it. Deal of the Day sites will boost your brand loudly and quickly; if you are prepared it will do great things for your company, but being unprepared can leave your business floundering.
Kate’s story – in short:
- The Chocolate Tier (www.thechocolatetier.co.za) developed a product specifically for Groupon – A Chocolate and Champagne Tasting. This helped with tracking the deals sold through the offer.
- They sold 1500 vouchers before they got Groupon to cap the deal.
- The voucher went out in 2012. Kate is still running tastings to service those vouchers.
- After the first two tastings, they restructured the event to prevent running at a significant loss.
- Out of roughly 1300 people that have attended the events, there has only been one complaint to date. This was because the party arrived late and the tasting was already over.
Kate is thrilled with the outcome of her Groupon ad; she believes word-of-mouth and brand awareness have benefited her business hugely. We are very grateful that she shared her story so we could learn from hers. Thanks Kate!
Deal of the Day Marketing Sites
Some sites worth looking into if you want to consider deal of the day marketing: