If you ever have run a small to medium sized business, you have definitely had one of these calls:
“Hi, this is Nicole with Groupon. Do you know that we can get money in your pocket right now with a email campaign through us. I can show you how.”
Although they color in a great picture of what ‘could happen’, their entire goal is to sell you on their marketing portal regardless of the true cost to your business.
For example, Groupon can get you 100 people to buy your services at $19.95 a person, but at what cost? You have to mark down your service from $40 to get on the email showing at least 50% savings to the Groupon customer. THEN, Groupon takes half of the $19.95 as their fee, leaving you under $10 for a $40 service. (75% off!!!)
Groupon will then sell you on the “breakage” factor, (Up to 40% of the Groupon’s sold are not redeemed) and if they are redeemed beyond the Special dates the customer loses the rate but still has rights for 10 years to the paid value of the coupon.($19.95)
Finally, Groupon will say that this is an great way to get people to see your facility and they will come back and pay full rate next time.(They even figure one return per person in their sales pitch)
There are many other options to sell your services that don’t make you lose 75% of your rate!
I am sure that we all have met a person or two that uses Groupon often. As you probably have seen, they like to use their Groupon’s often and RARELY go back to the company without another Groupon in hand.
Groupon has created a market that only shops with their discount and rarely uses any service without one. In addition, many business are taking these coupons and losing at least 25%-50% on the visit and the not seeing return visits to recoup their losses. Many restaurants closed their doors because the Groupon virus kept them spiraling down to failure.
DO YOU KNOW THE BEST WAY TO AVOID THESE PITFALLS?
Hire one of the only Fiduciary Marketing groups around. Rockhold & Associates, Inc. puts your business first and makes sure that you are using your marketing budget in the most effective ways possible. We act as your guide for gaining profitable customers that will help you business grow. Give us a call today!