I subscribed to livinsocial.com - in my opinion it's worthless, but that's another topic entirely. Here is today's deal for my area; a "detailing" facility: Link
I ran a similar deal through Sharing Spree which is a smaller version of these Groupon-type companies. Anyways, I took a gamble on heavily discounting my interior service in an attempt to get in front of new customers. These companies really like you to run a 50% or greater discount, or which they then take half. I was also hoping to be able to upsell each customer to make it more profitable. I ended up selling 99 interior deals, which completely blew me away! Getting in front of so many new customers is nice, but the upselling piece is difficult and I only convert about half into additional work. It will take more time to know if these customers liked the experience enough to become return customers. You are basically working for peanuts up front, with a fair number of customers adding additional work to their day of service. The hope is that it pays off in the long-term by exponentially speeding up your 'word of mouth' factor' and referrals. The jury is still out on that one for me.
you pretty much have to write off the lost income as advertising expense. It is amazing how much these places get to keep just for showing the special on their site. A local burger place did $20 certificate for $10 and sold out at 5,000 of them within about 7 hours. So groupon made $25,000 in that time.
groupon is a cash cow for the owners, or owner.............. it captures peoples desire to get cheap deals, ive read it hurts alot of business in the long run, but I dont see how. you just got "x" amount of people to walk through your door. As for doing it for detailing, it IMO feeds the ideal that detailing is cheap. Look at that guys prices, those are typical prices I see locally, not marked up, down or even on special. that is what the market is drvien by, cheap details, car wash hack jobs etc. Prices like that work if you have a few guys who can bust out 10 cars a day...... which is feasible, but not for a one man operation.
This article is applicable: Groupon Was “The Single Worst Decision I Have Ever Made As A Business Owner” June 9, 2011 by Rocky Agrawal
I'm a firm believer that I don't think Groupon is good for our economy and don't see myself running a deal or ever buying a deal on it. sure it might help some businesses in the short term but I don't think the "discount" fad is good for business in the long run. It lowers the true value of the product or service provided when now everybody is expecting to get a product for half off. How is the detailing industry any different from many other service businesses? I'm sure this topic could be debated on and on but thats just my (shortened) opinion.
i totally agree with your statement. lessening the value of a truly valuable product places a mark on you. i am a supervisor at an extremely well established clothing brand, in a outlet setting, people come in all the time and try to get additional percents off the already marked down products. sure the company still makes money, but the customer begins to think that the reduced price is the real price of the item and that spending over that is absurd. i will never buy from any group deal sites for that very reason.
I agree 100%, I don't use groupon and I think its a shame that small business have to take a "hit" to stay in business and compete against Walmart, or Target. I agree, discounts lower the true cost, or in some cases inflate it to give the "appearance" of a deal. The old "hide the pea" add age comes to mind. BUT Americans are cheap, and I have been guilty of it from time to time. We want it cheap, or at a discount even if its a "perceived" discount. My prices are what they are for a reason, you do not like them, go to a guy like the individual advertising on living social, yes it gets people in the front door, but does it create loyalty, or just a quick and dirty profit. While Groupon is a smoking deal for many, the costs as noted in some other post are absorbed by the business owner........which is sad. Many of us being small business owners should understand its not always in our best interest to jump on the latest fad when it comes marketing.
I believe Groupon works to an extent. It doesn't work for expensive or high end places, and most definitely doesn't work for merchandise. On the flip side it probably doesn't work for cheap or bargain places either. I've used a ton of Groupons and their derivatives so far, some for places that I already frequent, and others for new places that I would never have tried. I think, for a not very well known midrange restaurant Groupons are a good blessing for business. There are a few restaurants that I have marked for return business because they were great and I would dine in even without the discount. If also brings in lots of tips for the servers which indirectly affects the economy. On the other hand with a well known place, a Groupon is just going to discount your product or sales for people who are already frequent fliers. It does work, though only for a very narrow audience.
I agree, a very narrow audience and a very small range of products, like coffee, or food. But I still have my issues with the over all attitude of the the users. Many are coupon customers just looking to score a cheap deal, while some may actually become loyal its few and far between, now maybe that 1 or 2 customers that become loyal is worth it on some level. Its all context and who you talk too.
I really can't see the logic of this marketing strategy for detailing unless the business model is to eventually employ a number of low wage workers and to deliver a commodity product. It seems like the clientele these deals attract are likely to be bottom feeders valuing price above quality. I don't see much potential for building enduring relationships with customers willing to pay to for expertise, care and finesse. I'm tempted to launch into a tirade about the larger economy but this isn't the right venue. Short version: I think the U.S. public has been ill served by the economic decisions of both political parties and the Fed over at least the last twenty-five years.
Some very informative and insightful comments... IMO I don't see what is to be gained by underpricing a specilist service like detailing, it would be difficult to persude a Groupon customer to pay 50% more without a Groupon deal. It may work for volume detailer's, I would be interested to hear thier comments on this
Volume detailers are not what the majority of members here are. I'd say we are above the typical, even the newbies within us. We will see how long this, shall we say "fad", lasts. Though, there has been offline alternatives for the longest time ever. My girlfriend and I have been buying these things called Entertainment book full of coupons for everything for the longest time ever. they don't see to be hurting business, though also doesn't seem to be as large in scale and much more transparent for participating retailers.
One just popped up nearby me for house painting. Really want to see how its gonna turn out :applause2:
