An Open Letter to Current and Future Groupon Vendors
Posted by DeanShaw
Hi, it’s me. I’m the person you’re trying to entice to your salon, restaurant, resort, Zumba class, and Groupon is the tool you’re using to accomplish that. Makes sense, I mean it’s a win-win (win) right? I get a great deal on whatever it is you do. Groupon gets a cut for bringing us together. And you? Well, you get shafted. At least that what it seems like to me. If my math is correct you’re giving me your product or service in exchange for 25 cents on the dollar in the hopes of gaining me as a repeat customer. It’s the Wimpy Business Strategy – “I’ll gladly pay you Tuesday for a hamburger today”. There’s just one problem. I’m not coming back. There I said it, I. Am. Not. Coming. Back. Or, at the very least, I was already a customer and all you’ve done is given me a steep discount for something I had been paying full price for. In short I am a retail predator, preying on merchants who are willing to undercut themselves.
Harsh, I know, but I am divulging this information to so that you’ll understand how most of your “customers” view the deals they purchase through Groupon. In doing so I want you to reconsider your decision to buy into Groupon’s sales pitch or at least understand what you are getting into and devise a strategy to fully leverage your Groupon offer. So here a few unsolicited tips from someone who loves taking advantage of you.
1. Understand Your Business: Do you provide a service used infrequently? Are you a commodity business? Have you got limited resources? If so, then why are you even considering Groupon? Let’s look at an example. I recently purchased a Groupon to have my carpets steam-cleaned. This was the first time in 5 years I had done that and yes it was prompted by a great Groupon offer. By all accounts, the company that cleaned my carpets did a great job. They showed up at the appointed time, were friendly and polite, and got my carpets as clean as they have ever been.
So who won here? Certainly me, after all I paid only $49 for the service that might have cost me$100 otherwise. Groupon did well also, taking their usual 25% cut. How about the guy doing the work? I spoke with him afterward about Groupon and what he said stunned me. Because of the popularity of his offer, he was fully booked with Groupon redemptions though mid-June. It was February 18th. So, for 4 months he would be unable to take on any full-price customers and was working below cost in the meantime. But certainly, if he could struggle through then his business would flourish right? Well, I suppose except for the fact that I have no recollection of what his company’s name is or even his contact information. To me he was the “Carpet Cleaning Guy” just like a hundred other “Carpet Cleaning Guys” that exist in my area. His business is generic enough and his service infrequent enough that in 5 years when my carpets need steam-cleaning again there’ll be another sucker establishment offering his services at a low-low Groupon price.
LESSON: If you offer a generic service that is used infrequently you have no business even considering a Groupon offer, because predators like me will bleed you dry.
2. For God’s Sake Have a Strategy: Do you know that of all the “Daily Deal” offers I’ve redeemed I have never once been contacted after the redemption? It’s stoopifying to me that after giving away your service, you aren’t going to encourage me to become a repeat customer or at least take my contact info and use it for future communication.
So what exactly was your master plan? That I was going to beat a path to your door to pay full price? That’s not gonna happen. I got what I wanted. It’s your turn to decide what you want out of the arrangement. You’re at least going to have to follow-up with me (and probably dangle another offer in my face) if you want me to do business with you again. Remember I am a predator.
LESSON: Before you undertake any Groupon offer, (or any promotion) have a strategy for how you are going to leverage that promotion for your own good. At the very least, get my contact info AND for Crissakes pester me once in a while with some communication, offer, update, or newsletter.
3. Treat Me Like Gold: I am all too familiar with the icy stares I get from merchants when I utter the words “I have a Groupon”. Some merchants seem to have a disdain for those customers who dare take them up on their Groupon offers and reflect that in the service they provide. I know, I know, I already told you I am not coming back so why shouldn’t I get 2nd class citizen treatment. Well, there are a few reasons. First and foremost, despite what I have paid, I AM YOUR CUSTOMER, and I expect to be treated like any other one that walks through the door. It doesn’t matter to me what I paid and it shouldn’t matter to you. Secondly, just because I may not come back (and maybe I will) doesn’t mean I wouldn’t recommend you to someone else. And guess what, they might even pay full price. Finally, if you give an experience that is anything less than the one given full-priced customers, I will destroy you. Be it online or offline I will eagerly tell my circle about my dissatisfaction and Shazam! You’ve turned your Groupon campaign into a reputation crisis.
LESSON: You might see me as a low-margin, price sensitive, deal-monger. You’re right I am. But treat me like that and I’ll be a low-margin, price sensitive, deal-monger who’ll bad mouth you outta business.
4. Do not alienate your regular customers: At the end of the day it’s not Groupon predators like me that will keep you in business. It’s the customers you already have that keep coming back and pay retail for your products and service…because they genuinely like you. Whatever you do, do not restrict your current customers from taking advantage of your Groupon offer. Recently, a company offered a Groupon “for new customers only”. The response from existing customer was swift and clear. Existing customers felt unappreciated and taken for granted. Rather than launching a Groupon offer, the company had inadvertently launched a delicious online debate amongst existing customers about how much the company sucked for not appreciate and rewarding their regular customers. Ultimatley, the company relented and removed the Groupon restrictions, but not before creating ill-will with their “real” customers.
LESSON: Whatever you do, DO NOT fuck with your loyal customers. They are worth a gazillion times more than any Groupon customer. Embrace them, coddle them, make them feel so special they’ll spew goodwill about you wherever they go.
So there you go, a little insight about the painfully obvious. And best of all you didn’t need a Groupon.