I think this one is worth printing out and circulating, or emailing to everyone on your customer list. (Bad link - removed 3/4/24)
Very interesting, Chris. Thanks for posting. Groupon just moved into our nearest metro market (Amarillo), and I subscribed to their daily emails to keep an eye on who's using it. No one in our town is yet, but that can change. This will be a good article to send to my clients.
I also noticed near the end of the post, the writer says she "would never pay more than $100 for advertising, much less $8,000, because I don’t believe that regular advertising had much return on investment at all". I hope someone there is able to change her mind on that assumption!
Chris,
Glad you found and shared this post - thanks!
The bakery owner's unfortunate experience reinforces my lack of enthusiasm for these kinds of promotions as "marketing tools" for small business. Posie's lost $8000 on their Groupon gambit—an expensive education!—but as bad as that was, it could have been worse. They've done many small businesspeople a favor by sharing their experience.
I'll not only pass this on but I think I'll try to contact businesses who've agreed to Groupon offers (up in Spokane mainly, not so much down here...yet) and find out what their experience has been. Like Don, I, too signed up just to see who's using them.
Thanks again for the article!
-Rod
Amanda:
We do a thing called HalfBuckCafe.com. But unlike Groupon: 1) The people on this control how many of everything goes on the site and 2) We PAY for the coupons with advertising.
Chris, we also run a similar promo, Half Price Tuesdays. We cap it at $2500. So retailer gives you 25-$100 gift certs (the cap is $2500), the station sells it out that gives the retailer $1250 in credits to be used for their own brand sell ads at a later date.
We run the offer on all three of our radio stations with considerable promo and liners driving listeners to the website to buy the gift certs.
For the retailer they recieve the promotion and then the credit they have amassed. Works really well for most but we have to be particular who we let participate.
Chris I would love to hear how you run yours.
ooops.... those of you that sell advertising might want to carefully read this entire article before sending it to any of your clients.....yes it blast's Groupon....HOWEVER the business owner writing this also makes the following statement...this is a direct quote: "I would never pay more than $100 for advertising, much less $8,000, because I don’t believe that regular advertising had much return on investment at all."
Whoa there ! First of all, I don't think it is a good idea to circulate slams about other advertising methods. [PERIOD], secondly certainly not with something in the body that says an "ignorant" (in my opinion) business owner doesn't believe "regular advertising had much return on investment at all".....REALLY !......
David:
You make a good point. But I like to HIGHLIGHT my bad points.
I have done many presentations where I lead with the biggest objection.... "I know as a tire dealer you face many Price and Item shoppers, and radio CANNOT compete with newspaper or shoppers in this realm. I suggest if you want to advertise all of your tires and prices, that a grid ad in either of those would work.... but now lets talk imaging..."
What I LIKE about showing this piece is it shows... in my opinion.... the mentality of a person who will be sucked into a Groupon pitch. Basically a person would not spend $100 on advertising. This is not unlike where I have diverged from the RAB for decades... The RAB wants to point out that Newspaper Circulation is declining, and noted scores on full page ads are only 41% and cost per thousand is up. Well let me translate that for you to what the customer hears... "You bought newspaper? Boy are YOU a moron!".
Here's a news flash.. Newspaper advertising WORKS. Yellow Pages WORKS. Direct Mail WORKS. Billboards WORK. TV WORKS. Cable WORKS. They all work, just differently. Here is another news flash.. Radio DOESN'T WORK... when you run an ad with the words "family owned and operated since 1946 with plenty of free parking, the freshest and finest ingredients and lower overhead so we pass the savings on to you", one time a day in a fixed position and the copy is not changed more than every 30-60 or 90 days!!! (By the way... the newspaper has a column inch price, but you cannot BUY one column inch in a day. Why do we sell ads one by one instead of in eights?)
Want to succeed? Lead with your warts, and build up the competition.
Now, that's my opinion, and I could be wrong.
Tony:
I give the retailer 100% credit, and I take the 50% I get. I also give away tickets to concerts and what not on the site, rather than much up the air. When we have tickets to give away, we simply drop in a liner for them.
I agree that you MUST control the mix. But in general there is something for everyone and someone for everything! Doesn't matter to me how long it sits on there till the two meet.
Last thing... gotta make sure that everyone understands that as soon as you trade for merchandise, it is YOURS to do with as you please. That way no hard feelings.
