In my previous blog post, I told you my personal story of the natural human behavior to hunt for a bargain.

Bargains are a powerful customer magnet, but may cause a heart attack for the business owner, if not done correctly.

Groupon has capitalized on that psychology, BIG TIME!

After all, they were at one point (and probably still is) the fastest growing company EVER. Period. Yes – faster than Amazon, or Google or Microsoft. (Although, I don’t know how it stacks up against Apple’s recent growth spurt.)

Groupon makes it convenient for the small business owner  to transition from the printed medium to an electronic format. Then they added a unique twist: leveraging the herd mentality.

People find comfort in numbers. When they see other people behaving a certain way, the immediate impression is: “Hey, don’t forget about me. I wanna get in, too.” In other words, the wannabee syndrome.

So if you haven’t even thought about Groupon for your business, you’re missing BIG TIME!

6 Coupon Mistakes To Avoid

However, if you’re ready to jump into the bandwagon either for the 1st time or the 99th time, here are 6 mistakes to avoid in the coupon craze.

1. Not offering any coupon at all

It’s basic human nature to gravitate towards a deal. It doesn’t matter whether it’s a free consultation, a free refill, or a $1 sweepstakes for a brand new house. When you make an offer, you automatically touch your prospects’ subconscious hot buttons.

The only reason NOT to do this, is when customers are lined up in front of the door, and you DO NOT want any more new business.

2. Not tracking coupon results

Tracking can be as simple as counting how many coupons were redeemed. I advise my clients at least 2 things:

  • Dig down to the bottomline: return on investment. Understand the specific costs and revenues generated by the campaign.
  • Experiment with at least 2 different offers at any time, and statistically determine which one brings in more feet inside your door.

3. Not using social media

Social media marketing is the electronic version of word-of-mouth marketing - the most effective method to attract new clients.


Social media is the perfect marketing channel for the herd mentality. The more people see other people patronizing a business, the more confidence they build, to try it out themselves, for the first time.

Furthermore, that confidence is turbo-boosted when they see their friends (or even acquaintances), among the crowd of patrons.

This is what makes the night and day difference between printed coupons from the postal mailbox vs. the coupons that are circulating online. Twitter followers see their Facebook friends, and Google Circles buying these coupons.

Note: Don’t forget about other platforms, like Yelp, UrbanSpoon, OpenTable or even LinkedIn.

4. Not obtaining customer contact information

In my opinion, this is the biggest mistake that biz owners make when they use Groupon.

The whole point of a coupon is to attract new people with a magnetic offer – and then hope that they will come back again, ready to pay full price.

How do you get customers back? I don’t recommend that you leave this to chance. Owners should have a proactive strategy.

Are you going to hypnotize them with your charming personality during their first visit? Well, you better!

But that’s just the beginning. You need to capture their contact information and later gently remind them occasionally, of how truly charming you are.

There are a few options for contact info: Facebook fan, Twitter follower, email, home address or mobile phone (for text messaging).

5. Not following up

This is the whole point of point #4 above; so capitalize on that valuable contact you just obtained.

Here is a common concern I hear a lot from biz owners: spamming their customers.

Technically, spam is an unsolicited offer. Obtaining contact information in Step 4 above is implied permission, but it’s always best to tell your customers what you intend to do with the information.

Psychologically, spam is in the eyes of the beholder. If you have an unattractive offer, you are perceived as spam, even though the customer explicitly grants permission.

On the other hand, an irresistible offer is always welcomed with OPEN ARMS, even among strangers that you have truly spammed.

Here’s the secret: people want to buy, but they do not want to be sold to.

There’s an art in making an offer, and there’s a science to making it effective.

6. Not taking ownership of the coupon campaign

Groupon is a great way to jumpstart your online adventures, but I wouldn’t recommend that you rely on them forever. 75% is expensive!

Ideally, a biz owner should plan on running their own in-house electronic coupons.

Realistically, I understand that most owners do not have the time to manage these campaigns. This is where automation tools and 3rd party consultants (like myself :) ), can help the overwhelmed owner, to strike a balance, and control their own business destiny.

Conclusion

Just do it, before your competition does. If they get an early lead on you, it’s like starting the race with an uphill climb.

Today is always the best day to get started.

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Throwing Away $500 Monthly or Saving $100?

by ProfitEngineer on September 1, 2011

Do you know anyone still using this? Seriously?

I just got off the phone talking to a potential client.

He was the first one to admit that he’s been throwing away $500 monthly on advertising costs for the phone book. He realizes that new business leads have been steadily dwindling not only from the phone directory, but also from the traditional newspapers, and even radio.

He wants to take his business to the next level, but he didn’t know how to start. Actually, he thought that reviving his website might be the way to go, and that’s why he wanted to talk to me in the first place.

However, the reality is that in today’s ever-changing world, the website may no longer be the marketing hub for the small business owner. Depending on their target audience, it’s more likely to be Google Places and/or Facebook.

Here’s a case in point.

I was with my wife shopping, and she was looking for a quality pair of walking shoes in the Spokane Valley. I’m not going to disclose the name of the store, but we’ve decided to get a pair of Merrell shoes. It was quite expensive, but we both agreed that it’s worth it at $90 retail.

However, at the back of my mind, I was thinking that there must be a seller out there who’s willing to give us a discount; even 10% would be worth it.

So I pulled up my Android smartphone, and fired up the Google maps application. I entered “Merrell shoes” in the search box … and wallah!

A store’s name came up, and it was within a mile from where we were. Their phone number was already there, so I simply clicked and within a few seconds I was talking to a salesperson. I gave the specific shoe model, color and size that my wife wanted.

She said, “Yes, we do have it, and it’s actually on sale for $45. Would you like me to hold it for you?”

HOLD IT FOR ME!!!!!????? For $45!!!??? I was just about to pay full price for that exact one.

Well, I tried to contain my excitement, and played a little bit hard to get :) .  I asked the lady what time they were going to close, and simply said that we’ll be there before the end of the day.

To make a long story short, we got there (within 5 minutes), and my wife saved $45 – thanks to Google’s Android.

Maybe if you look closely enough, you might see the $55 discounted price.

But that’s not the end of the story.

A pair of men’s Merrells caught my eye. To my amazement, it was also 50% off at $55.

In the end, I ended up also buying the shoes for myself, and together, my wife and I saved $100 within a span of 30 minutes. That’s the kind of shopping I get excited about!

Needless to say, the store was also very happy about it.

This story may not be mainstream YET here in Spokane. But you know it’s coming.

Actually, it’s more likely to be the norm today for bigger cities like Seattle or San Francisco.

Are you there yet?

 

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