A few months back, a friend of mine sent me a link to coupon website called Groupon.com, a web-based coupon site that sends deeply discounted local daily deals directly to your e-mail. From coupons for restaurants to family activities, the site seems to offer something for everyone. The only catch for the consumer is that the site sets a minimum of how many people must buy the deal before it is active. And, in my experience involving this site, this requirement hasn’t proven to be that big of an issue.
The deal of the day that hooked me was 20 Bikram yoga classes for $25. Granted, yoga’s not for everyone, but to me it was an awesome deal. I saw value in spending the money and so I did. Since that time, I’ve become an avid follower of this coupon site.
During an economic time when money is especially tight for most all of us, coupon sites like this one are great for consumers. But, do they really work for the small businesses that use them as part of their marketing mix?
A recent article published in Business Week addresses this question head on. According to the article, sometimes it works too well.
Last October, when Philz Coffee offered users of the coupon website Groupon discounted gift cards for in-store pickup, Jacob Jaber, president of the San Francisco coffee chain, figured on a few hundred takers. He got more than 2,000. “I nowhere near projected the amount of people that showed up,” says Jaber. “We just weren’t prepared for it.” He ran out of cards, irritating customers, and says he’ll probably stick with word-of-mouth marketing from now on.
What concerns me most on Jaber’s situation is why a company would choose not to use a marketing tool that obviously worked for them – scratch that – worked remarkably well for them? Rather than throw up your arms and go back to employing old strategies that work only some of the time, I recommend learning from the experience, retooling expectations and trying again.
The point of running a business is to be successful at what you do. It’s always surprising to me when I see people quick to run the other way at the first sign of challenge. Every challenge is an opportunity that has yet to be discovered.
As for Groupon.com and other similar sites, they too are learning and retooling their service to better serve customers.
Megan Lane is an account executive for Imagine Marketing.
Contact Megan at email@example.com