Before running any marketing promotion, give some thought to who you’re attracting to your brand’s congregation. Are they the customers you want? Are they in it for the long haul?
These questions are particularly important with daily deal sites like Groupon, LivingSocial, and Google Offers. The sales windfall is tempting, but cautionary tales abound. One cafe owner recently described a Groupon promotion as “the single worst decision I have ever made“. Not only was it unprofitable and a bad fit for her business, it attracted mainly one-time deal hunters.
I learned that my last Groupon cartoon is now an appendix in the official Harvard Business School case on Groupon. Grouponomics is a hot topic. Yet deep discounting as a marketing strategy long predates Groupon. While 50-90% discounts are right for certain brands and business models, the daily deal mindset doesn’t drive loyalty. It trains customers to buy your brand on deal.
Rocky Agrawal shared the following insight in “Why I Want the Entire Daily Deals Business to Die“:
“For businesses, the notion that deep discounting is the way to acquire loyal customers is dangerous. Competing on price doesn’t get you love; delivering high quality products and services, engaging with your customers and creating unique experiences does. The best customers buy experiences, not price.”
Instead of rushing to “mark down”, think about how to “market up”. Create value rather than devalue. Instead of investing in a race to the bottom, invest in your brand’s experience.