One of the usability issues i came across as a group-buying-virgin was having to go to different group discounting websites, which is a bit of a pain. But I came across DealsGuide, which aggregates all the daily deals and a great tool that saves time and effort :)
Enjoy!
Tuesday, December 28, 2010
Group Buying - Silver Bullet Marketing for New Business Owners?
In the beginning, I was getting quite annoyed with daily emails on so-called discount coupons flooding my inbox. But then my colleagues and friends started ranting and raving on the discounts, and then news hit of Groupon turning down Google takeover and currently being valued at US$7.8 billion.
Some of the visible players in the Australian market are Spreets, Scoopons, Living Social, Cudo and GrabOne
So I decided to take a quick look, and I must admit the revenue model is quite robust - in a nutshell, you only pay marketers when you get conversions. But eBay and Amazon also run under the same premise right? Yes and no. With the 'group buying' revenue model, what stands out is the simplicity by which bricks n mortar businesses can acquire buyers at virtually no risk, i.e. you only pay if the 'deal is on' or minimum number of buyers transact.
The only risk to the advertiser, in my opinion, is the perceived value of a highly discounted product - "People will think my product / service is actually worth a lot less than it's discounted to because it's highly discounted!"(weird logic) or "Perceived value of my product against my competitors may hit an all time low" or "People may thing we are desperate".
But with the omnipresent GFC and rising costs of living , this is a quick and easy way for any businesses to:
1. Not only get customers through your door, but make them spend.
2. Target local audience, and make them spend.
3. No initial outlay, only pay if you make money.
Particularly for new businesses, hungry to get the initial clients through the door, I cannot think of any other low risk, high volume advertising solution - just make sure these buyers are treated with utmost care and attention. Contrary to popular believe (and practice), I strongly feel customers that buy using discount vouchers can become the most loyal ones provided they are treated with exceptional service. Just think about it - not only are you buying a luxury item for peanuts, but exceptional service is thrown in too - think 'network effect'!
Only for Lifestyle Products and Services?
So far I've only seen discounts on offer for hotels, restaurants, beauty treatments, winery tours and the like - businesses that cater to the lifestyle needs and wants. Also, group discounts seem to circumnavigate around luxury items, which in my opinion works well with the aspirational target audience. I would, however, like to see other industry applications of this revenue model, say, Trades, Building & Construction, Automobile, etc. The question remains, though, for the marketers, how best to target audience during their research phase of their buying decision making process and whether medium to large corporations will be more prone to perceived value issues of their products being discounted.
Personally, I believe it should be used as an advertising module and not an end all to be all. For example, a large tool company may use group buying provider as soon as they introduce a new product into the market. Customers of this product should be treated as kings and queens, which would start a solid network effect and referrals would flow from this base.
All said and done...
I still have not made a purchase, sadly, but will probably get my first online group discount voucher today! Will let you know how it goes....
Some of the visible players in the Australian market are Spreets, Scoopons, Living Social, Cudo and GrabOne
So I decided to take a quick look, and I must admit the revenue model is quite robust - in a nutshell, you only pay marketers when you get conversions. But eBay and Amazon also run under the same premise right? Yes and no. With the 'group buying' revenue model, what stands out is the simplicity by which bricks n mortar businesses can acquire buyers at virtually no risk, i.e. you only pay if the 'deal is on' or minimum number of buyers transact.
The only risk to the advertiser, in my opinion, is the perceived value of a highly discounted product - "People will think my product / service is actually worth a lot less than it's discounted to because it's highly discounted!"(weird logic) or "Perceived value of my product against my competitors may hit an all time low" or "People may thing we are desperate".
But with the omnipresent GFC and rising costs of living , this is a quick and easy way for any businesses to:
1. Not only get customers through your door, but make them spend.
2. Target local audience, and make them spend.
3. No initial outlay, only pay if you make money.
Particularly for new businesses, hungry to get the initial clients through the door, I cannot think of any other low risk, high volume advertising solution - just make sure these buyers are treated with utmost care and attention. Contrary to popular believe (and practice), I strongly feel customers that buy using discount vouchers can become the most loyal ones provided they are treated with exceptional service. Just think about it - not only are you buying a luxury item for peanuts, but exceptional service is thrown in too - think 'network effect'!
Only for Lifestyle Products and Services?
So far I've only seen discounts on offer for hotels, restaurants, beauty treatments, winery tours and the like - businesses that cater to the lifestyle needs and wants. Also, group discounts seem to circumnavigate around luxury items, which in my opinion works well with the aspirational target audience. I would, however, like to see other industry applications of this revenue model, say, Trades, Building & Construction, Automobile, etc. The question remains, though, for the marketers, how best to target audience during their research phase of their buying decision making process and whether medium to large corporations will be more prone to perceived value issues of their products being discounted.
Personally, I believe it should be used as an advertising module and not an end all to be all. For example, a large tool company may use group buying provider as soon as they introduce a new product into the market. Customers of this product should be treated as kings and queens, which would start a solid network effect and referrals would flow from this base.
All said and done...
I still have not made a purchase, sadly, but will probably get my first online group discount voucher today! Will let you know how it goes....
Effective Online Marketing Strategy - Making Sense of Stats
I'd like to share what I've learned so far in (1) managing advertiser accounts, and (2) what businesses should request for online stats:
As an online marketing solutions provider, keep Stats (A) Simple, (B) Honest and (C) Highlight Emerging Trends:
As an online marketing solutions provider, keep Stats (A) Simple, (B) Honest and (C) Highlight Emerging Trends:
- Use histograms & frequency tables and show percentages rather than pageviews, unique visitors, hits, etc. on graphs.
- Report the pitfalls in addition to the successes as pitfalls themselves when analysed can show significant milestones, e.g.
"Your "glass wool insulation" product category performed the best over the last 60 days, resulting in 28 direct email inquiries from 954 page views - 3% conversion rate. Your "polyester foam insulation" product category had the lowest conversion rate at 0.5%, however, it steadily increased from 0.1% over the last 60 days to 0.5% making it one of the most improved product categories."
- Always suggest new ways of maximising online exposure and ROI - nothing stays stagnant in the online space, ever. e.g., (added bonus if they're done without spending more $$)
"Government legislation on residential insulation grants has negatively impacted general traffic that generally results in direct email enquiries from home-owning consumers. Over the same period, however, we have found an increasing number of traffic to our commercial insulation product category zone, particularly 'bulk buy'. If you see this trend at your end as well, I would like to suggest the following strategy to increase leads:
- Update banner copy to reflect insulation bulk buy.
- Update site to create dedicated bulk buy zone for your polyester foam insulation.
- Modify current ppc campaigns to drive relevant traffic."
As an advertiser, (A)Read Between the Lines, (B) Seek Citations & Knowledge and (C) Appreciate Honesty (but also be vigilant):
- Stats are most useful when they tell a story rather than finding, "I spend x amount of dollars on this campaign and I need to make x + y back to justify ROI, so have I done it?". Try to ask the following:
- How many unique visitors did my "Contact", "Distributor", "Reseller" pages get? - activity on this page indicates visitors are actively looking for a physical representation / phone number to call, and potential lead source.
- Have you followed up on email inquiries? A lead is a lead is lead is a lead..... I have clients that are so turned off by grammatical errors on product info requests that they completely ignore them! Then there are ones that complain about getting inquiries from areas that lay 5kms outside their service zones...and discard them right there and then!
"If someone has gone to the effort of providing their mobile number & address to request a quote or product info, you should immediately jump to the opportunity and call them up. Maybe they are willing to pay the extra service charge - simple demand economics theory suggests if you can provide your products/services at the level of price someone is willing to pay, then nobody loses out. This, of course means that the customer is able to pay for it, but how would you know if you don't follow up?"
- Are there any parallel marketing campaigns running that could have impacted each other? E.g. Own Adwords campaign and SEO initiatives to drive traffic to your website impacting traffic to your micro-site within a niche directory for the same keywords - consolidate your existing campaigns.
- When your online marketing solutions provider make sweeping remarks on industry trends, upstream traffic, keyword popularity, don't be afraid to ask for citations and in the process try to learn the general terminology. This is NOT rocket science, and always be weary of consultants / account managers that keep using the term 'complicated' when describing what they've done for you. Steer away from asking 'How' and towards 'Why' questions. Yes, there are companies that use ways to boost traffic to your site, so always ask why there are peaks and troughs. Things don't just happen, everything happens for a reason!
- Last, but not least, appreciate honesty. As consumers are rushing online, so are marketers together with businesses that want to emulate competitors and nab as many of those consumers as possible. It's an exciting world out there, however, the perceived value of 'moving offline to online' and so-called 'success stories' can be highly inflated. Not to mention the army of 'digital marketers', 'online specialists', 'PPC guns' and 'SEO gurus' at the beck and call of flashy agencies and advertising platforms. It can be a bit overwhelming and not very simple, so what do you do? Use your online advertising solutions provider as a you would use a marketing department within your company:
- Appreciate learning the confronting facts sooner rather than later.
- Treat your online marketer as your employee, hold them responsible and reward accordingly.
- BE OPEN to building relationships with them, e.g. invite them to product demos, seminars, training events and product launches - it's always a good sign if they take initiative and suggest how to get more bang for your buck!
- Always remember, with Social Media and Networking, people that sell to you can easily become your customers ;)
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