Wednesday, May 22, 2013
Here are snippets from a few people who wrote in to answer our open call for expertise on collective buying:
• Nigel Swaby, who owns a Salt Lake City consulting business: "A Groupon-type offer needs to be thought of as marketing, not sales. The value in the offer for the business is reaching new customers. I advise business owners to collect e-mail addresses from customers ... When the coupon is redeemed, treat that customer like gold and give them another coupon ... not as much ... to encourage repeat visits. For restaurants, people have a tendency to order more when they're getting a discount. That will come in increased drinks, desserts or appetizers, which tend to have higher profit margins."
• Carol Roth, author of the New York Times bestselling book, The Entrepreneur Equation: "Many of the customers using Groupon and Living Social are price-focused customers. These are not the customers your business wants. You never want to compete on price, always on value. Someone can always undercut you on price, and price-focused customers are fickle. You are better off focusing on your loyal customers, having them come back more often and being incentivized to tell their friends or even bring them with."
• Janna Hoiberg, a Colorado Springs-based business coach: "For some businesses these sites are extremely effective, however, it is up to the business to make it [effective]. If you wait to have the business walking in the door to figure out how to get them to return, then it is too late ... What is the lifetime value of a client? What is their normal acquisition cost for a new client? Who is their ideal client? Those and other questions help to formulate a grounded marketing plan that make the business profitable."
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UPDATED: Collective buying in question
What others in the national media are saying about deal sites.
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Deal-a-meal
Groupon and LivingSocial work for consumers, but our local restaurants offer mixed reviews
- Jun 16, 2011
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Likes and dislikes
Other eateries sound off on their forays into collective buying.
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Long story short
The story with collective buying goes well beyond today's daily offerings from Groupon or LivingSocial.
- Jun 16, 2011
