I just read about a new mobile advertising group called ThinkNear that will promote flash deals similar to Groupon and Living Social are beginning to do. There are two main differences with ThinkNear is that ThinkNear will inform cell phone users about deals through mobile ad networks and only during times when there is a need to attract customers to your business. And the deals will change depending on how busy you are. Watch the Youtube Commercial and let us know what you think of this idea for your business.
Showing posts with label coupons. Show all posts
Showing posts with label coupons. Show all posts
Tuesday, April 19, 2011
Friday, January 28, 2011
A Week of Coupons #4
It's not a Daily Deal - it's a never ending discount. What is it?
This is a perfect example of a discount that can sometimes last too long. Restaurant.com can be a great site to advertise for some restaurants, but not everyone can benefit from this kind of coupon. This is a coupon that has a long-term affect on a restaurants brand name because the contract is for one year. That means you can't control the distribution of this coupon and in the end it becomes more than a coupon - it becomes an expected discount to your business.
So where should you advertise a coupon? There are hundreds of places. Type "coupon" into your favorite search engine and you'll find dozens of places on the first page alone.
You can also advertise coupons in your local newspaper, a direct mail piece, a well-placed bulletin, in a Val-Pak or other, similar places.
What we recommend is a mix. Develop a coupon with a sensible expiration date, a reasonable discount and find a few places for distribution. Make sure you include an online site, or promote it on your Facebook or Twitter pages, and look into a direct mail option.
If you do decide to use an online site like Groupon or Living Social, just make sure you're ready for the increase in customers!
This is a perfect example of a discount that can sometimes last too long. Restaurant.com can be a great site to advertise for some restaurants, but not everyone can benefit from this kind of coupon. This is a coupon that has a long-term affect on a restaurants brand name because the contract is for one year. That means you can't control the distribution of this coupon and in the end it becomes more than a coupon - it becomes an expected discount to your business.
So where should you advertise a coupon? There are hundreds of places. Type "coupon" into your favorite search engine and you'll find dozens of places on the first page alone.
You can also advertise coupons in your local newspaper, a direct mail piece, a well-placed bulletin, in a Val-Pak or other, similar places.
What we recommend is a mix. Develop a coupon with a sensible expiration date, a reasonable discount and find a few places for distribution. Make sure you include an online site, or promote it on your Facebook or Twitter pages, and look into a direct mail option.
If you do decide to use an online site like Groupon or Living Social, just make sure you're ready for the increase in customers!
Tuesday, January 25, 2011
A Week of Coupons #2
Your daily coupon comes to you from - well... it's your choice. Groupon? Living Social? Or maybe Google's new Daily Deal.
After discussing the need to have expiration dates for your coupons, I wanted to expand to online coupons that appear for one day only. This shouldn't be confused with an expiration date because having an offer that only appears for one day still carries a separate expiration date.
All of these daily deals offer your business a great opportunity - although, it must be stated that there are a few things to consider. The first consideration to remember is that this is a form of advertising. Advertising costs money.
When you use a daily deal service you end up losing about 75% of your normal price. Here is how it works.
You offer a product or service at half off. So your $20 widget is now $10 on the daily deal site. You've lost 50% right there.
When each purchase is made for your widget, $5 goes to you and $5 goes to the daily deal site. That leaves you with 25% for every widget. I don't know about you, but most businesses don't have that much room in their profit margin for that kind of loss.
What the daily deal sites offer are an amazing opportunity to advertise your business to a large group of people who will be excited to try out your business. This also means that when those people visit your business, they will be more likely to come back or tell their friends about your business. This is good news for you!
Just make sure, if you opt to participate in one of these deals, that your business is prepared to handle the increase in traffic!
All of these daily deals offer your business a great opportunity - although, it must be stated that there are a few things to consider. The first consideration to remember is that this is a form of advertising. Advertising costs money.
When you use a daily deal service you end up losing about 75% of your normal price. Here is how it works.
You offer a product or service at half off. So your $20 widget is now $10 on the daily deal site. You've lost 50% right there.
When each purchase is made for your widget, $5 goes to you and $5 goes to the daily deal site. That leaves you with 25% for every widget. I don't know about you, but most businesses don't have that much room in their profit margin for that kind of loss.
What the daily deal sites offer are an amazing opportunity to advertise your business to a large group of people who will be excited to try out your business. This also means that when those people visit your business, they will be more likely to come back or tell their friends about your business. This is good news for you!
Just make sure, if you opt to participate in one of these deals, that your business is prepared to handle the increase in traffic!
Monday, January 24, 2011
The Week of Coupons #1
I picked up my newspaper a few weeks ago and was very happy to see my local, favorite pizza place had a coupon! They just opened a few months ago and coupons were non-existent.
I hung the coupon on the refrigerator and thought, "We'll just use that later this week."
- Later in the Week-
I grabbed the coupon and picked up the phone to order a pizza, only to look closer and find that the coupon expired the same day it came out. So the coupon came out on Sunday and expired on the same Sunday.
I was pissed. I ordered Chinese instead.
Coupon Lesson #1
If you are going to spend the money to have a coupon run in your local newspaper, make sure the coupon has a reasonable expiration date.
A "reasonable expiration date" is defined as a date that accommodates the customer, doesn't end too soon for them to use the coupon, but does have an end date in the near future. Generally, two to three months is a good time period for an expiration date. If you don't add an expiration date, you'll have customers walk through your doors two years later with a coupon that you have can no longer honor. This is just as bad as having a ridiculously short expiration date.
I hung the coupon on the refrigerator and thought, "We'll just use that later this week."
- Later in the Week-
I grabbed the coupon and picked up the phone to order a pizza, only to look closer and find that the coupon expired the same day it came out. So the coupon came out on Sunday and expired on the same Sunday.
I was pissed. I ordered Chinese instead.
Coupon Lesson #1
If you are going to spend the money to have a coupon run in your local newspaper, make sure the coupon has a reasonable expiration date.
A "reasonable expiration date" is defined as a date that accommodates the customer, doesn't end too soon for them to use the coupon, but does have an end date in the near future. Generally, two to three months is a good time period for an expiration date. If you don't add an expiration date, you'll have customers walk through your doors two years later with a coupon that you have can no longer honor. This is just as bad as having a ridiculously short expiration date.
Friday, January 7, 2011
Coupons, Discounts and Promotions - The Five Questions You Should Ask
Coupons, Discounts and Promotions - Questions
Do I need to run a coupon, discount or promotion?
- Example – Jeffrey’s Restaurant and Bar, in Austin, TX, had been in business for 35 years. While the business was relatively stable, the owner, Ron Weiss, was starting to see a decline in sales. In 35 years of being in business the restaurant had never once issued a coupon or discount. Ron decided to take a chance and offered a Groupon deal. The deal was a one-time discount of $35 for $75 in gift certificates for the restaurant. The coupon was good for 90 days, during the restaurant’s slower time of the year. The restaurant takes half of the Groupon sales and Groupon takes the other half. Ron and his staff stayed unbelievably busy over the next 90 days and while he didn’t make money on the offer, he did gain a lot of new customers. (MP Mueller, NYPost.com, “Is Groupon Good for Small Business?)
How will this affect my business or brand?
- Example – PearlParadise.com owner, Jeremy Shepherd saw that sales were declining as the economy worsened. Sales of his pearly jewelry, above $1,000, were usually his major source of revenue and if sales continued to be off through his December busy time his company would be in trouble. After examining sales charts, Jeremy saw that jewelry under the $1,000 was still selling well. So Jeremy decided to discount his strands of Tahitian Pearls from $700 to $300, calling the jewelry line, “Luxury For Less.” By offering only one line of pearls at a discount price, Jeremy was able to keep his main brand from looking like a discount jewelry store, but still increasing sales for his company. (Ryan McCarthy, Inc., “How Low Can You Really Go?”)
Can my business afford this?
-Example – It is important to ensure that your business can not only handle the influx of customers who will come in during the promotional time period, it is also important to accurately calculate whether this is a cost you can afford. In order to calculate this you must first know the following: the cost of your goods or services, an estimated purchased amount for each coupon, discount or promotions customer, an estimate of the quantity that will be redeemed (this is more of a guess – to be safe, estimate an 80% redemption rate for coupons), the approximate number of return customers or new customers who come in after the coupon (figure about 10%), the cost to run this coupon and the percentage of existing customers (assume 40% for this example).
For instance say you sell widgets for $40. It costs you $25 to make this widget. So you make $15 on each widget. You run a coupon for 50% off your widgets. The coupon costs you $1,500 to run and you send 3,000 of them out.
So you get about 2,400 coupon redemptions and each customer buys your widget for $20. You don’t make any money on these sales, but you do break even. You then calculate that 60 of the customers who used the coupon were new to your business and likely to tell a friend. That is 1,440 new customers and if 10% tell a friend you’ve got about 140 new customers. If you’re making $15 profit on each widget, you’ve made $2,100. Subtract the $1,500 you’ve spent and you’ll end up coming out ahead of the game with $600 over the long-term.
What method and discount will work best for my business?
It is always good to have a good mix of coupon tactics to appeal to your diverse customer base. Use the space to write down your ideas for your business.
How should I distribute my coupon, discount or promotion?
Polling your customers on the types of coupons, discounts and promotions they prefer can be a great starting point for your business. It is also a good idea to look and see what competitors are using. What ideas do you have for your business?
How will I measure my campaign?
The best way to measure your campaign is to educate your employees on the importance of keeping track of coupons or promotions. You won’t be able to accurately calculate your total costs without this data. How will you encourage employees to be diligent?
Have more questions? Give us a call or send a message! We're always here. To see the entire PowerPoint presentation click here!
Friday, December 17, 2010
The Trap!
I got a call from one of my restaurant friends telling me about a great thing he found for advertising his business at no cost- www.restaurant.com. Restaurant.com would list his site for free on their server and sell discounted gift certificates to his customers, with the website getting the money from the sale of the gift certificate. The only decision my friend would have to make is whether he wanted to offer $20 gift certificates for $10, $50 gift certificates for $25 or $35 gift certificates for $25.
This sounds like a great idea, right? They will advertise your business for free and you can track the success rate by the new customers coming in who use the gift certificates.
You know the saying “nothing is FREE”? Let’s take a minute to examine some of the problems with restaurant.com.
1. Many restaurants run a food cost of over 33%, meaning if a customer orders $30 in food, it costs the restaurant $10 just to buy the food they are making. So when restaurants put a $25 gift certificate with a minimum purchase of $35 on restaurants.com, the restaurant actually spends more money on food then they will see in the cash register.
2. The discounted gift certificates are available all the time and the website, restaurant.com offers further discounts on the gift certificates to sell more of them. By being on the site you are allowing your customers to get a $20 gift certificate to your restaurant for as little as $.40, yes that’s right forty cents when they run the 90% off sales. Why would your customers ever want to pay full price for your services?
3. When you join restaurant.com you must agree to a one-year commitment with them. So for one year you cannot stop doing this promotion even if you fear it is not benefiting your business.
4. How do you plan to attract customers that are going to pay full price for your goods after the recession when they know your business as a discount place to dine?
For some businesses discounts are great - pizza, yeah saw a Papa Johns ad this afternoon in the mail. Fast food- yeah my aunt handed me a stack of McDonalds coupons last week. Coupons and discounts work for these restaurants
High-end restaurants that cater to special occasion celebrations with quality food should resist the urge to discount.
Are the people who want to only spend $10 on your $30 rack of lamb the people you want in your restaurant? If so by all means plan to put your restaurant on the list for discount advertising. If not? Research, Plan, Promote, and Buy a little advertising to HELP YOU SUCCEED. Trust me, it’ll cost you far less to do some real advertising than it will to sacrifice your image on restaurant.com.
For more information on Coupons, Discounts and Promotions - how they affect your business - please plan to attend the Lunch n' Learn session in Gettysburg on January 6th. Please RSVP here: http://www.eventbrite.com/event/1070141823/efblike
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