Exposing your business to the tens of thousands of daily Groupon, Couvon, SwarmJam, EthicalDeal, and every other social media coupon site members is a tempting option, but it’s one that every business owner needs to carefully evaluate.
There are more than enough posts and articles saying that the social media coupon craze is going to kill your business and create an economy of coupon-only shoppers who jump from business to business depending on who has the best deal that day. We’re not telling you these sites are bad for your business – only you can decide that. We’re just going to break them down a bit, so you can learn how to do it better, cheaper, and whenever you want. This first post will look at what the social coupon sites are, and how to develop your own email list to help you out-group Groupon!
For the most part, the coupon sites work like this:
- You contact them and they determine if you’re appropriate for this program
- They work with you to determine a deep discount (30% – 70%)
- They schedule when the email will hit (you will know well in advance so you can schedule around it)
- They collect the payment
- They might tell you it’s a 50/50 split on the purchase price, but they usually ding you for the credit card costs, so it’s likely closer to a 53/47 split, and not in your favour.
- They parcel the payment out to you over the next few weeks/months (varies depending on who you choose to go with)
- You bust your butt to keep up with the demand, knowing full well that it’s future visits that are profitable for you, not the coupon visits.
A quick example:
Your $50 product/service is discounted to $25 for the promotion. You get $11.75 for each unit sold, which could be a few dozen to a few thousand – depending on demand and the cap you’ve placed on the deal. For many businesses, this deal is at, or below, their cost – so each coupon is being sold at, or near, a loss. You will have to staff accordingly, order enough product to satisfy the immediate demand, and do your best to ensure each visit for each discount customer is loaded with enough value for them to return.
The social coupon site gets the money from the sale and the email address of everyone that has signed up to get your deal. Great for them, and the increased exposure can be very good for you – if you can keep up with the pace.
What is Social Couponing?
When you break it down to the basics, the social coupon sites are basically a mailing list. Millions of people have signed up to get the daily email from some or all of these sites – asking them to share more information about each company.
Mailing lists have been around for a long time and have been available for rent/purchase to your business for just about as long as there has been email. You’re probably on a few of them (if you aren’t sure, just check to see if you’re getting emails for “vigara” “cailis” or any other misspelled wonderdrugs.) The biggest difference between the social coupon sites and these unwanted emails is the end users have opted in to the process – granting the company the right to send them daily deals.
Are you building your own mailing list?
If you have a website, a Facebook page, or a Twitter account, you can build your own list. First and foremost – never sell or share your contacts with anyone. This is your list of people that have shared their contact info with you, and you don’t want to do anything to jeopardize that relationship.
Some tools you can use to acquire new email addresses:
- An opt-in signup form on your website
- An opt-in tab on your Facebook fan page
- Ask for the email address in the paperwork you share with your customers
- Ask on the phone or in person – if it fits into the conversation
- A business card drop off in your business
- A drop-box to win a prize (new car/gas/coffee card/free service/etc)
- Do NOT buy/rent/borrow an email list. It’s a quick ticket to spamdom
Be creative – but be honest
Tell your customers that you are collecting their contact info for your email database. Let them enjoy informed consent – they know they are giving you their info, and in return you are promising to share information about your business – deals, coupons, special events, etc. You must make it clear that they are opting in, and this engagement will help your conversion in the future.
The next post on this topic will look at some of the available ways to deliver your email marketing to your new list. For now, work on developing your list so you don’t have to use the social coupon sites to rely on their database. Already signed up with one? Make sure you have something in your store today to start collecting email contact info. You can compare future in-house campaigns against the results you had from the social coupon sites.