Considering Groupon? Consider this.

Some time ago, my better-half bought a Groupon voucher for a professional photo-shoot with Jackie (pictured above). In this post, Jackie answers questions about the results of the Groupon campaign and offers useful advice to business owners considering using such deals.

Based in Oxfordshire Jacqueline is well known for her Social Media photography, where she works out on location capturing natural, dynamic and vibrant images that make her clients stand out from the crowd. Her family and portrait images are natural, enchanting and full of character.  Examples of these can be viewed at www.jacquelinecrossphotography.com

You can follow Jackie on Twitter: @photojac

Ramblings: Jackie, was this the first time that you used web-based group buying schemes like Groupon for your business?
Jackie: Yes

R: Why did you decide to use Groupon in your business?
J: My aim was to use the campaign for brand awareness

R: Did you have specific goals in mind? What were they?
J: Together with brand awareness, I had a marketing plan in mind for an up sell from each shoot, something affordable for the client and value for money at the same time too. From each shoot, my main goal was to sell a disk which contained all the digital images from the shoot. Together with this, I appreciated that each client would be great data capture together with great future recommendations and exposure.

R: To what extent were these goals met or exceeded?
J: My goals were definitely exceeded. Clients are loving their images and going ahead and purchasing the disk from the shoot. On top of this I have been receiving great recommendations. Also, unexpectedly something that has come out of the campaign is training. My background is training and I am now running future courses for some of my Groupon clients.

R: In the post ‘Groupon, Optimism and Procrastination’ I mention that some customers end up not redeeming their vouchers.
J: That is correct, I am happy with the number of vouchers that have been redeemed and pleased that I set 12 month duration to be able to cope with the demand.

R: Roughly, what percentage of your vouchers were not redeemed?
J: 20%

R: Is this something that you took into account when you signed up for the promotion?
J: I looked into this campaign very carefully and made sure I had a good plan in place. I understood that they would not all be claimed and I decided I would be happy even if 50% would have been claimed.

R: Were there unexpected benefits from this initiative?
J: The photography training requests from Groupon has forced me to be proactive and I am now offering training courses as a result which I have been thinking about for sometime. This is an area of my business that I feel will grow over the next few years and I am now looking forward to running the following courses in Oxfordshire:
– How to take good photographs at your friends wedding
– How to take great images of your pets
– How to capture fun and relaxed images of your children

R: What problems or pitfalls should other businesses be aware of, before signing up to these sort of initiatives?
J:- Make sure you can cope with the demand
– Make sure you have an up sell offer that is good value
– Make sure you have a good administration process in place
– Make sure you agree good timelines with Groupon, I am glad I did this, because I believe that many businesses have struggled with the demand over a short period of time. I spread my offer over 12 months and this has allowed me to continue with my commercial photography which has meant Groupon has had no impact on my day to day business

R: And, finally, do you think that you will run another one of these promotions?
J: Not at the moment, I achieved what I set out to do this year and pleased with the results. Possibly next year I would consider a different offer once all the vouchers have been redeemed.

R: Thank you, Jackie.

Reflecting on Jackie’s answers, I propose five key aspects to consider when running a web-based group-buying deal like Groupon’s.

A means to an end: Groupon is a tool, not a goal in itself.
Before you commit to a campaign, you need to consider your marketing objectives. Is Groupon the best (or even a good) way to achieve those goals? This blog post discusses the benefits of running group-buying campaigns.

The devil is in the detail: Plan carefully.
Ensure that delivery runs smoothly for you and for the Groupon buyer, in order to make a great first impression. What are the pain points in the process? And don’t forget your existing customers: ensure that you can accommodate the additional demand without undermining the experience of your regular customers.

Think ahead: Engineer up-selling opportunities.
Chances are that, in the group-buying deal, you are selling a product or providing a service at little or no profit. Yet, when customers redeem their voucher, they are giving you something very valuable: their attention. Make the most of it. What can you offer to your newly acquired customer that is of great value to them and of little cost to you? Up-selling gives you a better margin and offers further opportunities to engage with that customer, capture more data and so on and so forth.

Play to your strengths: Take advantage of cross-selling openings.
As a provider, you will have various skills and competencies. Let your newly acquired customer know that. Research shows that customers who buy various services from the same company are less price sensitive and more loyal than those who buy one type of service, only.

Too much of a good thing: Balance short-term gains against long-term losses.
This week, I saw a deal on Groupon for a river cruise. It is exactly the same one that caught my eye less than a month ago. This company is not alone, however. Many businesses will offer group deals again and again and again. Yes, the company gets exposure, again. And it gets a peak in business, again. But at what cost? I am not just talking about the low margins typically associated with such promotions. I am talking about the long-term effect that the repeated deals will have on customer expectations in relation to this provider.

What other lessons / tips would you add to this list?

Finally, let me thank Jackie, for a fantastic photo-shoot. It was a truly enjoyable experience and she produced wonderful pictures. If you are considering a photographic session for your family or business, I recommend Jackie. Enthusiastically.