Tag Archives: Marketing strategy

Should your business try Groupon, Living Social, & Google Offers?

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Looks like the online promotions space is thriving. More and more special offers sites are being created. Google even went and developed their Google Offers product after they failed to buy Groupon for $6 Billion – that’s right $6 Billion. So there must be some value in these promotional tools right? Otherwise businesses would stop using them and Living Social sure has a large advertising budget for themselves.

Let’s look at Groupon.  So if you have a $50 product/service, that you sell for $25 – (it has to be a 50% discount so it is a “good deal” to get approved) and then you get 60% of the $25 and Groupon keeps 40% of the $25.  You are really selling a $50 product for $15 because of the discount and the Groupon percentage – but they are opening relationships for you – and for the most part giving you an opportunity for customer relationship.  So is a $35 acquisition cost on a $50 product/service worth it?  Only you can answer that, but you should run the numbers.  Based on that, I can tell you, it is going to perform close to what it would cost you with advertising dollars spent at that level (but you can optimize for performance over time with advertising).

You will have some instantaneous Branding and recognition, not to mention customer traffic over the 6 months the Groupon/Living Social is valid.  You will always have some existing clientele who will always buy this so it doesn’t reach only new people – unless you are just opening your doors in the market.  This is unbeatable for the new business.

However, I have yet to see a second offer from the same business so you only get to use this once – so pick your timing – if you are not a new business try to use it to boost a slower period and make sure you can handle the demand during the 6 months without losing your shirt.

There is also the FREE money aspect of this.  Like any rebate that is offered, you get a % that don’t use it. So if we use the first example again, you got $15 off each sale and that 25-30% don’t end up using it, that is FREE money for you to keep, which doesn’t hurt and softens the blow – but then you don’t get that all important “new” customer relationship either so it is kind of a double edge sword.

Here is a great case study.  We had a client use Groupon in December 2010 – a single location Hot Yoga Studio as part of launching their business and they sold almost 700 at $39 a pop.  That is incredible for a small business that is just getting going.  Now, it gave them some cash in the door and created some relationships.  They considered it a huge success.

My take, if you are opening a new business or want to launch a new product or want some quick cash – put an unbelievable offer out there through one of these and you should get some traction. Also learn from one before you try to do another – Set up some tracking on your website that sees what these people do that come to your website via this campaign and track their habits.

Be prepared to use it as a loss leader to get access to new customers and get “legs” underneath your new product or location. Also make sure your ongoing marketing turns those new relationships into repeat customers so you can make some money back and it creates success for the long term. That might take a second promo for them for another visit – but you don’t have to give Groupon their 40% this time.

Let us know if you have had success with one of these services – please give location and product/service sold and if it has been successful in generating repeat business.

Social Media & Online Advertising Help You Reach Your Audience

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Lately I’ve been hearing a lot of my friends complaining that they are “creeped out” when they see Facebook ads tailored to their demographics or interests, or when they see ads from websites they have recently visited on other websites. This is technology at work to benefit both the user and the marketer.

Facebook’s privacy policy has long been a controversial issue. In my opinion, if you put something on the internet (especially something about yourself) you need to have the mindset that it could be possible for anyone and everyone to read it. By entering your interests or personal information in your profile – even something as simple as your gender or marital status – you are making it possible for those advertising on Facebook to group you into a “category”, which is then used for marketing purposes.

Now, I don’t know what makes advertisements catered to my interests so creepy. Personally, I think it’s great. Do I want to see ads about fantasy football? Not really. Guys, do you want to know about a great deal on stilettos? Doubt it. The same principle applies to marketers. Why spend your advertising budget on an uninterested audience? Seeking out your target audience is certainly not revolutionary, but once it is applied to Facebook, it seems to make people unsettled. These strategies are done to help you get content you want and eliminate clutter.

How does Facebook target users?

The thing that I think people misconstrue about Facebook’s ad targeting is HOW they are actually getting targeted. It’s easy to think that “big brother” is scouring your every move trying to figure out what type of person you are, but in reality, the only information used is what you voluntarily supply. Let’s say I opened up a dog grooming salon in Detroit, Michigan. I would be able to specify that I want to serve ads to those who report they are living in Eastern Michigan and have dogs listed as one of their interests. Better yet, I could even be as specific as targeting dog owners with the breed of dogs that tend to give me the most business AND set a geographic distance from the zip code of my location(s). Talk about specific, relevant, and cost effective advertising!

Retargeting follows you around the web

Another effective way to advertise to a more appropriate audience is through retargeting. It’s not necessarily a coincidence to see an ad from a website that you might have visited a couple of days ago. Some websites set cookies through your browser when you visit a certain page(s) on their website and can then serve ads to you on other websites while you are surfing the internet after setting this cookie. This is also possible to do through Google Adwords via the Audiences functionality. After putting a tracking cookie on specific pages of a website, display ads will then be shown to individuals who have visited those pages as they browse websites on the Google Display Network.

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What are your company’s value propositions and differentiators?

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Just re-reading a great article from Jeffrey Gitomer in the local business journal. It resonated with me because we preach this to all of our clients when talking strategy for their marketing and sales efforts. Everyone needs to know their value propositions & differentiators because if you don’t then you are just another product or service that you will market as a “commodity”. A better question is do you know what your value proposition is?

Everybody has their set of products and/or services. Most have spent some time coming up with “differentiators” so they can tell why they are different. But true value combines what the client or prospect perceives to be in favor of them combined with what you perceive is in favor of them – hence the value proposition.

Are your Brand and marketing strategy reaching beyond the product or service itself to a relationship with your clients? Where are the areas where the most value you provide is perceived by your clients? Whether you consult Fortune 500 clients or sell shoes, you need to craft, create, and control the perception of value your product or service. Social media is exploding because it helps create this value and gives businesses more access to each customer relationship and therefore the ability add more value and integrate themselves with a client. In the case of services, your presence out in the web channels can add to building trust, in the case of shoes – how many people they can see are talking about them will add “perceived value” to your shoe or Brand of shoes.

Perceived value can also far outweigh the actual price paid. That value can actually help justify the price in a client’s mind. Everything you do needs to drive the prospect/customer to perceive value and the value you give provide to them. Price objections are typically more about them not perceiving enough value – it also you just need to change their perception and your content, messaging, and social media strategy can all help you change that perception.

Work on developing these propositions and you will see your revenue grow. Here are some helpful marketing toolsto help you craft your marketing and web strategies.

Is it Social Media or should it really be Public Media

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The term Social Media is not really accurate any more. Why? Because we have moved well beyond “social” into doing business. You want information to get into the marketplace, just turn to Twitter, Facebook, LinkedIn, Flickr, Digg, Delicious, etc – and you can get it out to the masses more quickly than ever. Another reason, all of the a four mentioned have more value that being social if you use them right.

Also, one does not really have any control over what can be said/posted about them or your company or organization. It is really “public” media. Word can spread at warp speed to the public, especially if people deem it to be interesting. Several companies, public figures, and celebrities have “social media” site about them that they don’t have anything to do with – but all go into controlling public opinion of them. Some have to spend significant time to control their brand out there. The bigger your “Brand”, the more time you have to spend in this space to control your Brand.

I could also see the term “community media” being a potential moniker as well. All of these tools we mentioned above really go into creating a “community” of people who are interested in similar topics, products, information – and they feed off each other. That is an effective strategy to utilize all of these mediums. Add value to your clients and prospects, filter information for them, be a resource and partner to them as much as a supplier or vendor.

Creating an effective social media strategy is all about the execution of it and understanding how each piece plugs into the overall picture. You should hire someone to guide your strategy, but the information and content really has to come from someone internal while the expert will tweak that content for maximum effectiveness through “public” media channels. That guide for most companies that would mean outsourcing as would not be near a full time position – the right partner should have some understanding of your business and industry in order to be most helpful.

Emotional Marketing Messaging vs. Facts Based Rational Messaging

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I was just re-reading an Article from earlier this year in Advertising Age that talked about why emotional marketing messages beat the rational ones. They looked at 880 case studies, covering two recessions to see if there was any difference between the “good and bad times”. What was determined was emotional advertising was twice as likely to generate profit gains than the rational ones, with the campaigns that use both, splitting the difference right in between.

The biggest difference was the emotional marketing reduced price sensitivity, which helped companies to be able to hold more firm on their pricing (with a better economy, it would allow you to probably charge a premium). Emotional advertising allows one to create a sense of differentiation for your brand and helps it appear to be worth “more” to the customer. However, a person that would respond to more data driven advertising or rational messaging, is typically more analytical so it is expected that they are more price sensitive because they would be one that “does their homework” first.

Balancing this in the Internet age takes some effort because of how Facebook, Twitter, Blogs, Websites, and everything can spread more quickly – especially through industry trade channels. If you combine that with the fact that 80%+ people research what they want to buy online (especially if it is not a standard consumable good) then you have to make sure your message reaches across all mediums.

If you ask most business owners, “Would you like to be able to keep 1% more through your price or increase your volume 1%?”, holding that price would be more to the bottom line that the equivalent increase in sales volume. Your marketing needs to help you achieve that.