Passing Trends
The housing bubble, gold at $1,545 an ounce and silly bandz have one thing in common. All seem completely reasonable in the moment.
I see trends as momentarily curious absurdities just prior to obsolescence. This brings me to Groupon. Billion dollar rumors abound. I cry foul.
From the consumer’s point of view, the group coupon trend is a win. At the same time, businesses are forgoing up to 50 percent of their sales for the volume Groupon and Living Social can deliver. Working twice as hard for half as much money? It  doesn’t make good business sense to me.
If this equation yielded consumer trial, followed by a long-term relationship with a brand, it would be different. Yet Groupon and its peers are breeding a consumer who demands extreme discounting — one that will merely move from one discount to the next.
I met with a restaurant owner last week who lost $1,200 after implementing a group coupon tactic. It doesn’t have to be this way. Incenting trial through discounts and creating a sense of urgency are worthy goals. Just don’t give away half your sales in the bargain.
Take a cue from my local garden center. I came home Friday afternoon to find a flier under my doorknocker.
This flier gives the first 20 customers a $10 certificate.
It’s nice to see someone getting it right.
- Know your customer: The garden center had delivered to my address before.
- Establish urgency: I wanted to be one of the first twenty customers who got a discount.
- Drive preference: Why would I go to another garden center when I had the possibility of a discount at this particular one?
- Be impossible to ignore: I was forced to interact with the promotion. It was under my doorknocker.
- Get people in the door: Even if I went and didn’t receive the discount, I would still be in the store ready to shop.
- Make a sensible investment: The first 20 customers got $10 off. That’s $200 in merchandise, or $100 out-of-pocket for the store’s owner, not 50 percent of the store’s total day’s sales.
What a welcome dose of smart marketing amidst the chaos of current trends.
