Here's the Deal: There’s Three Sides to Every Good Deal!
Feb 01, 2012 11:28AM
● By Linda Sechrist
Gone are the days when shoppers had to either wait for the postman to deliver the weekly circular so they could clip coupons, or for a special holiday sale so they could get a bargain at a local retail establishment. Today’s bargain lovers can seize the moment with an iPhone or Smart Phone, which have given mobile status to “couponing”, making it easy to check a coupon APP mid-morning and find a light lunch deal that weighs in at heavy discount. Definitely a trend, 10% of all mobile phone users redeem coupons—a number that is expected to reach 16.5% by 2013, according to Microsoft.
The Coupon Service
Renee Sweany can attest to the fact that it is easy to get caught up in the excitement of a good deal because she does it for a living. As the founder of Green Piece Indy, a twice-weekly newsletter offering green lifestyle tips on how to be more considerate of the environment, Sweany has been connecting Indianapolis residents with greener options since 2008. In December 2010, she launched her GreenClipping website with daily deals. “The response to GreenClipping was good and now I have 4,000 subscribers, which are a target audience for the local green businesses that I promote,” says Sweany, who notes that subscribers download and print coupons, which they redeem within a time-sensitive period.
Lessons from Coupon Merchants
To build her business, Wendy Morrison, owner of Mother Nature’s Sun, has tried several coupon services including GreenClipping. “I’ve also tried Deal Chicken, Living Social and Groupon,” says Morrison, who points out that coupon services—discount rates negotiated for customers, restrictions on redemption dates, wordings for description of services, and results generated--can differ from company to company. “I think it’s really important that I get to describe my services clearly without cutesy marketing phrases so that coupon users are certain about what they are getting. Restrictions on these things make it challenging for businesses that offer massage, bodywork, sound and energy services similar to mine,” advises Morrison.
“I had good experiences with GreenClipping,” says Morrison, who notes that many of her GreenClipping coupon clients return for additional services. Morrison has tracked other coupon services to determine her return rates and the profitability of her investment. “I learned early on to ask if coupon redeemers used Groupon or Living Social coupons often. If they were frequent users, then I knew they were “deal hoppers” who wouldn’t be back,” explains Morrison.
According to Morrison, Groupon and Living Social demanded at least a 50% discount off the regular price of the 90-minute massage she offered. The client is charged $55 (on a credit or debit card) for the normally $110 massage and Groupon gets 50% of this cost for administrative and marketing fees. “In other words, I received $27.50 for a 90-minute massage,” says Morrison, who admits that she was initially too inexperienced to realize that it was not a win-win situation. “It’s a lesson I wouldn’t repeat,” she says. Another lesson Morrison learned was not to schedule too many “coupon customers” that would crowd out her full-paying clients.
Mindi Epstein, Director of Marketing and Membership for Arthur M. Glick JCC, has twice used the services of Groupon as a marketing tool to introduce the programs and services of JCC Indianapolis to the public. Satisfied with the results but frustrated with getting bounced around, Epstein explains. “Groupon can be difficult to work with because they hold all the cards and don’t always give notice of when they are going to run your deal. As a merchant, that means that you have to suddenly jump to have all systems in place for the onrush of coupon callers or users, and that’s definitely not a good thing,” she says. “It appears that they select the daily deals that make them the most money.”
The fact that Coupon Groupies aren’t always loyal is something that Epstein can also attest to. “I love treating myself to a facial but can’t afford to pay full price for one. I’m not a loyal customer. Every time I see a half-off coupon for a facial, I buy it, wherever it is offered.” says Epstein.
Nancy Caniff, publisher of Natural Awakenings Magazine, has purchased several local deals from Groupon and Living Social. “Watching that timer tick down to the deal expiration is my motivation” says Caniff, whose deals have included: a box of local foods (fruits and veggies), full-day bicycle rental, and comedy club passes. “I used the food voucher immediately, but accidentally let the bicycle rental expire,” she advises. “Buying “deals” has given me an opportunity to try products and services at less than full price, and I’ve enjoyed it, but in the back of my mind, I wondered if it was positively impacting the business,” remarks Caniff, who has partnered with and is helping introduce a new concept in discount buying: NaturallyGoodDeals.com.
A New Deal in Town – NaturallyGoodDeals.com
NaturallyGoodDeals.com (NGD) is partnering with its “official media partner” Natural Awakenings Magazine, to offer fair deals for the community and the merchants. “We’re really excited about this partnership,” says Caniff, who believes that NGD chose Natural Awakenings Magazine for its 40,000 loyal readers, who pick up their monthly issues at over hundreds of local distribution sites. “Plus, we host a Natural Living Fair in the community that attracts thousands of guests,” advises Caniff. “It was a natural fit, which will give NGD merchants even better exposure to people who are more likely to be repeat customers.”
Caniff also sees NGD as a perfect fit for businesses and readers of Natural Awakenings Magazine because their goal is to strengthen the local business economy by helping the merchant select the best possible deal to gain new and repeat customers. “Customers can feel good about buying the deal because they know they are supporting a local business, which will garner more attention and exposure with Natural Awakenings as the official media partner,” remarks Caniff.
NaturallyGoodDeals.com is to poised to become a national company with many markets already underway. “I’ve been told that an iPhone APP is under construction,” says Caniff, who notes that after sharing the new concept of NaturallyGoodDeals.com, which also favors the merchant, Morrison and Epstein are eager to take the new win-win model out for a trial drive.