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How Coupon Conditioning is Killing your Small Business. Part Two of Two.
July 3, 2012 by Leave a Comment
How Coupon Conditioning is Killing your Small Business Part Two
In my last article I introduced a concept I call Coupon Conditioning, I also introduced a salon practicing Coupon Conditioning and today I give you my solution.
I enjoy receiving my Groupon emails daily, don’t you? Ever notice how salons are always running promotions? That’s why I choose them in the example above. Here is one way to leverage a service like Groupon in your marketing system:
A salon runs a Groupon offering 50% off a Hair Cut and Style, but also adds a hair wash and condition, style and style consultation. The business normally charges $120 for the haircut and dye, $25 for the wash and condition, $25 for the style and $25 for the style consultation. The total normal cost is $195; Groupon cost is 50% or $97.50. This salon uses Facebook to run weekly promotions. The promotions vary with things like a Free $5 Starbucks gift card to the next 5 people who call and make an appointment and mention they saw the Facebook offer. The salon has signage in the building promoting Facebook and the special offers. In the initial visit the customer’s information is taken and added to a mailing list. The customer is also given a loyalty card which offers a free haircut after 11 visits, and offered credit for two visits if they set-up a follow-up appointment to maintain their new style. A mailer is sent the next day thanking them for their business and includes 3 referral cards to pass out if they liked the service. Business is good.
Big difference here to the previous business right? You see they found a way to increase traffic and get more money for the Groupon deal by assigning value to the package. These items didn’t cost much more money and really do add value, so you can ask for more money. (Warning only assign value to items that actually enhance the experience, otherwise you come off as a nickel and dime biz, you know charging for everything).
Instead of discounting their services on social media, they use a give away costing $25 a week or $100 a month for people who make an appointment. This allows the business to leverage social media while not losing value to the business. The first business didn’t spend any money upfront for social media; they only discounted the service, which ends up costing the business more money after only a few customers.
The loyalty card is used to help with follow-up business. The offer to get credit for two visits cost the company nothing and is used as a tool to close the sale right now. The mailer is used to leverage word of mouth and cost only for the letter, the three cards and postage. I already tell people about businesses I love for free, why not encourage that behavior?
The bottom line: Coupon Conditioning causes your business to devalue your services/products, and it slowly kills your business too. Next time you create a special offer, look to building a package or add-ons to increase value so you don’t have to offer deep discounts to get business.
How Coupon Conditioning is Killing your Small Business. Part One of Two.
July 2, 2012 by Leave a Comment
How Coupon Conditioning is Killing your Small Business. Part One of Two
Today business is tough, even tougher than before. So how does a small business grow its sales? Today with so many discount services out there it’s easy to jump on the “Discounting” bandwagon. It’s simple right; sign up with a service like Groupon, Living Social, etc, begin to bring in sales. Fact: These services have a lot of reach and ability to make your cash register ring. When done correctly these service types can cause a huge influx of sales and even return customers if you do it right, but that’s another article.
Check out this scenario to help me illustrate what I call Coupon Conditioning:
A salon uses a discounting service like Groupon for a Haircut and Dye job, we’ll say the offer is for 50% off. The normal price is $120 so the deal is for $60. This causes a huge spike in business and things seem to be going well. They also use Facebook to run promotions that include deep discounts on the same items twice a month every first and third Friday. Once a customer comes in for the first time they collect their information and add them to the mailing list. Then the next day after their initial visit a mailer is sent offering 40% off their next visit.
This seems like a great marketing system that has been installed. It has a way to reach and attract new customers, uses social media to drive more traffic, and even have a follow-up system in place to help with repeat business. Let’s let the story continue:
Three months after installing this new marketing system something begins to happen, there are warm bodies in the business but the business is not making more money than before the new marketing system was installed and it seems you are working harder than before too! You notice most transactions are discounted and the business is very slow the second and fourth weekends every month. It is decided you need more business the second and fourth weekend and now run a weekly promotion with the same deep discounts. After six months you have fallen behind, with an increase cost in raw products and less revenue regardless of any promotion or pricing change you try. What happened? The customers of this business were conditioned to never pay full price. Coupon Conditioning is to blame.
Wow what a powerful idea! You see at first it seems that this is an awesome marketing machine and it’s driving new business, but later this model got the business in trouble. Coupon Conditioning your customers causes you to decrease the value you bring to their lives. They never expect to pay full price because they simply have to wait a short time before they can receive deep discounts. Now I’m not saying you should never offer deep discounts, we built marketing plans for free, just make sure your marketing system moves you out of this space quickly.
So how can we fix this? Well the obvious answer is don’t build your marketing system only around price, but in today’s world you may need to leverage a service like Groupon now and than. My next article gives you my suggestion, but what would you do this fix this?
3 Awesome Business Networking Events to Jump Start Your Month
June 3, 2012 by Leave a Comment
Three Awesome Business Networking Events to Jump Start Your Month
It’s the beginning of the month and I thought I would suggest 3 networking events to attend this week in the Albuquerque Area. I plan to attend each event, make new contacts and than follow-up with every new contact for the next couple of weeks. Looking for more tips? Try these 3 Networking Tips from last month’s post.
Exhib-it B2B Expo Thursday, June 7th 5:00pm-8:00pm
Hosted by DJ Heckess and Exhibit this event looks to be a huge opportunity to meet local business owners. This event comes only once a year and presents two different opportunities, first there will be businesses who purchased tables and are there to show their services/products, these people maybe great partners for you. The second group of people are, the business owners walking around at the expo. Remember to shake as many hands as possible. (I got that tip from the Business Coach, Michael Loewenthal) Hope to see you there! You can get tickets for $15 at the door if you didn’t pre-register.
ABQ West Free Business Networking Event Wednesday, June 6th 5:30pm-7:30pm.
This is the best Networking Party in Albuquerque! Every month I meet many great contacts at this event! This free event is one you should put on your calendar every month. Last month I met an awesome photographer who helped take pictures at the Go Local Community Expo.
Rio Rancho Chamber Visionaries Wednesday, June 6th 8:00am-9:00am
The Visionaries meet twice a month and are community focused, plus they get results! Why should you attend this week’s event? We will be discussing the upcoming Maui Money Event to benefit Storehouse West Food Pantry and Roadrunner Food Bank of New Mexico. This one is free and includes breakfast.
Wow all that and it’s only the first week of June! I hope your business hits the ground running at these events! Want to start marketing your business today? Here are some free online marketing tips.
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Swim Like A Duck
May 7, 2012 by 1 Comment
Business is hard, hard to get one going, hard to keep one going. We have no control over what the external forces have in store for us, we can only control how we respond to them. How successful we are at responding depends on how well we utilize good business principals.
In the day to day operation of business there are things we must do, things we want to do, and of course, the things we do not want to do. Let’s look at the “things we do not want to do”; this is most likely part of the 20% that the Pareto Principle refers to.
Cold Calling, no one likes to cold call (well, most everyone), we hate the answer, ‘no’ we hate people not returning our calls, we hate it when people do not take our call and we hate it when they say that they are “all taken care of”, especially since they have no clue how much better we can make it for them.
Cold Canvasing, this is the act of walking into a business, any kind of business without an appointment with the hope of speaking to the decision maker. For many people, this can be a scary thing to do. Personally, I prefer this to the cold call.
Following up, the act of calling back people you have called 813 thousand times before. “Call me back in two weeks…” we have all heard this countless times, and we follow up (most of us anyway) and guess what, they are never there or they say, “I haven’t had time to go over what you sent me, call me in two weeks”, two weeks later, the same story. Over and over we do the follow up with little results to show for it.
Sounds eerily like the definition of insanity, “doing the same thing over and over and expecting different results”. No, we are not crazy, doing what we don’t like is all part of a process that needs to be in place, ask any successful person.
What is important about all this is that it is part of a process, good or bad, it is a process, and every business requires processes to operate on. If the processes don’t work, then they can easily be changed. Without processes, systems, all you are doing is shooting from the hip, and just as in the days of the old west, most gunfights where the opponents drew their sidearm’s and fired at each other, missed their intended target. Shooting from the hip does not work. The exception here is, it only works for the extremely proficient, well trained person and even they only shoot from the hip in rare cases.
The duck always seems to float along effortlessly on top of the water. In reality, beneath the waters surface their webbed feet are paddling constantly, the muscles in their legs, the connective tissue to the joints, and the muscles in their body all work together in harmony to move the duck where it want to go. There is a system in play here that works for the duck and it makes it appear effortless for the duck to get from point A to point B.
Have processes, systems, in place for your business, do them daily. It does not matter if you are a retailer, a service provider, a distributor, mortgage broker, insurance sales person, or a commercial cleaning company, without a system to follow, you are just shooting from the hip, and one day you will shoot yourself in the foot. Worse yet, you could be like a duck without webbed feet.
What are you going to do to take your business to the next level?
What do you listen to in your car, music or CD’s/tapes to help you in your business/sales.
Do you implement, do you know what to implement.
Lost opportunities a bound when systems and processes are not active.
“Opportunities are never lost. The other fellow takes those you miss.”~ Anonymous
Coach Michael Loewenthal of Albuquerque NM is a ‘Main Street’ Coach,helping businesses overcome obstacles through coaching, process development, marketing plans, and training (sales, cust’ svc. etc) and how to PROPERLY run a business. Professional Speaker-Trainer, Learn More about The Business Coach
Why Your Small Business isn’t a Smaller “Big Business” and How to Use this for Your Advantage
April 17, 2012 by Leave a Comment
As a Small Business Owner sometimes we think of our business as Small “Big Business.” We market services like big business, but different. Your small business is actually “weird” when compared a to big business. Marketing thought leader Seth Godin came up with “The Weird.” Which I think sounds weird? But it actually makes a lot sense, let me explain: In big business you are always looking for ways to take a product and make it scalable so you can produce for the masses. When Steve Job’s took over Apple again in 1997, after being booted out, he found their products were being specially produced for certain merchants. He quickly reduced their product line by 70% to just 4 products. This would prove to be invaluable in Apple’s journey to becoming the powerhouse brand that is today.
Apple’s example also presents a huge opportunity for the small business owner. Since most big businesses are focused on economies of scale, you don’t have to be. You find a niche or under-served market and simply serve that market, maybe the one that apple stopped producing for. Serving specialized and catering to specific markets is what Seth refers to as “The Weird.” It’s creating products or services and marketing them to smaller groups, something big business doesn’t understand. You don’t have to be the Jiffy Lube in your neighborhood, but rather the Toyota specialist.
We can use this notion of the weird with our small businesses by focusing on products and services in markets where needs or wants are not being met. This can also help with your positioning as an expert in a specific field or for example, the go to person for computers software built out for a specific industry not available at big box retailers.
By focusing on industry specific needs you can leverage your time by increasing exposure to the market and increase value since you are so specialized. Some businesses can grow off that one niche, which is a small business advantage. Another benefit is you can than develop cross-markets as time goes on to grow your business too. Think of your business and who you market to today, can you find a under-served niche and step to serve that niche?
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More Proof Why Content is King in SEO
March 22, 2012 by Leave a Comment
This past week at the SXSW Conference, Google’s Matt Cutts was asked how the Small Business Owner could compete with a business who had a much larger SEO (Search Engine Optimization) Budget. Need more info on SEO Click here for a free resource.
Cutts explained that Google is in the late stages of updating the search algorithm and this will “level the playing field.” And actually penalize “Over-Optimized” Sites…Wow! What does this mean for you, the small business owner with a small SEO budget?
As explained in my free webinar and ebook, Content is king. When you produce valuable content and write/produce for people not robots; The content brings the eyeballs and traffic, which brings links and more people engaging with you on the blog and the social media world. Sure there is more to it than that…but this is the basic idea.
The problem with putting such focus on SEO is that Google, the largest Search Engine in the World, can change its algorithm at any time, and they do it as often as some celebrities change their relationship status on facebook!
What should I do as the small business owner? Let me state the obvious first, continue or begin to produce valuable content people are willing to share and encourage social sharing if the audience finds it valuable. Second begin to place more emphasis on social media engagement, not only by sharing but increasing “likes” on facebook fanpages, “followers” on twitter, and “+1” on Google +. This will produce traffic and social proof to lead to higher rankings.
If you have any questions or concerns feel free to comment below.
Oh And One More Thing…
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Virtual Networking event Includes Small Biz Coaching Session
January 19, 2012 by Leave a Comment
Small Business Guru Fran Tarkenton and Branding Expert Craig Brinkley will provide information to help your business grow!
Next weeks Virtual Networking Event will include Cheif Consultanting Officer for Core Strategy Group Mr. Craig Brinkley. Mr. Brinkley consulted with Diet Coke executives to help bring the brand to the number two soft drink brand in the US, only second to Coke and beating Pepsi. Be ready with a pen and paper so you can have key strategies in building your brand.
Click Here for more information on the Virtual Networking Event
Click Here for a Video on what a Virtual Networking Is
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