Hanoi Morillo

As a daily deal addicted, I think it was about time to write about it.

Lately, I’ve been reading many articles about companies that offer daily discounts like Groupon or Living Social. I have to say that I have purchased a few coupons myself and I love my discounts!

However, a great opportunity for a small business to leverage the online world can become a nightmare.
Recently, I purchased a coupon to get a massage (I need to relax from time to time) and when I call to booked my appointment, I got an anxious assistant on the phone confirming that they were fully booked until January!
When I check the deal page I realized that they had sold more than 300 coupons. 300 for an hour massage. That means 300 hours of work plus the appointments they already had in their agenda.
Let’s do the maths: they open 8 hours a day, 6 days a week = 48 hours a week = 192 hours a month + extra appointments – holidays = I’m fully booked for almost 3 months!

What are the consequences? A frustrated potential customer that will probably forget about the coupon after a couple of months. If you lose that customer once, you may lose him/her forever plus the retail selling opportunity (all the extra things you can sell to the customers when they visit).
And I haven’t finished… what about those 3 months of intense, unexpected and unorganized activity?
And what about your social reputation?? What’s is going to happen when all these discount seekers visit you, obtain a bad service and they post a terrible review in Yelp, Urbanspoon or any other site?

I could read this words in The Globe & Mail a few days ago:
“Researchers found offering a Groupon correlated with a bump in business for most companies and also an increase in Yelp reviews. But they also found a company’s star rating declined after it offered a Groupon. In general, those companies with reviews that mentioned the words “Groupon” or “coupon” had star ratings 10 per cent lower, on average, than those that did not.”

So what’s the conclusion?

If you’re a business owner, go ahead and use the discount sites to promote your business. But please, be reasonable. You can participate almost as often as you want so the first time you try don’t go crazy and offer only what you can really handle! Remember that you need to continue to offer an amazing customer service. Don’t ever forget about that.

If you’re a discount seeker, enjoy the discount!