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Pile-up on Groupon, Coupons, Discounts

They're beginning to pile up

Fenderbender to 20 Car Pileup

You can see it coming as pundits line up to speak out against the excessive discounting being practiced by recession fighting sellers. A 20-car pile-up is about to happen.

People who wrote books and articles about aggressive promotional marketing to drive traffic and build business are seeking to stand out as they speak out against the avalanche of discount oriented advertising that they themselves promoted to fill up our mailboxes and the center of the Sunday paper. All of a sudden it seems that coupons, Groupons, freebies and discounts are ALL bad.

Casting those who provide mindless marketing services such as Groupon, and those who aggressively promote discounting as being stupid is just stupid. Companies that fabricate ridiculous offers that destroy their companies are probably destroying their companies in several other ways.The fact is that coupons have always been problematic. While distribution and redemption of coupons has risen dramatically since the downturn began, the rate of redemption was never more than a couple of percent to begin with. In my opinion, coupons should never be used because they re-open a psychic wound for many consumers who grew up or raised a family during the recession of the late 70’s. Instead, call them certificates – which are legitimate coupons when you think about it.

Seeking to fill the void behind pulling back on mindless marketing, brands are trying to become more meaningful. Is there really that much room in a consumers life for all that meaning? One has to wonder.

Remember that mindless marketing always has had a proper place, and always will. Just because a lot of people have become focused on driving top line revenue via promotions doesn’t mean they are all wrong. No, they aren’t all right, but they aren’t all wrong either.

Price driven promotional marketing can serve a good purpose when it is used to sort full-price customers from bottom-feeders who only buy when there’s a deal. Did you know that some of those full-price customers are also bottom feeders? Ask around and its hard to find anyone that isn’t ready to brag about the last great deal they got. It’s real. If you don’t provide a deal once in a while, someone else will and your customer WILL be attracted to it.

Meaningful marketing should be a core business strategy.  Your business itself should have a core strength and point of differentiation for the consumer. The marketers job is to clarify and remind their customers of these, as well as to attract new consumers.

Growing a business requires a healthy balance of keeping current customers happy, bringing them back more frequently, maintaining margins, and attracting new customers. Just remember that even the richest consumers love a mindless deal once in a while, and the marketer who fails to provide it to them fails to keep their own best customers attention. There is a place for a little mindless marketing fun. Find yours.

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6 Responses

  1. All of us have sales now and then. It’s a way to clear out some stuff that’s been hanging around. People who jump on the Groupon bandwagon seem to think that out of 100 people who come in for the deal, maybe 10 will like what they see and shop regularly at the store. I don’t buy it.

    Now we hear that Home Depot is going to hire 10,000’s of seasonal employees and do their Black Friday promotion, which is discounting all sorts of stuff people likely would have purchased anyway as it’s spring. So instead of putting stuff on sale because we’re long on it, or the season is close to being over they just put it on sale because. Why?

    My thinking as a smaller garden center is to try and attract a different type of customer. One that appreciates quality, knowledgeable staff, and stuff they actually need or might not know they need. We need to promote our businesses as shops filled with craftspeople who create things of value. We are locally owned and provide year round value with occasional sales that surprise and delight.

    Retail has created a customer who thinks we are marking our stuff way up so we can offer sales. I hear this at the Groupon sites, and other discount sites. People actually think we are making money with Groupon. We are the greedy retail stores who if we really wanted to make everyone happy would lower our prices to where they should be all the time.

  2. We have to ask the question; where have all the customers gone?

    Home Depot’s hiring plan includes the same number of new hires this year as they hired last year. It is interesting how they are using this hiring surge to actually promote their Black Friday event out front. Consumers already know it will be happening.

    What will small retailers do to keep them focused on their company? It need not be discounts, sales, or Groupon, but it had better be something.

  3. Sid, I am convinced it’s a matter of reminding the customer that we exist. You must have great plants and products, excellent service, and a fair price. Beyond those things we assume people will remember us when the time comes for them to garden. Time and again we will not get a response for workshops until we have sent out two or three e-mails mentioning the event. We have to find a way to bypass all the noise you, I, and everyone else has to deal with. I think the secret is the proper use of social media to connect and stay connected. Once you have connected with the customer they are a friend and more likely to remember and recommend you. The future of advertising for us to illicit fans of our businesses actively spread the word via social media.

  4. Excellent points Trey. As we get older we can readily relate to the shorter memories of our older customers. At any age, cutting through the clutter of all that bad advertising takes a very sharp relationship knife.

  5. I love this article. But the problem is not that we need to remind consumers that we exist, it is to remind them (guests), and ourselves, of the real value we offer. Most operators neither understand nor communicate this to their guests on a level deep enough to either prove the worth of the experience or support real loyalty efforts.

  6. Thanks for commenting Jeffrey. I would agree that both are problems. Perhaps we should remind them why we exist, as long as the reason is to serve them, the customer.

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