Coupons Ruined My Business!Posted by Chris Garrett / October 20, 2011
How to use coupon sites
The web is a bargain hunter’s paradise and it now has yet another way to save a buck. Coupon sites like Cudo are the latest way to offer rock-bottom prices and drive traffic to mostly service or experience based businesses.
There is no shortage of coupon sites – Cudo, Spreets, Jumponit, Living Social, Scoopon, Groupon, Daily Rippers, Deals, All The Deals, Our Deal, just to name a few.
And, if you are a power user you can use aggregation sites like Buyii.com or Couponadvisor.com.au to view all your deals in one place.
They have become a part of the urban consumer’s life so rapidly that business are struggling to come to grips with the repercussions that cheap coupons can have on their business.
At first it sounds like a win-win situation – the business attracts new customers and the customers get a bargain. Unfortunately, it’s not that simple.
The coupon industry is in dire need of regulation after copious complaints have been made to consumer group Choice and News.com.au. Coupon sites operate under extremely vague terms and businesses are not equipped to handle the increased bookings and low profit margins that cheap deals create.
‘Useless vouchers, confusing statements, dodgy services and a total inability to contact group deal sites with questions’ were among the most common frustrations as readers shared some appalling experiences with coupon deals.
Read more coupon site failures at www.news.com.au.
Two Real-Life Examples
Here are two businesses that ran coupon deals online recently.
- Photography courses in the park
- Beauty and skin therapist
- The photographer’s website crashed for weeks
- He had 800 messages on his phone that he had no way of responding to
- And, he put his whole business on hold to run courses for a fraction of the normal cost
- Lots of people discovered his business but most were only in it for the cheap course and never returned as a profitable customer
The Beauty Therapist
- The beauty therapist had to allocate a staff member to answer the phone full time because she had no online booking system
- Service to her regular clients plummeted because she didn’t have the time to spend with them PLUS they couldn’t get through on the phone
- She resented the voucher holders because she wasn’t making any money from them and so provided a frustrated, reduced version of her normal service
- And, her staff resented her for making them work crazy, stressful hours
In both cases it will take months for their businesses to recover and even longer if they have burnt their loyal customer base or staff.
How to Make Online Coupon Deals Work
There are a few key elements to focus on:
- How do you manage the rush?
- How do you manage the rush AND look after your regular clients?
- How do you provide the same experience for voucher holders as full paying clientele?
- How do you entice voucher holders to return sans-voucher?
The crux of the problem is most small businesses are not geared up to handle 1000 enquiries in a day. It crashes their systems and it crushes their people (customers and staff).
The only way to manage the rush is to automate it by setting up a booking and payment system on your website or, even better, use a third party system to enable voucher holders to book themselves. This empowers them and frees your time to run your business.
Third party systems are strongly recommended because they are often built to handle high traffic – traffic that your website doesn’t have to handle. Your web site will be busy enough delivering general info. (online booking system example)
Make sure customers receive a booking confirmation and feel secure with the booking. If they are unsure, they will call you and that defeats the purpose of automating it.
The coupon rush mustn’t affect your loyal customers, so the booking system for coupon holders be separate from your normal landline or email address. Leave these free for normal business. It’s a good idea to set up an additional email address just for coupon holders. That way you can segregate your email and loyal customers don’t get lost in the chaos.
This also applies to the experience once they arrive. Try allocating certain times of the day for coupon holders and leave the rest for normal business. Make sure you can give everyone the same level of service.
The number of coupons you honour each day is critical. Too many and you start losing loyal customers and going broke and not enough and your coupon holders have to wait months to get an appointment. Coupon buyers are willing to wait, although if you sell too many, you will get complaints like this from News.com.au.
David Deans bought a weekend getaway at a hotel on the NSW Central Coast: “When I rang to book a weekend, 2011 is out of the question. They said they could get me in in May 2012. I feel I am being robbed because the hotel has 236 suites, but I can’t get in with the Living Social offer until next winter.”
4 short answers to the questions above …
1. How to manage the rush?
A. Automate enquiries as a separate system to your normal enquiries with very clear instructions and confirmations.
2. How to manage the rush AND look after your regular clients?
A. Pre-allocate specific times for voucher holders so the automatic bookings are controlled and cannot over-book. Also see Point 1.
3. How do you provide the same experience for voucher holders as full paying clientele?
A. Don’t sell more vouchers than you can handle in a reasonable timeframe.
4. How do you entice voucher holders to return sans-voucher?
A. Give them a good experience by doing Points 1, 2 and 3.
About the author
Chris Garrett is an experienced information architect, online marketing specialist and director at KND. His knowledge is based on years of industry experience in taking online application ideas to reality across a broad range of industries.
KND are digital professionals with over 10 years in the business. We specialise in web, cloud and mobile apps, eMarketing and SEO strategy, servers, hosting and design. We work closely with our clients to achieve successful outcomes. Call us today 1300 228 100 or email email@example.com to discuss your next project.