Recently we published an article on the pitfalls of using a group buying “voucher” promotion. We here in the office thought our angle was pretty watertight but we asked for some feedback from out there on the front lines – and we got it!
It seems to be fact that some of Australia’s florists have used group buying promotions successfully to attract more customers and sales to their shops, without any of the negatives we warned against in our previous article.
Group Buying Promotions: How To Get It Right
So how can you do the same and use the power of group buying (online voucher) promotions to effectively increase business to your shop?
Tip #1 – Find out How Big the Company’s Email List is
Not all group buying websites are created equal, so the first thing you want to ask is: How big is their email database? Some of the more famous names have massive lists which will mean your offer is going to be seen by a LOT of people, but some only have a few thousand on their list.
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Tip #2 – Find out What Percentage Commission Does the Company Take?
Some of the more popular companies take whopping 50% of the already discounted price, some are asking for a much smaller cut of the pie. Obviously, if you can negotiate a smaller percentage pay out to the voucher company then this is favourable, but you must consider Tip #1 – how big is their database? If they offer a small percentage but have an insignificant email list to present your offer to, then the smaller percentage pay out might not mean anything much in the long run.
Tip #3 – Keep It Simple
Meredith from Embellish Flowers in Adelaide was one of the florists who successfully used a group buying site (Spreets). She said that part of her campaign’s success was that she stuck to a mantra of “No Labour”, making sure her deal was very easy to pre-prepare and to simply hand over the counter.
Meredith chose to avoid arrangements altogether in the deal in favour of something very simple. Considering Embellish Flowers received 400 orders through the deal, it’s a good thing she did!
Tip #4 – Crunch Your Numbers
The other great thing Meredith had to say was that she did her homework and made sure that per sale she was making at least a small profit. That meant taking the time out to do the maths; how much would the voucher company take? What would the stock cost? How much labour would need to be accounted for? If you do this well, there should at least be a little bit of margin left over so you don’t come away feeling like you lost out financially.
Tip #5 – Consider It a Marketing Exercise
While Meredith did make a small profit per sale, more to the point she said that “it’s not supposed to make a lot of money now; it’s an advertising experience.”
“What you do now affects your business 6 months or a year down the track”, she continued, explaining that she felt very confident that by providing these new customers with some wow-factor service coupled with some intelligent marketing skills (see next tip), the promotion would pay off for her business in the long run.
Tip #6 Ask for Their Email Addresses
Most people when asked will provide their email addresses when purchasing something from you, so you should already be doing so generally, but especially when doing a highly discounted group voucher deal.
Teresa Hill from Bon Fleur in Sydney told me that she found nearly all of the buyers happy to give over their emails when purchasing, and she has since gained “a couple of good regular customers – and even a nice bottle of wine from one lady who was so happy with the deal”.
A couple of repeat customers might not sound like much – but in the context of the next tip, it makes sense…
Tip #7 – Ask if You Can Only Target Your Local Area
Teresa asked if she could purely target those people on the group buying list who lived or worked in her local area and discovered that it was possible.
Due to this tightening of the deal’s parameters, they limited the promotion to a manageable 55 sales, “40% of which were actually from outside the local area – but this was fine because we were able to make extra by charging the usual full delivery fee” says Teresa.
Which leads me to the final tip…
Tip #8 – Be Ready With Your Up-sell
Both Teresa and Meredith were prepared with easy to manage up-sell items in the form of delivery fees, chocolates and vases which many customers went for. This ended up adding a substantial amount of value to the entire deal for their respective businesses.
So start practicing now … “You want choccies with that?”
P.S. for some extra pointers from both Meredith and Teresa, please see the comments at the bottom of the original group buying article.
Written by Seamus – Tesselaar’s website manager and marketing nerd.
Photo by Marshall Astor
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