More customers paying full price

More customers paying full price.
“Full Price” image lovingly borrowed from the Massachusetts family music band by the same name. Click on the image to check ’em out.

If you’re a retailer, whether it’s with one or many locations, you want customers.

(Captain Obvious comin’ at ya live with that last sentence.)

But you should also have an expected average ticket price. Meaning, if you can count on, let’s use a round number, 500 people dropping in your store or restaurant on an average week day, you expect them to pay, on average, $X per transaction. It helps you forecast.

And that’s my problem with Groupon and the other large-scale daily deals sites.

When you run a Groupon campaign, you are destroying an important metric — whatever that average $X per transaction is — while thinking another metric will rescue it in the long-term — incremental improvement in traffic.

recent study (PDF link) suggests that it isn’t just short-term metrics that blow up. You’ve got discounting reputation issues coming into play — where new and existing customers begin looking at your venue as a discount-house. Geez Louise, that’s a major, long-term reputation problem.

You want more customers paying full price. With Groupon and related deals, what you’re getting is a tidal wave of customers paying a fraction of it — and expecting that deal-making mindset from your establishment going forward, while still demanding perfect and personalized customer service. And when they don’t get it? These socially savvy customers BLOW UP ON YELP ABOUT IT.

Your best bets are marketing initiatives that give you:

  1. Consistent new traffic, and/or
  2. Increased frequency of loyal customer visits, along with
  3. Little to no discount.

Isn’t that the holy grail?

(Insert your reply: “Duh. If only such a thing existed!”)

The answer is to provide a killer product, compelling customer experience, and wrap that up in a way where customers can share that experience with their social network. Ta da! It’s that simple! Just add water!

Maybe you need your own iPhone app with check-in capabilities. Maybe you need to more fully leverage Foursquare. And okay, I’ll just get it out there…maybe, if you’re a bar or restaurant with televisions, you just need to go the Buzztime route (see my About page).

These are partial answers though, actually. The bigger point: you need to think through this whole notion of partnering with some aggregator to promote your daily deals. You don’t want the hope for more loyal customers to be swallowed up by the fact that the ones you’re guaranteed to get with Groupon, LivingSocial, et al., will pay 75% less than the rest of your customers.

Leave a Comment