Tag Archives: Groupon

If first impressions count, then what are you telling your customers?

Have there ever been more options for pricing than there are today: one day deal sites, online pricing, freemium, optimised pricing, auction sites are just a few of the possibilities for setting a price, and an impression. So if first impressions count, then what are you telling your customers?

But of the four P’s of marketing, price usually receives far less thought than the other three. Not only does the price of your product or service say so much about what you are offering but it’s so important to your business’s survival.

If you have a new brand getting the price right is often very difficult. And while there is some room and time to fine tune things the longer the price remains unchanged the harder it will be to adjust customer’s perceptions.

Your business may suit being involved in an auction site where people bid for seasonal products e.g. Buystand. Alternatively you may have a more perishable product in which case there’s a real benefit in selling each days ‘stock’ for the best overall profit you can. That’s where price optimisation can help. One company who work in this area are Pricetech.  Their tagline appeals to me and gives you an indication of what to expect: revenue management and profit optimisation.

One thing’s for sure is that there will always be people willing to pay for the best, or even just willing to pay the most. This applies to houses, equally as it does for hotels, services, food, electronics … you name it. So depending on your product I’d always suggest seeing if you can get the highest price in the market. If your market share ambitions, brand, and the other elements of your marketing mix allow could you have a sustainable business by pricing as the most expensive? If not what’s involved to get there and how feasible is it?

But actually, you don’t have to have the highest price to get people wanting your brand. The point is that matching your price with the rest of your marketing mix will ensure satisfied customers even if customers pay very little for what they buy from you.

What about giving your product away? In the software game it’s called ‘Freemium’. One of the best articles about Freemium why and how comes from Techcrunch. On a similar vein I share thoughts in an earlier blog about Goupon type offers.

Go 2 Market principle: create the right impression with your customers by ensuring your price matches the rest of your marketing mix. You’ll create a positive impression with your customers and your bottom line.

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How to get the best deal

Daily deals are here to stay. Last time I looked there were 69 online daily deal sites. We’ve probably all bought something from one of these sites and they can offer very good savings.

Daily deal sites require an attractive offer usually a large discount. The site takes up to 50% of the price the customer pays, so you are left with a minimum of half of the advertised price. Non redemption helps to pull back some profit, but you can make it work for you.

I know of one business that is using daily deals quite intelligently to generate bookings at down times. They have very little variable costs so the extra discounted bookings are better than nothing. But others haven’t got the strategy right and lose money. So think about your purpose, for example:

• get add on sales e.g. fries with the daily deal burger, driveway wash after a house wash
• get repeat business e.g. show how good you are to get them back again
• increase awareness e.g. new businesses or new products/services
• sell off excess stock that will expire e.g. seats/tickets to an event, food
• sell more of the same product/service at your standard rate after the limit has been reached
• sell your product or service to other markets e.g. out of town or another country.

Daily deals can help you improve your profit e.g. selling into new markets, full priced products, or distress stock. Or increase awareness, with the total discount on the daily deal discount being the same as you would have spent on advertising.

Don’t believe you are immune from these daily deal sites. Groupon in the US offered would-be teachers nearly 60% off tuition for an entry-level graduate teaching course at National Louis University. A daily deal site in New Zealand offered electricity, and some of your competitors may run their own specials promoting them through less costly channels such as Google Ads.

Lastly, if you are selling a daily deal you need to make sure that the offer is clear, and fulfilment is at the level expected. Research indicates daily deal customers are either more critical, or the fit between the retailer and the customer is more tenuous than with existing customers. So increase your chance of repeat business by ensuring the daily deal customer feels that they got what they expected.

Go 2 market principle: daily deals are a channel that you should consider as part of your channel strategy. You may not use them, but if you do, use them intelligently to help your business grow.

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