I’ve spoken to two sold-out crowds of business owners in Portland, Oregon, in the last year. Both times, I asked the audience to submit questions for me to answer. I’ve been shooting videos of my answers for a promotional series to run in Portland and Seattle over the summer and fall.
I’m testing a few out here to make sure I’ve got all the bugs worked out. The videos are short – an average of two minutes – and I’m including the transcriptions, too, in case you don’t want to stare at me. Who could blame you …
They’re going to be called Milestones for Small Business. Thanks to my new best friend, Mary Beth Garber, for the catchy name. : )
Click here if you can’t see the embedded video.
Question #1: What do you think about Groupon-type marketing?
I think very little of it.
You can do it. You can go to the internet and find success stories for just about anything, including Groupon-type marketing.
But remember the Harvard study on brand loyalty that cautioned you against marketing to people who Harvard calls ‘people switchable for reasons of price alone’ and who we call ‘transactional shoppers’.
Remember the defining characteristics of a transactional shopper:
- They think short term.
- They care only about the purchase they are going to make today.
- They love the process of shopping and negotiating.
- And the only thing they care about is getting the absolute cheapest price possible.
So what you are going to find is that Groupon-type marketing is that you are going to attract these ‘transactional’ or ‘switchable for reasons of price alone’ customers.
Remember what Harvard said about them:
Just as quickly as they will come to you, so, too, will they leave you just as fast.
Now if you want to use some sort of loss leader type strategy to lower the cost of customer acquisition, that’s fine, there are ways that we do that with our own customers.
But you don’t need Groupon’s help to do it, and you need to beware of who you are attracting with these type of promotions.
Love letters? Hate mail? Do I look like I’ve lost weight? I’d love to hear your thoughts!
Well said. Great Name – Milestones. Give that lady a nice night out at Outback or something – that is a great name!
Great little short video. Pithy!
I liked that you can read it, and hear you talking at the same time. I like to read that way, especially when I want to learn something. And… I always learn something when I read something you wrote.
My best to you my friend.
Mr C
Well Mr C took the words right out of my mind!
Well done and I couldn’t agree more. You definitely attract a whole different breed of customer with a loss leader. Since we are in the service business we much prefer and acutely aim for the relational buyer.
Thanks Tim,
Patty K.
I’m commenting as a Groupon customer. I purchase about one a month. I have never bought a coupon for a business I already do business with, but only with new businesses. It provides me a low risk way to try out a new relationship. Of the last six I’ve purchased, I will never go back to three of them, due to poor customer service. Of the other three, I’m now an established customer and have recommended them to my co-workers and friends.