Do Daily-Deal Sites Like Groupon Work for Local Businesses?
LivingSocial, Amazon Local, and small companies
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Other businesses cite concerns over cheapening their brand as a reason to avoid daily-deal offers. Restaurateur Marc Tessitore, owner of nessa in Port Chester, felt that way after trying LivingSocial once. “I will never do it again. It attracts bargain hunters, not serious diners, and it confuses and annoys your staff,” he says.
And though she’s run successful promotions with Amazon Local, Lenore Eggleston from the Philharmonic worries that using daily deals too often can set up an expectation of a discount that could prevent people from buying tickets at full price. “I don’t want people always waiting around for a coupon. I wonder if we are cheapening the tickets and the product by putting these offers out, and I’m not convinced it will actually translate into future sales,” she says.
Chiagouris shares her concerns. “The only way to ensure repeat business from these customers is to offer something so wonderful that they will want to come back again and pay full price,” he says.
That is Wendy Vigroux’s approach. “My job is to make these customers’ first experience at the studio so great that they want to keep coming back,” says Vigroux, who has advertised numerous yoga and Zumba deals on Groupon, Amazon Local, and LivingSocial. Running an offer bumps her class size up by as much as 75 percent, and she typically retains 20 percent of the people who purchase the deals.
Vasken Demirjian also counts on superior service to turn Groupon users into repeat customers—with phenomenal success. His salon has seen a whopping 74-percent retention rate from the thousands of Groupon users who have bought offers. “When they come to our salon, we give them such high-quality service that they can’t think of going anywhere else,” he says. Demirjian’s last offer sold out at 1,000 haircuts, netting the salon $20,000 from Groupon, and, to date, its Groupon customers have brought in an additional $44,000 in business.