Online Coupons For Business: “Getting the Word Out” Fallacy

Bob Phibbs By

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[This is an excerpt from my book, Groupon: Why Deep Discounts are Bad for Business]

In this section, we take aim at one of the most frequently quoted fallacies about using such sites for your local business.

“We couldn’t get that type of publicity” is frequently seen in testimonials by business owners on these online discount sites. It’s the old saying that any publicity is good publicity.

Right. Tell that to BP or Toyota...

No, bad publicity that you didn’t have enough wait staff for the crush of people who came in with their BOGO or enough product you advertised at an unbelievable price or mediocre food gets you nowhere to building your business.

In fact, it hurts you...

How To Service The Crush?
Sitejabber.com had a comment from Robert F, “Moore Massage does indeed charge $95 for an hour of hands-on therapy. Groupon’s $45 discount is such a deal. It was such a deal that a claimed 1002 groupies punched their ticket. Methinks they’re now victims of their collective enthusiasm, not to mention Groupon.com’s and its partner’s greed. To wit: it would take Moore’s massage mavens 41.5 days to administer 1002 one-hour sessions—provided they provided the service 24 hours a day.

By the same token, 546 cooking class attendees? How long will the Cape Ann Whale Watch work its way through 2557 tickets? In other words, even if Groupon isn’t a scam, it is. What do you call it when you pay money for something up front that you can’t access within a reasonable amount of time?"

Here's why Groupon and other online discount site customers' discontent is so bad...

Users can update a few taps on a Facebook, Foursquare, Yelp, or Twitter account. And they will. Remember, they had to tell at least 50 friends to get the deal. Anything wrong, and they'll do the same.

 

Reality: Business is Work
Much like after 9/11, we are in a different environment than many of us have ever faced. We can’t hide from the truth – business is work.

A marriage is work.

Raising kids is work.

We see what happens when people don’t take care of those things.

When you’re in denial about your business, the financial results can be devastating. When it closes, everyone sees what the owners should have seen.

Some business owners I read about seem OK with hoping for better days using a “deal.”

But isn’t that fairly naive? Nothing changed about the way they do business. For them, I’d suggest now is the time to take off the bib and get to work making your business better, not indulging Groupon clippers with "Santa Claus" marketing.

This is an series on Groupons and their ilk, discounting, and couponing in general, and why they are all so damaging to your business. That's whether you are a large brand like GAP, a regional chain, or a local independent retailer. Here are the previous posts in case you missed them:

Bob Phibbs, the Retail Doctor®, has helped hundreds of small and medium-sized businesses in every major industry, including hospitality, manufacturing, service, restaurant and retail. He is a nationally recognized retail business strategy, customer service, sales, and marketing expert. With over thirty years of experience, beginning in retail trenches and extending to senior management positions, he has been a corporate officer, franchisor, and entrepreneur.