We recently heard that well-known group coupon site Groupon was in trouble with its shares plummeting over 16%. Many would say that they saw this coming, especially if they were businesses who had used it and been disappointed by the lack of repeat business and loyalty.
Merchant’s frustration is easy to understand as Groupon and similar schemes offer small businesses a way to gain repeat business, but not necessarily a loyal customer base. Merchants generally have to offer heavily discounted loss-leading deals, great for Groupon, it’s users and consumers but it appears to be not great in building a loyal repeat customer base – precisely why many merchants offer the loss leader deal in the first place.
Indeed Robert Browne, KPMG’s Director of Pricing Strategy recently stated at a hospitality industry event that “cutting price has repeatedly been shown to not increase market share” and “offers are there to incentivize an action from a certain group of your customers.” He went on to say that discounting can drive volume but generally it damages value.
It appears that the Groupon type model of offering bulk heavily discounted deals aren’t particularly effective and that merchants often lose money providing discounts to customers who turn out to be one-time patrons only.
And that’s where the problem lies, building loyalty isn’t as simple as creating a big blunt discount – like many who’ve grown accustomed to deep discounts, people have become so obsessed with sales that they refuse to shop any place that isn’t having one. It has bred a group of ‘deal junkies’ that won’t shop unless they see serious discounts and constantly hop from one business to another, never going back twice – hardly the loyal customer base any vendor wants. And for the customer, these types of schemes biggest problem is that they promote bargains over building real value for the customer.
You can argue that the discounting model is flawed and not sustainable but is there a better way to do things? Well, we think there is.
Eventility offers businesses the ability to offer discounts and promotions directly to their own customer community on Eventility, but on their terms and to help them with their loyalty.
For a small cafe this may feel an impossible task, but with Eventility it’s not. For example, if the cafe has a regular quiet time on a Monday afternoon they can send an offer straight to their customer base (or target part of it) for a special deal at that particular time. Or, if they just want to reward their loyal customers by giving them 50% off the food bill, they can easily do this via their Eventility account and even send them a printable barcode voucher.
This way everyone wins – the customer feels happy that their loyalty is rewarded and is inclined to visit more regularly and the merchant gets loyal repeat business and can manage footfall peak and troughs more effectively. The café can also use a general discount to bring customers through the door, but they are in control and can turn it off whenever they like, safe in the knowledge that all customers who’ve claimed it are now in their customer database.
Businesses can take advantage of all the tools that Eventility has to manage and promote their business, events and offers better. These include: managing events and selling tickets, managing customers lists, customer communications, professional web pages, centralised social networking, email with tracking and much more. Plus Eventility gets places/venues, events, offers and photos on the web, on a map, on Google search, on mobiles and shared with our content partners. Now doesn’t that look like an easier way to build loyalty?
To learn more about how Eventility can help businesses have a look at what we offer you.
If you’re looking for what’s going on in your local area visit Eventility.