I’ve had a few people ask me about this over the past few weeks, and thought it would be useful to add it here also. This is a case study of a Groupon voucher deal I ran for a client in 2011, which I think is still relevant today.

This was featured in the Irish Business Blog Bloggertone (now called Tweak Your Biz) on June 15th 2011, and in the Sunday Business Post on June 27th 2011 as an example of a successful Groupon marketing campaign (there’s a subscription required to see the Sunday Business Post version)

If you’ve ever thought about running a Groupon deal (or other voucher provider) to try to generate some additional business, then have a  read, and as ever, comments welcome below.

Here goes:

Background:

Derrynoid Centre was a Conference & Training Centre with 40 en-suite rooms, restaurant & bar, leisure suite, nestled within a 250-acre forest in Draperstown (right in the middle of Northern Ireland)

The problem:

The main customer base had historically been groups for conferences & training in the business, community and voluntary sector, with the subsequent spin-off from these groups for the accommodation / restaurant / bar.

On analysing occupancy rates I found that the centre followed the pattern for Northern Ireland B & B Occupancy rates, except for during the holiday periods (in particular Summer and Easter). During July & August 2010, the NI Average occupancy was 43% and 48% respectively, whereas theirs dropped to 6% and 10% in comparison, due to an over-reliance on the Conference and training market.

The objective:

They wanted to promote their B & B business to the tourism & leisure sector, as they were ideally suited to that market, and it would also allow them to even out the seasonal fluctuations in demand in the conference / training sector.

To address the imbalance, it was identified that they had an excellent product offering, but their issue was one of limited brand awareness.

We identified Groupon as a vehicle for reaching a large audience very quickly, with an immediate impact.

After researching the downside of this type of voucher offer, I was confident of making this work, and sat down with the client and set the objectives for the campaign:

1. Raise awareness of the facility within the B & B market in NI
2. Retain the ability to upsell any customers who booked through Groupon
3. Develop a customer retention program for all Groupon deal purchasers to encourage a second visit.
4. Encourage TripAdvisor reviews to further enhance our marketing opportunity, and brand awareness

The deal:

Upon contacting Groupon, I was impressed and found them to be extremely professional – they are a well-oiled marketing machine. With their help we put together a deal (see graphic above) based on an experience for customers (Dinner + Wine + Bed & Breakfast).

The discount was set at 61% (their minimum for our sector is 60%), which with their fees (50% + VAT) left the deal just below break-even point for every voucher sold, but which the client were prepared to do for the new customer acquisition.

The deal was set so that if someone wanted to come here and not spend anything else, they would have a really good experience just with the Groupon deal.

However we anticipated that a percentage at least would have such a good experience that they would spend extra on further wine / drinks / dessert / extra nights accommodation, which is exactly what happened (see results)

We built in several opportunities for upsell during the customer journey (which did not attract the Groupon commission, so they retained 100% of this income)

1. When they rang to book, they were offered a second night at a discount rate
2. The meal included a glass of wine, any further drinks were additional
3. The meal was 2 course starter and main – dessert was additional
4. When they checked out they were asked for their email address, and told by check out staff that they would receive an offer to come back for a second visit. The majority were happy to receive this, and the re-book rate worked well for the centre.

After also reading the horror stories of other offers (on both the business side and the customer side, we decided on the following:

1. We would be as prepared as possible for an increase in call volume when the vouchers became active
2. There would be no restrictions as to when voucher holders could book (midweek or weekend)
3. Every Groupon voucher customer would be treated exactly the same as a full-paying customer

The live day:

The deal started 8/3/11 as a side offer and trundled along nicely, selling approximately 2 per hour. During the day it then moved to be the main feature, and then started to really move – ending up selling 426 vouchers by the time the offer closed, with which we were all delighted.

The voucher active day:

The vouchers became active on 11/3/11, and the phones rang off the hook for 2 days (nice problem to have but I was conscious that this was one of the main bugbears of voucher buyers – that they can’t get through to make their reservation). The Reception staff worked very hard returning a lot of answering machine messages during the next few days to try and ensure everyone was sorted.

We put a very simple system in place for collecting the various reference numbers required, and forwarding them to Groupon regularly to make the claim for reimbursement. They paid vouchers for holders who have made a reservation within 5 days of claim, and I found them to stick pretty close to this (maybe a day or two after, but no later)

The review:

At the time of writing (June 2011) they had an 88% redemption rate on the vouchers, most of whom had completed their visit. They had taken an average of 31 Groupon vouchers (i.e. 62 customers) per week since the offer went live, and their bar and restaurant takings were up by 26% over last year.

• We added virtually every Groupon visitor to a newly created email database to receive further offers, and upon the first email offer to these subscribers, they had a 12% uptake for these customers to book again to revisit (at that time according to Groupon, the average re-book rate was 2-3%)
• Before they started we had 1 review on Tripadvisor, at time of writing there are 21 and counting, with the vast majority being very positive.
• As another benefit from the offer, several of the Groupon guests were members of various large organisations who use off-site conference and training facilities, and the client are now able to pursue these much more effectively than they would if they had to start with a cold call.
• Some people came and spent nothing additional and had a good experience. If you’re going to go down this avenue, that will happen. However many came and spent more when they were there. The average additional spend per voucher was £27.50
• All in all Groupon worked very well and achieved all the objectives we had set. It can be extremely effective at delivering a huge amount of extra customers, but you just need to have a clear strategy as to what to do with those customers when they visit, and then afterwards to make it work for your business.

(We have just completed our second Groupon voucher offering, where we sold 255 vouchers in 2 days (slightly higher price this time). This time we learned from our previous experience and Groupon set in place for us an online booking system for customers’ convenience so that we wouldn’t have the huge call volume and frustration at not being able to get through.)

 

Johnny’s both nervous and excited. He’s on his way to his first date with Amanda, and the butterflies in his stomach are doing cartwheels. He has the flowers bought, he’s wearing his favourite shirt, and there’s a very nice restaurant table with his name on it booked for 7:30.

He arrives at Amanda’s front door and manages to get the butterflies in his stomach to fly in some sort of organised fashion as he rings the doorbell and stands back to wait.

The door swings open and Amanda appears before him. “Wow!” he thinks and hands her the flowers, stuttering “You look gorgeous”

Dinner goes well, conversation is great, and as they are waiting on dessert to arrive, Johnny takes a deep breath and asks “Look, I know it’s our first date, but let’s get married”

Amanda’s mouth drops open, and awkward silence and stuttering ensues, but she manages to get her thoughts together and reply “Let’s get to know each other first”

What she’s really thinking is “Get me out of here!!”

Too much, too soon.

Let’s apply the same thinking to your website – when someone arrives at your website, are the only 2 options to buy or leave?

If they are, then unless you’re marketing a low-value / mass-market / impulse buy product or service, you should have an option for those visitors who aren’t ready to buy yet, but might after they get to know you.

And this is especially true if you offer any sort of consulting service.

What if you offer them something in exchange for their name and email address? Build a list of potential clients who are interested in your product or service, and build a relationship with them over a period of time?

One way is with an e-book / free report / white paper. Identify who your ideal customer is, and then figure out what their burning questions are about your industry.

For example. let’s say you’re an orthodontist. You create beautiful smiles for your clients. Your know your ideal client is someone who earns above x, lives in a certain postcode area, cares about their looks, etc

You may already offer a free first consultation to try to get me as a potential client through the door, therefore my choice on your website is either to come in for a free consultation, or leave your website and (probably) not come back.

But what if you went a step further? Offer me as a visitor to your website a free report including lesser known tips on improving my smile / pointers on how treatment will benefit me / things I didn’t know about teeth straightening / etc. And I can download it just by entering my first name and email address.

Then I have a third option if I’m not quite ready for a consultation yet, and I’ve also got something I can easily read in my own time, and I haven’t made a commitment to do anything.

You, on the other hand, have got an email address for someone who’s pre-qualified themselves as being interested in your services, and (after the initial set-up) it didn’t cost you anything, or take up any time for you or your staff.

You can now start to build a relationship, send more useful tips, send me an e-card at Christmas / Easter / New Year / etc, and I can get to know you better. Become familiar with your brand.

Then maybe we can look at taking it a stage further!

 

To you, your business is probably one of the most fascinating things in your life. As an SME owner you most likely live, eat, sleep and breathe your business, and you could talk about it all day long.

Just in case you’re under any illusion that it’s as fascinating to other people, then I’m sorry to burst your bubble.

It’s not.

And neither is your web site.

In these days of a huge level of online “noise”, there are so many others competing for visitors attention (and, ultimately, business) your website should do a lot more than just tell people who you are and what you do. It should go a bit further and actually do a job for you.

It needs to be “Sticky“, and it needs to pass the “WIIFM” (What’s in it for Me?) test

It should:

1. Grab their attention
2. Keep them there for a while
3. (Ideally) get them to leave their details as someone who is interested in what you do.

So how do you do that?

Well, it depends on your business, but some examples of what you could do are:

• Special web-only offers / discounts / coupons

• Don’t make your site all about you – if your home page reads something like “We’ve been in business for x years and we believe in delivering quality customer service every time . . . etc” or something similar, you probably need to change it – remember WIIFM (by all means have that on your “About Us” page.

• Have content on your site which is related to your business (for example:

HR consultant? – possibly articles & advice about current HR issues;

Accountant?  – again, articles & advice about tax returns or accountancy developments

Marketing consultant? – articles & advice about how to market better ;-).

Make it of use to the reader, and not a sales pitch for how great you are (remember the “WIIFM” test)

However no 3 above is, I believe, the most important job your website can do.

You probably have a measurement of the number of visitors to your site on a regular basis (or if you don’t, you should), and if so, you’ll know that you have x number of visitors per month.

When they visit your site, look around and leave, do you know who they are?

Do you make any attempt to try and get their details?

If not, then it’s a bit like going to an event and meeting lots of business people and not getting any of their business cards. Effectively the relationship is over, unless you happen by chance to meet again.

Same for your site – why not at least try and get some of your visitors to tell you who they are? If you give people enough of a reason to leave some contact details, then a percentage of them will do so.

Take my site, for example – if you have a look on the right hand side you’ll see that you can download a free e-book “7 Small Business Marketing Mistakes you may be making right now, and how to fix them” – if you enter your first name and email address, confirm your request, it’ll be sent to you straight away, free.

There’s no catch, no hard sell, you won’t get spammed, and hopefully you’ll find something in there which will help in your business. You can even download it and then unsubscribe straight away if you wish, and you won’t hear from me again (although I can’t think why you’d do that – then you’d be missing out on all this marketing wisdom! ;-))

Can you translate that to your business – is there anything you could allow your website visitors to have if they leave their details?

What information would it be useful for them to have that you can provide in exchange for their email address? (remember the WIIFM test – it has to be useful for them)

Could you put it in e-book / video / podcast or some other digital format?

If you can do that, then you would be on the way to gathering the details of some of your website visitors, rather than have them visit your site and then leave without saying hello!

By Aidan Breslin – Google+