Unless you have been hanging out under a rock lately (no offense to those gutsy Chilean miners), you know that daily deal sites like Groupon and Living Social are incredibly popular right now.
For example, Groupon has sold nearly 14 million vouchers through their site since late 2008. It’s a strong model in a weak economy: Small business owners partner with these sites to offer deeply discounted deals on salon services, restaurant certificates, etc. The consumer gets a great deal. The business owner gains the opportunity to boost business by turning new customers into repeat business and word-of-mouth advertisers.
It’s a win-win situation for everyone.
Or is it?
Several weeks ago, The Oregonian featured an interesting article tackling this topic, Coupons Come With Downside: Consumer Bullies.
- A consumer bully is one who knowingly misuses a deal or coupon for their benefit.
- When dealing with consumer bullies, businesses are often stuck between a rock and a hard place. If they deny service, the disgruntled customer becomes a vocal opponent of the business. Whether it’s by word-of-mouth or some online forum, bad reviews hurt business. It’s often easier to give the pushy customer what they want.
- Many businesses are happy with the social buying model. It brings in new customers and new money. Many owners also attribute voucher misuse to first-time buyers.
- Companies split the Groupon amount 50/50. It’s the classic loss leader to get you in the door. Smaller businesses are taking a gamble on repeat business and consumers willing to spend more than the voucher.
A follow-up article also offered some interesting observations : Social Buying: Fun for Customers– Not Always a Blast for Businesses.
- According to researchers at Rice University, deals on social buying sites are more beneficial for consumers than business owners.
- In a survey of 150 businesses, they found 40% of businesses who partnered with a Groupon-style site would not do it again. This number is in contrast to the 95% satisfaction rate that Groupon advertises.
- “Because the Groupon customer base is made up of deal-seekers and bargain shoppers, they might not tip as well as an average customer or be willing to purchase beyond the deal,” Dholakia said. “So employees need to be prepared for this type of customer.”
Did you catch that? According to this professor, deal-seekers are lame tippers. [According to 100% of waiters, lame tippers are lame customers.]
Over the last several weeks, I have been thinking about how these articles apply to couponing in general. I love couponing and Grouponing, but I think there’s always room for improvement in the way I do both. I realize I am preaching to the choir here, as the vast majority of you in the FLNW community are quality couponers. I can just tell these things. However, for the sake of discussion, here are my two cents on the topic:
:: Many people equate being frugal with being cheap. I used to be one of them. One of the biggest hang-ups I had about couponing was that I did not want to be seen as stingy or miserly, haggling over $.75 on a box of cereal. I think the only way to change that kind of thinking is to save $.75 on a box of cereal so we can turn around and drop it in the Salvation Army bucket instead.
:: Cashiers and managers and waiters and stylists appreciate kind customers. Lately, I have realized that I am too busy shuffling coupons or bouncing babies or checking my receipt to really notice and appreciate these people. Think of the last time you ate at a restaurant. What was your server’s name? When you checked out of the grocery store yesterday, did you make eye contact with the teenage boy who bagged your groceries? I am trying to do better at this.
My husband is a great role model. Whether we are checking out at Fred Meyer or Home Depot, he always refers to the cashier by their first name : “Thank you, Carol.” I used to give him a hard time for doing this; it always felt a bit silly and too personal. I stopped when I realized the impact it had on the Carols out there. It always catches them off guard. They smile. They make eye contact. They are pleased to be noticed. Seriously, try it.
:: Poor behavior by one couponer impacts the transactions of everyone else. How many of you have handed a cashier a stack of coupons, only to have them respond with something like, “Oh, you’re one of those couponers…” Some cashiers have been burned by pushy couponers. If your coupon beeps, be gracious. If your transaction fails, be cool. If you are using a deal voucher, be honest. It will make life better for the next couponer.
:: Businesses should be seen as service providers, not opponents. Maybe it’s just me, but when I walk into a grocery store with my coupon envelope, I often feel this rush like I am entering a competition against the other team. If my coupon scenario fails, they win. If my transaction works, then I win.
How many times do we push the coupon envelope, trying to “beat” the company at their own game by ignoring the fine print or expiration dates or transaction limit? Saving money and being a good steward of our resources is a responsibility, not a right. Business owners don’t “owe it to us.” Their responsiblity is to run an honest, profitable, productive business. Our responsibility is to support those who are doing it right. If we can save money in the process, then that is just a sweet bonus.
Comments? Thoughts? Opinions?
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