Converting those one-time Groupon customers to regular customers

If you've had a Groupon offering, or are thinking of having one, you MUST develop a strategy for maximizing your customer relationship. First rule of thumb: Do not take what the sales rep gives you. They will tell you about all kinds of deal structures that have worked really well in the past, and that you should follow one of those past models. Keep in mind, Groupon needs to sell as much as possible today so they can pay for yesterday's merchant deals. Consequently, they'll look for quantity over quality. Last thing you want is for a Groupon customer to run into your business, snatch the deal, and then disappear into the dark alleys, never to be seen again. This is quite common.

Second rule of thumb: You are on your own. Groupon and other group buying sites, will NEVER share their email address list with you. That list is the very foundation of their business, they've paid big bucks to build it, and they're not gonna give it up, even the addresses of those customers who bought YOUR products through them. Groupon is not interested in helping your business thrive, even though they pitch you this way. They are interested in selling your products and getting their commission. In and out, drive-by style. Getting those customers to come in again will depend on you. You'll need to reach down into that entrepreneurial mind of yours to come up with a solution.

So, what can you do to ensure that a Groupon offering will actually help you in the long run, rather than simply provide you with a big wave of money-losing customers for a short time?

Think about how you will structure the deal. And track your customers. The former has to do with business. The latter, technology.

MaggieMudd ran a number of group buying deals. One of the products the company sold was ice cream cake. The product was sold online, and could be completely tracked. It was delivered, much like pizza, but purchases needed to be made 24 hours in advance, as all cake sales were custom made.

Anecdotal evidence pointed to the development of new customers from cakes that were delivered to Groupon customers. Typically, cakes served anywhere from 6 to 150 people. This meant, they were mostly only appropriate for parties. Consequently, new people were introduced to the product, and thereby became new customers. And paying customers, too.

It's hard for technology to track this behavior, but it's not hard for a merchant to set up a deal with this in mind. If you can design a deal that will REQUIRE your customers to come back again, or even better, to bring their friends, you have a better chance of growing your base.

Using technology to track your customers, and communicate with them, is not a new idea. I'm sure you've been into a Borders store, and were asked about your Borders rewards account. Lots of stores do this.

In this case, MaggieMudd did a double-punch. They required all Groupon originating purchases to be done online. As a result, they were able to collect the Groupon email address list on their own, and leave something with the customer. Utilizing the Gift Card Manager in conjunction with their online ordering system, they were able to convert customer balances into digital gift cards which customers could use later.

The image here will probably make most merchants cringe. Using a deal voucher, the customer now is owed $8.51. After already having a 50% discount.

To give Groupon and others credit, they do not require you to give money back to the customer in this case. Instead, customers need to use the entirety of the voucher, or forfeit any positive balance.

But why not just keep a balance and leave a calling card, i.e., digital gift card,  instead? And while you are at it, encourage the customer to opt-in to your own deals list? If you can do all of this, then you have a better chance of converting those customers into return and even regular customers.

While it's true that many businesses will not have a model that lends itself easily to online ordering, there is always an opportunity to using technology to gain their loyalty. It starts with getting that email address AND managing that email address. After that, you can do all kinds of fun things, like email promos, random drawings, 50% off deals, and so on. If your business does a 50% off Facebook deal, for example, and a former Groupon customer from your email list picks it up, you are better off because you don't have to pay any commission.Simple bottom line fact.

Manage your own digital gift cards for FREE. Click here.

Start collecting email addresses from your own site for FREE. Click here.

Google, Bing, Yahoo are the paparazzi, you are Paris Hilton (i.e., your new SEO strategy)

No doubt you've received the emails. They typically start something like this: "You have a really good website, but we notice you are not placing very high on search results." The next phrase is then a pitch to engage the company or the individual on search engine optimization services, also known as SEO.

I'm not about to suggest that you disregard any SEO services. Instead, I'm asking you to think like a search engine before you begin the process of defining your own SEO strategy.

Years ago, I used to work at a search engine company called Infoseek. Not many people remember much about the company, except what seems to me to be a handful of silicon valley veterans. But Infoseek was definitely considered a search pioneer, and like many pioneers, they are soon forgotten. The company was eventually swallowed up by Disney Interactive, changed to Go.com, and then shuttered very soon thereafter. Now Go.com is powered, ironically, by Yahoo.

The big question was, how do I get better search results for my website. Companies like Infoseek and others had submit-your-site forms, and meta tags and meta keywords were thought to be very important. There were some no-nos, like making text color the same as the background color of your site. If you did this, you were tagged as a spammer and potentially banned.

But search engines today are more human, in a way. Meta tags, while helping a search engine to arrange your content, doesn't help much by way of getting you noticed. Getting noticed, that is the top goal.

Remember when Paris Hilton was all the rage, when she was in every one of those gossip rag mags that you pick up on the grocery store shelf while waiting in line? Why do you suppose she had so much exposure at the time? Because people loved her, hated her, laughed at her?

The answer is that she was available. In other words, because she was so active in public, the paparazzi had an opportunity to take pictures and journalists to write articles.

Combined with outrageous behavior and total availability, that is when the press coverage starts. And you can't go anywhere in public or on the Web without reading something about your celebrity du jour.

Take this attitude towards SEO. There are two rules here: You need to be active on the Web and you need to provide opportunities for search engines to notice you. How do you do this?

Provide plenty of content. This is why blogging is so important. And provide new content often. Do lots of social networking. Eventually people will talk about you more on public forums. If you have a business, get rated by your customers on Yelp. Put yourself on directories. Post pictures of your products in Flickr and other photo sites. Have a site that search engines can "read", with real, relevant content. Do stuff that people notice and then make yourself available. In short, get people talking.

Get your own proof about group buying sites

No doubt, if you're a merchant or you own a small business that provides some kind of service, you've been approached by one of those group-buying sites. Better known as Groupon, Living Social, Town Hog and the like. Or, maybe you thought it would be a good idea to offer up a deal so that you can improve your visibility. After all, these services are offering you advertising to a fairly large group of people. But the advertising is not
free, and these group-buying services typically take 50% of the revenue from sales as their commission.

Before you jump into a deal like that, always make sure of one thing: Make sure that you are dedicated to tracking the overall performance of these deals. Make sure you are getting your money and your labor's worth, because when a Groupon or Living Social deal hits, it's gonna hit you hard.
 
The sales people who try to sell you into a deal of the day will always tell you that you'll get plenty of return customers. Even customers, when presenting you with a 50% off voucher, will tell you that they will be coming back.

I only have one thing to say: Don't you believe it. Instead, get proof.


The screen shot above is part of a page in an ordering system we developed at MaggieMudd. Notice the "G" icons. These stand for orders that were made specifically with Groupon deals. There are different icons for different types of deals, like those originating from Facebook or Twitter posts, to other deal sites like Townhog or LivingSocial.

Now look at the orders that have the heart icons. These heart icons represent purchases made from customers who made other purchases in the past. Notice the one who made 16 purchases in the past! Notice also that most repeat purchasers do not have Groupon or any other deal icons next to them. Except one. And if you click on the heart to look at the history, the past purchase of this particular customer was also purchased with a Groupon deal. Groupon and other deal of the day sites let you buy multiple vouchers.

If you could browse around, you'd notice some remarkable things. Groupon customers are not typically repeat customers unless they have purchased with another Groupon deal. MaggieMudd did a lot of deals during a year, and sometimes you would run into customers who made multiple purchases with multiple types of deals. So, they'd buy one thing with a Groupon one month, a TownHog another month, a LivingSocial yet another month. Which indicated they like the business, but just didn't want to pay full price.

The big question is, did a deal of the day offering pay off in the end? Was it good marketing, because chances are, you were losing money on these deals, which ask you to take half off your product or service, and then take half of that for their own commission.

If you can get the data, then you can know, and whatever you can do to track these deals, the better off you will be at the other end. In the case of group buying sites, more customers for you does not necessarily translate into more profits for your business.

Your website introduces you to the world, but also the world to you.

We all understand the benefit of having a great website. With it, you can introduce your products or services to your potential customers, wow them with pages that pop, basically show them what you've got.

But this is really just the beginning. Websites can also be smart, and they can tell you a lot about your audience. All websites come with logs that tell you something about the activity that happens on your site, like what are the most popular pages, how are people getting to your site, e.g., from which search engines, and from what countries.

These are definitely useful, but how can you delve in even deeper, to see how people are using your site in particular, how they are navigating through your pages, where they start, where they end, and what they are really looking for.

A transactional process on your site is very helpful, because this is where data is captured. What is a transaction? It can be anything that requests something more from your visitor, like a contact form, a search bar, and best of all, a purchase.

For example, if you could set up a search function on your site, and capture search terms, users, times of day, referring pages, and so on, you can get a good idea about what a particular user is wanting from your site. Each session can be a little story, and this gives you insight into your user base.

When we implemented the MaggieMudd e-commerce solution, we developed a particular functionality that tracked users from Facebook and Twitter updates, through the site, to a final transaction. The order management system would indicate a "Click Stream" which would describe the path the user traveled on their way to buying something. That is what you call insight. Designers and developers who are interested in user interaction would kill for this information.

Why merchants need technology

I've been a merchant in my past. So I can understand how a small business can be crunched in so many ways, in terms of time, money, and resources. You only need to talk to a small business owner to feel the strain. By the end of the day, so many things needed to be done that it almost makes your heart sink.

As a merchant who had a technology background, I somehow found the time to develop applications that would help me with my business. Applications that would help me with workflow, order management, customer communication, and even gift card distribution. I needed applications that all the staff could access, make adjustments, and communicate those adjustments to the relevant parties.

One of the biggest problems we faced was simple and honest errors. When you track orders with a clipboard tacked to a cork board, you're just asking for trouble. Someone calls in to make a change, that change is scribbled on a paper, and then it's forgotten. The customer is upset, and suddenly refunds are in order. As a merchant, I *hated* giving refunds for simple, avoidable errors. Because the products we made were difficult to produce, difficult to deliver, I felt our labor was wasted.

I'm sure any merchant out there will agree. Technology can help a company to avoid errors and increase efficiency, improve communication with customers, and keep you always informed about the status of your business. In my opinion, technology is the heartbeat of a business, which keeps products and services flowing.

Technology is not out of reach for merchants and small businesses. Technology that is truly useful. For example, we are offering our Digital Gift Card Manager application for FREE to merchants right now. If you want to avoid having to pay the credit card companies swipe fees and monthly fees and card fees, then you need this application. Customers will appreciate your green approach to helping reduce the amount of plastic in the environment. And with so many people on smartphones, it's easy for customers to find a digital gift card and present that to you when making purchases. Just go to http://www.coscient.com/merchant to get a free account. We'll set up a personalized secure portal and design a template with your branding for FREE.

E-commerce, email marketing, promotions, orders, all of these can be managed online to make your life easier. At CoScient, we can do this. Check out our website at http://www.coscient.com.