Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from...

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Kick Groupon to the Curb: The 4 Truths of Online Marketing Presented by PFL Seth Gardenswartz Kurt Rued

Transcript of Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from...

Page 1: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

Kick Groupon to the Curb: The 4 Truths of Online Marketing

Presented by PFL

Seth Gardenswartz Kurt Rued

Page 2: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

Dawn of Groupons (and Clones)

Ø  Brand for deals Ø  50+ million subscribers Ø  22 million Groupons sold in North America Ø  Over $980M discounted in North America

Page 3: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

Dawn of Groupons (and Clones)

Ø  It’s a coupon with a hi-tech twist Ø  Legitimate discounts, big and real Ø  Time limit and group dynamics Ø  Pay up front Ø  Opted in clients

Page 4: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

Deal Sites – Growing Like Weeds!

Page 5: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

Deal Sites – Also Dying Like Weeds!

Page 6: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

Merchant Benefits?

Ø Help or harm participating merchants?

Ø Risk of legal exposure?

Ø  Subject of several investigations

Ø  Some class action suits, participating merchants have also been sued

Ø  Is the model sustainable?

Page 7: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

The Dark Side of Group Deals

Ø  Attracts the wrong clients

Ø  Negative margins

Ø  Inundates your staff

Ø  “Tramp-stamps” your brand

Page 8: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

4 Truths of Online Marketing Success

1.  Deal sites are dangerous 2.  Focus on your website for best ROI 3.  Must build your own relationships 4.  More relationships = more profit

Page 9: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

Truth 1: The Economics of Directory and Coupon Sites

§  Review sites: Yelp, CitySearch, Urban Spoon

§  Coupon sites: Restaurant.com, Valpack

§  Daily Deal sites: Groupon, Buy With Me, Woot They use your content to develop their own customer relationships, so they can sell them to you!

Page 10: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

LaPausky-v-Yelp

Page 11: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

LaPausky-v-Yelp (cont.)

Page 12: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

How Much is a New Customer Worth?

Ø  $100 Average check

Ø  3 visits/yr per regular customer ~ $300/year

Ø  20% customer attrition rate (retention 69-79%)

Ø  $806.78 lifetime sales value per client

Ø  $40.34 lifetime profit per customer (807/5%)

2010 NRA Restaurant Industry Operations Report Restaurant RX 2010 Fine Dining Report

Page 13: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

Groupon Numbers

To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K loss divided by 5% Net Profit)

Even if you believe you will convert 20% into new clients you are still $2,276K in the hole after 5 years

Page 14: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

Daily Deal Effectiveness

Dholakia, Utpal M., How Businesses Fare with Daily Deals: A Multi-Site Analysis of Groupon, Livingsocial, Opentable, Travelzoo, and BuyWithMe Promotions (June 13, 2011). Available at SSRN: http://ssrn.com/abstract=1863466

36%: Deal buyers that spend more than deal value 20%: Deal buyers that return for a full price purchase Less than 50%: Businesses willing to run another daily deal promotion (lower among spas and restaurants)

Page 15: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

Truth #1 (cont’d) Groupon Dims Your Stars

•  Deals lead to 10% decrease in Yelp Rating according to Harvard study

http://arxiv.org/pdf/1109.1530v1

Page 16: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

If You Must -- Tips For Groupon Strategy

Ø Timing is everything Ø Manage margins Ø Understand cash flow Ø Prep your staff Ø Plan for regulars Ø Harvest emails

Page 17: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

The 2nd Truth: Internet Marketing Begins and Ends With YOUR WEBSITE

Your site is the Anchor to your digital identity

Page 18: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

The 2nd Truth: Internet Marketing Begins and Ends With YOUR WEBSITE

Page 19: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

theoatmeal.com/comics/restaurant_website

Bad Websites are Prevalent

Page 20: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

theoatmeal.com/comics/restaurant_website

A Better Look at Bad

Page 21: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

Keys to an Effective Website:

Ø Can be found (SEO) Ø Intuitive navigation Ø Easy to Share Ø Mobile Friendly – No flash, music or distractions Ø Engages online consumers with content Ø Reflects your brand Ø Check out our last webinar:

Ø http://www.printingforless.com/blog/business/how-to-build-a-profitable-website-webinar

Page 22: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

Effective Websites Rely on Content (Not Flash)

Page 23: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

The 3rd Truth: Develop Your Own Customer Base or Someone Else Will

Your Options: Ø Rent a bad list cheap, Ø Rent a good list for a fortune (Groupon), or Ø Build a good one yourself A good web strategy solves this problem

Page 24: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

Example: Cloud 9 List Building

Ø Independent day spa and salon in Gainesville, Fl

Ø Strong local brand Ø 1,972 Facebook fans before sweepstakes

Page 25: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

Sweepstakes

Ø $250 Ø Appealing Ø Tied to Mom Ø Facebook Ø Website Ø Email Ø Direct Mail

Page 26: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

Engagement

Ø Very engaged fans Ø Reminder posts Ø Thoughtful Ø Sincere

Page 27: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

Results

Ø 1,346 people registered Ø Invited 4,857 of their friends to become

fans of the Cloud 9 Facebook page. Ø Cloud 9 went from 1,972 to 3,977

Facebook fans in 8 days.

Page 28: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

Reach

Ø Started good Ø Doubled fan-base Ø Kept momentum Ø Added benefits: check-in

ü Added 20,000 impressions!

Page 29: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

Build Your Email List

Ø  Understand the value Ø  Address is worth $20-$100 Ø  Sell the benefits of your list Ø  Create a plan Ø  Harvest what you have Ø  Measure and improve

Page 30: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

Build Your Email List

Opt-in form on your website

In-house sign-up

Page 31: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

Build Your Email List

Opt-in form on your website

Page 32: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

Build Your Social Media List

Page 33: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

The 4th Truth: A Good Web Strategy Puts YOU in Control

Ø Group deals Ø Online appointments Ø Newsletter Ø Instant Gift Certificates Ø Blog Ø Special events

Page 34: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

With a List You Are In Control

PFL Deals Ø  Build your own deal Ø  Keep your margin positive Ø  Targets right demographic Ø  Measure results Ø  Keep your clients

                       

Page 35: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

Power of a PFL Deal

Ø Strong offer

Ø Group dynamics

Ø Opportunity for engagement

Page 36: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

Run the Numbers!

Metric Groupon PFL Deal

Page 37: Kick Groupon to the Curb: The 4 Truths of Online Marketing · Groupon Numbers To break even from the Groupon deal you will have to sell $110,000 in regularly priced services ($5,500K

Exclusive PFL Offer

Ø  Basic Website Package $399 (regularly $499) Ø  Custom Website Package $1299 (regularly $1,499)

Ø  Custom Website Package (with mobile animation) $2,299 (regularly $2,499)

All packages are $99/month and include live US-based

support, email, social media and PFL Deals 800-924-2031

Offer expires October 5, 2011

To take advantage of this offer, email us at: [email protected] Referral Code:PFL09