Groupon, Living Social, Citydeal etc.............anyone any experience?

ssbob

Just wondering has anyone had any experience running a deal with one of these coupon websites that seem to have exploded onto the Irish scene over the past 12 months?

I am running one myself with a fixed product rather than a service, and was wondering how much typically the website takes from each sale?

Would also be interested in hearing success or failure stories.

Thanks,

James

PrintBob

James, I researched this in part a few weeks back and I found some interesting facts. The websites will generally (groupon anyway) take about 50% of the already discounted price. They will pay you the due amount, but you may not get it straight away - or not all at once.

They seem to work well for some companies and horribly for others. For example, I think hotels and the likes, where the guests will often spend more, are very fond of these as the 'loss' can be complimented with spends on dinner, drinks etc and repeat business.. But for others, the purchase may turn out to be a real once off that costs the company dearly.

I think they are great as long as you are wary. You would have to be sure that every eventuality is thought of and make sure you set a limit -- if a higher number has the potential to do serious damage. I think it can greatly improve a business, or seriously harm so be careful!!!

What field is your business in?

GoneShootin

Ive ran both LivingSocial and CityDeals. Both worked well, imo LivingSocial worked much better for us here in Cork.

If I had to choose between one or the other I would happily run with LivingSocial. We negotiated a better comission with LS (45%), the response was higher, but most importantly we did not have to wait to receive funds based on voucher redemption.

You see, CityDeals only send you your cut after you redeem the voucher codes online. If the punter doesn't come with the voucher code, then you don't get paid. LivingSocial bangs on the money about 15 days after the promotion ends regardless of voucher codes or not. The LivingSocial dashboard is more useful too, as you can engage with redeemed voucher holders in getting feedback on their purchases.

I'm planning a GrabOne campaign in November. Far lower comission rate (about 1/2 of CD), quick fund transfer without redemtion, and strip ad on bottom of Indo newspaper. Should be interesting!

One word of warning if you do take them on, get ready for an influx. You business model should not mean that you fork out higher wages for the hopes of retaining customers. If wages climb with service use then plan your campaign with care!

Btw, we did convert some of our voucher holders into full paying clients. We saw some great web traffic, and a "cost free" web aftervising campaign.

ssbob

Firstly thank ye both for your comments, I have looked into it a small bit and this is great feedback to find out from people who have actually used the sites.

PrintBob wrote: »

What field is your business in?

Basically the company is a new start that sources and supplies product from China for a range of customers but also brings in products to sell to the whole sale market like Garden Furniture, Pedal Go Karts etc........ Our USP is that 2 of the partners in the business are Chinese and own a business in China who does all of the sourcing for us(and some of the manufacturing), they regularly travel out there to make sure that quality is not compromised.

The problem we have at the moment is getting the name out there and I was hoping to do a 3 pronged approach for this:

1. Living Social/City Deal.
2. Direct mail campaign.
3. Radio advert campaign.

I understand that it will put pressure on the company resources but a bang is what we need to really get going.

GoneShootin wrote: »

Btw, we did convert some of our voucher holders into full paying clients. We saw some great web traffic, and a "cost free" web aftervising campaign.

I use your place in Mitchelstown with a team I am a member of, it is amazing to see the spiderweb theory working(whereby 1 person who's happy with the service tells 2 people and so on.....)

IRE60

@ssbob

We spent a bit of time on this to bring a bit of reality to the situation. Its a daily deal calculator. Now there is a Caveat here: you can change that many variables that it is limitless - all we are trying to do is allow you to look at some of the aspects of the daily deal equation.

You can find the Daily Deal Calculator there!

It's housed in the clouds to make it dynamic - so it can be a little chunkey at times depending on traffic to Microsoft - so just wait a few seconds and it will load. I have a shiny desktop excel version with slider bars and all that - PM me if it's any use to you.

It wont give you an 'answer' again because of the variables many of which are unknown when you enter the promotion and only become visable at the end (returning customers etc)

If you want to dig deeper and its where we got the idea - look at some of the studies on Daily Deals form Rice University.

C

RacoonQueen

I've run two, one with ratemyarea - which didn't sell many and one with Living Social. I have been in contact with City Deal but didn't really like how they responded or how much their referral fee is. 50% is an AWFUL lot and in my line of business a lot of people are going to buy up all the similar vouchers and use them up.

Living Social give you a merchant dashboard where your clients can provide anonymous feedback - that only you can see. People will generally not give you negative feedback so it's good to see what people think that you can improve on. I've only had on neg review and it was VERY negative whereas everything else has been positive.

The purpose for me was to get my name out there - I've had 20 vouchers redeemed, 4 have come back for repeat business and there are another 10 or so who I can see coming back. People in my line of work would only come once a month/6 weeks or so, so it remains to be seen but as a new business it definitely helps.

ssbob

RacoonQueen wrote: »

The purpose for me was to get my name out there - I've had 20 vouchers redeemed, 4 have come back for repeat business and there are another 10 or so who I can see coming back. People in my line of work would only come once a month/6 weeks or so, so it remains to be seen but as a new business it definitely helps.

Well thats my reason for pursuing this idea, we need to get the name of the company out there.

maxer68

PrintBob wrote: »

James, I researched this in part a few weeks back and I found some interesting facts. The websites will generally (groupon anyway) take about 50% of the already discounted price. They will pay you the due amount, but you may not get it straight away - or not all at once.

You have to look at these things as another form of advertising and have them part of your overall marketing budget..

1. - 50% is the rate card price - NO-ONE pays rate card for advertising. If your product is attractive enough you can negotiate as low as 15%. (what's better 15% of 1000 deals at €50 or 50% of 50 deals at €100?)

2. Be 100% you can cope with the orders. - Set a limit on the number of deals - do not overstretch yourself.

3. Be 100% sure you can deliver what you promise and don't scrimp on service / product - you are trying to make that customer want to come back to you!

4. Don't do the deals too often, otherwise you alienate your regular clientele.

5. Try as best as possble to get details of the customers so that you can offer your own deals at future dates without having to pay commission - can be great from a cashflow point of view.

markymark21

GoneShootin wrote: »

Ive ran both LivingSocial and CityDeals. Both worked well, imo LivingSocial worked much better for us here in Cork.


Btw, we did convert some of our voucher holders into full paying clients. We saw some great web traffic, and a "cost free" web aftervising campaign.

Hi. I work in a restaurant so if we offer two three course meals for - lets say - €40 citydeal and Living Social will usually take around €20 for themselves?

The one worry i would have is that we would just be filling our restaurant full of people who just chase deals every week. I can speak from experience as i've done this myself! I know you yourself said you gained repeat customers but with the average restaurant having as many overheads as it does I don't know if its finanically viable to do one of these deals. I went to 'cafe de irlandais' a few months ago on a Living Social Deal - I think they had sold something like 500., yet two weeks ago they closed down!

Anyone here from the hospitality industry carried out one of these deals?

ssbob

markymark21 wrote: »

Hi. I work in a restaurant so if we offer two three course meals for - lets say - €40 citydeal and Living Social will usually take around €20 for themselves?

The one worry i would have is that we would just be filling our restaurant full of people who just chase deals every week. I can speak from experience as i've done this myself! I know you yourself said you gained repeat customers but with the average restaurant having as many overheads as it does I don't know if its finanically viable to do one of these deals. I went to 'cafe de irlandais' a few months ago on a Living Social Deal - I think they had sold something like 500., yet two weeks ago they closed down!

Anyone here from the hospitality industry carried out one of these deals?

Hi markymark,

I think from the info mentioned above, a one off deal like this would want to be factored in as part of your overall advertising budget. While yes this deal will be for people who chase deals, you are hoping that their word of mouth will pass on how good your business is, so if you do 100 covers, each person may say it to 5 people, that's 500 potential new clients.

From the feedback I have got since starting this thread, it would appear that everyone says to go into this with your eyes fully open to the long term benefits but limit the offers to what you can handle!

RacoonQueen

The one worry i would have is that we would just be filling our restaurant full of people who just chase deals every week.

I'm running a sports injury clinic so my deal was for a sports massage/deep tissue massage. I have had a couple of people tell me that they regularly buy up the massage deals. So yeah, you get deal chasers but you will get a certain % who will stick with you.

One of the benefits in the hospitality industry surely would be that they'd come in and buy a couple of bottles of wine or what not? For me I'm purely hoping that they'll enjoy the treatment, come back and spread the word that I'm there and that I'm good etc

Conmc88

What is Living social and city deal???

Zonua

Conmc88 wrote: »

What is Living social and city deal???

Same idea as Groupon.

To check most (all?) of the deal sites around - check www.dealpage.ie.

I *heard* that Boards deals do the best percentages. I'm not sure if it's true . . . but considering we all Boards here, it'd be nice to keep the money at home.

RacoonQueen

Zonua wrote: »

Same idea as Groupon.

To check most (all?) of the deal sites around - check www.dealpage.ie.

I *heard* that Boards deals do the best percentages. I'm not sure if it's true . . . but considering we all Boards here, it'd be nice to keep the money at home.

One small company keeps emailing me offering me 15% which is less than boards. Red ribbon deals charge no commission but they're a pain to get your money from.

Canonfan

I found out Boards Deals charge 30%.

BBSTELLA

I booked a number of these city deals and many have been good however, I booked a hotel deal a while back- it clearly states in the terms and conditions that I can book anytime, any day of the week, however when I went to book the hotel I was told there was only a couple of rooms left the date I wanted to book and other paying customers get priorty-I dont think this is fair!