Groupon wants people to have a ridiculous deal like 50% off
then they want 50% of the revenue you receive from those jobs
first of all:
50% is loanshark marketing services
[U][I]anyone know of any company whose marketing department has a budget of 50% of gross revenues???
[/I][/U]
[B]Outwit, Outplay, Outlast and Survive Strategy:[/B]
I say reprice all your services (ex: $100) by 400% higher ($400), then give 50% off in the coupon (=$200), then pay groupon’s 50% of that ($100) and you actually come out at what you regularly charge in the first place: $100
Sure, you gotta “fluff it up” with some good marketing, you can’t just post a Craigslist text only type ad
Groupon looks at what people usually spend for a service and try to see if your prices are in line with your competitors. They want to see the Groupon at least cover the majority of a service offered for those who only “want the minimum”. While they know the goal is to upsell, they have to make sure their customers can use the Groupon to “evaluate” the business, like an interview, to see if you’re good enough to hire they next time they need the service done.
Make sure your pricing is in place well ahead of the Groupon so people don’t catch on that you’re inflating the price.
I’ve ran two Groupons. The first time around I had people call me to estimate the job without letting on that they had purchased a Groupon. Turns out they’re suspicious and assume you’re inflating the prices; this woman actually did it on the advice of her girlfriends. …she had her “friend” clean her windows, in and out, for $100 and left me with a 20 minute gutter job for the “value of the Groupon.”
The second time around I had Responsibid in place and the Groupon coordinators were playing with it and didn’t like that my prices were “so high” - $6-8/pane (ins & out). They didn’t like that a person with an average sized home (2500sq’) would have to pay more than $80 to have the outsides of the windows washed. I laughed.
My response to them was: “People are going to pay more for a quality service. By bringing in low-ballers you’re degrading the cleaning market, putting an unfair price in people’s minds, and making it harder for quality cleaners to land jobs. It’s your job to appeal the customers and price shouldn’t be the only factor.” She agreed and I didn’t make any changes.
I doubt groupon would run it. They have a good idea after running so many, what window cleaning goes for. But I agree Bruce, it’s a good idea if you could convince them and also get customers to buy them. In groupons eyes, if they can’t make 4k from the deal they won’t touch it.
I gave him props for outwitting in his clever way in the thread I originally posted this in today (I did NOT post his exclusive strategy), this is a recopy of the math portion of my post of just a simplistic formula of how to arrive at what you already charge after the groupon loansharking.
“matt” got me thinking of the math when he said they take 50% after you’re already supposed to discount 50%, so I backed the numbers in from there
Dubrosky was very skilled at what he did, which was different from just the groupon loanshark math here I posted
ok, so a person has a lot less latitude that I thought
this is just another lousy NSA model, but for residential
they tell you what you can do
they tell what you can charge
they tell you what you have to discount
they demand exorbitant compensation
they put the unsuspecting out of business, or into 3rd world country sweat shop mode faster than anything
this is walmart vs vendor wars but instead groupon vs small business
“you should be so happy to work for us and that we can get you so much volume that you are willing to essentially work for less than minimum wage and sacrifice yourself, life and business for OUR profit”
we win off your back/ you lose sucka
not we win/ you win
at least how I see it and from the experience of a couple friends who manufacture product and have dealt with walmart and others
the thing with vendors and mfg is that it DOES revolve around volume and you NEED the monstrous distribution channels of the national companies, so choices need to be made on the lesser of the evils to deal with, sincea mfr just wont have access to the volume
things like groupon, you don’t HAVE TO HAVE at that PRICE and volume and wide service area just compounds the problem
seems like taking on a business partner or being a franchisee who is going to bleed you dry, fortunately anyone can still reach their market and service radius without their help
am I missing something about groupon? I know some it has worked for, interesting, there must still be some latitude that allows for that
still is it the right market? does it reach a target market? your target market?
too focused on price for me
I agree with Garret, it seems to be another thing to bring down the industry and create more problems for small businesses for that i get aggravated, but I’m sure no one can tell that
I agree with you Bruce and wish Groupon didn’t exist. But it does exist and now all markets will suffer. When another company in my area runs one for window cleaning, It definitely isn’t good for my established customers being lured in for the carrot…
I should qualify that by “fluff it up” with marketing, I don’t mean deceit or mean something that has no value, but to package it ina way that it works
realized the word fluff could be also understood as plaid jacket used car salesman
how about fluff it up with some [B]good [/B]marketing - instead?
and you know what, if you can apply good marketing skills to price your products 400% higher and take 50% off . . .
then . . .
you don’t need groupon! lol
do that on your own and double your revenues without giving groupon 50% of the pie
Maybe if you did a Groupon for “$50 Value for Only $25- covers the Exterior cleaning of the BIGGEST one window in your home or office”*
*Must be no higher than 2 stories. All jobs have a $100 minimum, so plan on getting more than you’re paying for. Not only will you get the BIGGEST one window cleaned for a fraction of the cost, but you’ll also get $75 worth of windows cleaned while we are there (@ $15/window), exterior only. If you have more windows and would like them cleaned we can also add them on and take care of it all on one visit.
That’s $100 out of their pocket, Groupon gets $12.50 per deal sold, and you get $87.50 for cleaning 6 windows (minimum) exterior only.
Again, I doubt groupon would go for so many stipulations. In their eyes the stipulations may limit the number they need to sell which would be over 300 for that deal.
Instead of giving away money to Groupon why not just put that money towards direct mail. The clients you get will not be price shoppers and you get your price fro the beginning.
That’s $100 out of their pocket, Groupon gets $12.50 per deal sold, and you get $87.50 for cleaning 6 windows (minimum) exterior only.
