marketing and sales executives from Silicon Valley

Saturday, March 24, 2012

Make Your Groupon or Deal Put More Money in YOUR Pocket

Deal sites like Groupon, Living Social, or Zozi seem like a great idea:  Using the power of Groupon-like sites and their millions and millions of users, your business gets massive exposure, a boatload of new customers, and the coolness factor associated with one of the hottest Internet companies of the today. It doesn't cost you anything upfront, and it can be budgeted as a marketing expense that only occurs when people buy your product or service.  

In fact, Groupon has many satisfied customers, and you could be one of them. Not so fast. There's also the 'other side' of the story, where some businesses say that Groupon sucks - damaging your brand, drawing the wrong customers, destroying profit. There's even a PC World expose on it. There was even a report published (and covered in HuffPo) that most small businesses hate Groupon.

That brings me to a deal I saw on Yahoo Deals from a music studio. For $20, I could get rehearsal studio time for 3 hours. I'm not even sure if I'm good enough to be called a 'real musician', but at that price it's something I would consider and not feel like I was being too indulgent. As with most deals, if I'm interested, I read more and do a little research to see how shady or reputable a firm is. In this case, I clicked through to the website and found a pleasant surprise. I did have to make a decision on the spot to get that $20 deal. The studio was offering the same price on a web-only special.

It may not be a good deal for the deal company, but it was suddenly a better deal for the studio and for me. Sure, I would get the same price, but now I didn't have to pay ahead of time in the hopes that I might use my deal voucher. At the same time, if I had a charge/transaction problem, I could deal directly with the studio - or have my credit card deal directly with them. The studio, on the other hand, no longer had to give away the 50%+ in the reduced fees that it would receive from the deal, it would be paid immediately when the transaction cleared, and it received free advertising from Yahoo and the originating deal company. Now that's leverage.

This particular studio may be banned from future deals with this deal company, but if they believed that they would end up like other small businesses that hate the deal sites and never use them again, then they haven't really lost much. Even better, the deal was favorable to deal site and non-deal site users, unlike the deal that caused user backlash from FTD.

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Thursday, March 15, 2012

#SXSW 2012 Marks the End of an Era

As I read the article on Ad Age titled "What if the real 'Winner' of SXSW was AmEx?", I felt a strange sense of loss. Big brands, with big budgets, were the focal point of a number of news stories covering SXSW. I couldn't help but wonder "what happened to the Indie Music and Indie Startup scene?". SXSW, it seems, may have sold out and, if it hasn't, is losing touch with it's roots.

If you read the article you'll see it says AmEx "stole the attention away from the thousands of startups represented there", but shouldn't that be easy to do when you can afford to hire Jay Z, rent the venue, and market that info? The real question should be how much did AmEx spend to buy the buzz and can startups compete with the likes of AmEx and Nike pouring huge bucks into #SXSW.

I do think AmEx did it right, as pointed out in the article, but they had an unfair example that startups are unlikely to match. This of it this way: If Twitter or Foursquare had launched during AmEx's high priced media blitz, would they have won the show instead? Would have they received the same attention? Maybe Gowalla's story might be a bit different.

From a marketer's standpoint, the culture and flavor of SXSW may be shifting dramatically away from independent music, art, culture, and tech to a show that has sold it's soul to big budget branding. That may forever change what can be introduced and marketed there, the tactics, and more importantly, the cost to play.