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.

Simple or Complex - the waffle paradox and the not-so-easy answer

Seth Godin's "waffle paradox" is one of those topics that seems to trip up fast acting decision makers. After all, people like simple answers, they make great sound bites -- and who needs complexity?

On the other hand, as Seth Godin points out:

"Nuance is the sign of an intelligent observer. Nuance shows restaint and maturity and an understanding of the underlying mechanics of whatever problem we're wrestling with. After all, if the solution was simple, we would have solved it already."

This goes back to a discussion I recently had over search engine marketing (SEM) and search engine optimization (SEO). The person I spoke with had been pitched by an SEO firm which told him that he needed to pay $30,000 to SEO his site to drive more traffic, close more leads, increase revenues, etc. It sounded so simple that he could just pour money on the unverified problem, and things would magically happen. The pitch was short, sweet, and direct -- AND good enough that the person asked me if it was worth it.

My response was "it's not that simple". I had a number of questions: Did he even know if there was a problem? If so, how large was it? Were there any signs of lost business? Would he really recover the $30,000 costs through increased sales? What would he really get for that $30,000? Did he get a free audit from any of the hundreds of SEO firms that will do free SEO audits in hopes of winning the business?

I worried that my response was too complicated. My colleague appreciated the list of questions, as they justified the uneasiness he felt during the SEO firm's pitch. He wanted nuance, but that would not have captured his ear. As it turned out, nuance had to combat simplicity. Of course, I had the context to ask the right questions.

So I don't blame the SEO firm for over simplifying in their pitch. Simplicity works - increase revenue, cut costs, don't leave money on the table. That get's my ear. On the other hand, simple may get you to the dance floor, but a business relationship is closer to a Tango with intricacies that are just more complicated.

Lying or smart marketing? A personal shoe story:

My feet hurt, and I knew that comfy shoes would fix it, so I searched online for comfortable shoes and found a few. Air support, memory foam, springs - all were listed as THE solution for sore feet and an aching back. The spring technology was the most intriguing. I had seen in a few magazines, but I did not have a chance to review the details around their claims for comfort until now.

There are different spring technologies, spanning 'wave springs', special materials, and unique encapsulation processes that differentiate the 3 vendors I found with spring-based shoes. The one that caught my eye, Gravity Defyer, had a nice website, but it was difficult to find information on the technology. The website was a little difficult to navigate if you were searching for information and not in the buying mood. What really interested me was their 'clinical study' and how they were justifying their claims.

Now, I've never tried these shoes, nor do I have any reason to believe that the shoes are bad, or good for that matter, but what caught my eye was the opening paragraph of the 'clinical study'. See the quote from the clinical study link below:

This 'clinical study', if it can even be called that, does not use an independent 3rd party to collect and analyze the data. In fact, the study is actually a statistical analysis of data provided by Gravity Defyer to the analyst firm. In simple terms, if the analysis firm was sent 100 perfect ratings in 17 rating scales, they would have to state that the data showed 100 perfect ratings. The analysis was a foregone conclusion since there never was a question about the outcome of the analysis since the data and results were already known before the analysis was performed by Packer Engineering. If that's the case, what's the 'clinical' part of the study? Where's the real value to consumers in this equation?

So what's going on here? Some would argue that "clinical study", as a term of trust, was abused and that consumers would be confused. It seems to be on the wrong end of ethical language. It may even be illegal as it could mislead consumer into believing that doctors, control subjects, and proper protocols were involved.

On the other hand, it could also be savvy marketing. If the term 'clinical study' is not protected with a legal expectation, this technique could be viewed as a quick shortcut to earn trust that actually works. If there are no legal ramifications to using 'clinical study' then why not use it any time you want to appear to have a scientific advantage? It's buyer beware, right?

This seems slightly less ethical, but probably more effective than those "similar to as seen on TV" stickers you see on products. The font is so small in parts that it looks like "as seen on TV", so it's easy to mistake the product at the store for the one on late-night infomercials. Yes, before you ask, I've seen people in stores pick up the "Snuggle blanket" instead of the "Snuggie" and specifically point to the "similar to as seen on TV" sticker or printing on the box and call it a Snuggie.

If there are no policies or standards around marketing language, it can easily be used borrow goodwill or even mislead consumers and even business readers. In order to know what you're getting and possibly save yourself of headache or legal wrangling later, read the detail. There may be more to what's being said than is written in the large print.

Your bag of tricks is worthless

I had a thoughtful conversation with Dave Aune about business expectations when people hire marketers. Dave made an interesting comment that stuck in my mind, "what's in your marketing bag of tricks?". MY bag of tricks? I knew he was joking and goading me onto my soapbox, so I told him he was funny.

Long ago, while running my first marketing department, the company president wanted to understand what my marketing department did. The knowledge sought was simple - What did we do that was growing the company? How did my staff fit into the big picture, and what would happen if staff were cut? Little did I know at the time, but we were about to be acquired, and cutting head count would make us look more attractive.

What I presented was a marketing operations spreadsheets. A 240 row spreadsheet showing all the tasks that my team was doing on a daily, weekly, and monthly basis. The list of operational tasks was impressive, and the company president was initially overwhelmed. Later that week, in a discussion with the engineering team, the company president mentioned that I was "working on my bag of tricks". It was the first time someone referred to my marketing as a 'bag of tricks', and it would not be the last.

The notion of a marketing 'bag of tricks' is now one of fastest filters that tells me that someone doesn't understand marketing or suffers from marketing naivete. When someone really believes in a marketing bag of tricks, they almost always hold the unhealthy belief that a marketer has a tactic will always work. That 'it worked once, it will work again' mentality is the bane of sales executives, presidents, and board members over and over again, as a persuasive marketer can use 20/20 hindsight to explain how some marketing tactic worked last year or in their last job, and it will work again. It CAN work, but rarely does as a straight drop in. A bag of tricks suggests that the customers are either being tricked or that the marketer has magic, neither of which seems like a dependable, let alone repeatable business strategy. Instead of hoping for magic, wouldn't it be better if your marketing was based around strategies, systems, and processes that, when applied properly, lead to awareness, action, and conversion? Good marketing applies those strategies, systems, and processes to identify one hit wonders as well as longer term repeatable phenomenons and allows for the application of the right money at the right time.

Markets, and the people that make them, are dynamic, and what's more important than any trick or tactic are the fundamentals behind why that tactic may have worked earlier. The dancing baby worked once, the dancing hamster worked once, tattoos on the forehead worked once, even cavemen worked for a little while. Some campaigns or marketing memes work once, a few times, or can last, but there's no way to guarantee that you can bring a caveman variant to the next marketing campaign at the next company.

It may seem like magic when good marketers are successful repeatedly, but it's not. In fact, good marketers apply processes and a toolkit by which they temper with experience, past lessons, and an understanding of human motivations and behaviors toward a given business goal. Those tools may be applied with expectations for success, but focus on applying tools that generate results which can lead to greater and greater successes. The end result may seem like magic from a bag of tricks, but there is no magic, just insight derived from the proper selection and application of marketing tools, and the willingness to test, cull poor performers, and expand in winning directions.

Dave has heard this rant dozens of times, but I thank him for suggesting it as a blog topic that needed to be covered.