Groupon: Good for guests, Bad for Business

Image courtesy of Google images

We all love a to save some money these days and companies like Groupon and Living Social benefit us as consumers greatly.

If you're unfamiliar with how Groupon works, I'll explain. Businesses offer a discount to their product or service to customers. They set an amount of purchases that have to be made and if there are enough people to buy the offer then the "deal is on." The concept is that a large amount of purchases will make up for the discount they are giving.

The 'Benefits' to the Business

These businesses benefit from inflated sales for a period of time (or so you think). The true benefit they get is the amount of NEW customers to buy their product. When a Groupon representative talks with you this is one of their biggest selling points. They tell you about all of the new faces you'll see and after testing your AMAZING product they will keep coming back. It's true! You WILL see a lot of new people.

BUT, the truth about all those new customers is that the majority of them will not come back without another discount. This is a proven fact and I invite you to even ask these businesses. There are a few reasons why they won't come back:

• They've come to expect a discount and they will wait for your next Groupon offer.
• They like to try new things, but your product just wasn't to their liking. (Surprise, not EVERYONE likes your product)
• They have always wanted to try your product, but the price without a discount is just way too high, so they won't be coming back.

Bad for Business

So what's so bad about offering a discount on Groupon? It's a rip off! Most business owners are blinded by the large amount of new customers that they think they're getting a great deal. In reality, they are still not making full profit on all of those sales. Most offers are 40-60% off their regular price. If a business could live on selling their product all the time at that rate then they shouldn't be charging the original price to begin with.

The other thing most people don't think about with regards to Groupon is they have to be able to make money, too. The way Groupon makes their money is by taking a percentage (40-60%) of the money customers pay for YOUR offer. Let me repeat. They take a cut from your already discounted price!

Let's use one of my favorite offers for an example, 18 holes of Golf with cart rental at 50% off.

Each Offer:

Regular price of such offer is $50

Golf Course through Groupon offers $25

Groupon takes 50% of offer price = $12.50

$50 x 50% = $25

$25 x 50% = $12.50

$25 - $12.50 = $12.50

Total amount business receives = $12.50 or 25%

In the end, Golf Course gave their product away for 75% off!

As a consumer I'm going to keep buying Groupon offers every week because they save me a bunch of money and I get my fix of eating out and trying new things. It's awesome and you know it! But as a professional and someone who helps small businesses with their branding and growth I will absolutely never advise a business owner participate in Groupon. There are countless ways to get exposure and new customers through your doors without needing to discount your product and without giving money away to another company.

If you want some advice to get new customers and keep them loyal or grow your brand please contact me and I'll gladly help. Until next time... #BeAmbitious

Does social media advertising actually work?

Does advertising on social media actually work?

I've been asked this question multiple times by clients. It's a very difficult question to answer, but I will give it my best shot and try to be as clear as possible.

What is social media advertising?

First of all, let me be clear about what I mean when I say social media advertising. There are a couple forms of social media advertising that can easily be confused.

The first form is the most common where your business has a Facebook or Twitter page and you post sales and special deals on your pages for your followers to see.

The other form, which I will focus on more, is the actual purchasing of post views. Your business page can create ads where you pay for each view or 'impression' the ad gets. The best part about these ads is you can target the exact audience you want to reach. Even if it's a 26 year old mother who likes sports and recently purchased a new phone in the small town of Denison, Iowa. (Shout out to my hometown!)

So does it work?

The short answer is, yes, but maybe not how you want it to work. Here's why:

A lot of businesses have the misconception that getting more followers to your social media pages means more customers in your store. This is probably one of the biggest mistakes in marketing. Social media for businesses is not meant for a channel of advertising. Advertising is is a bi-product of social media.

All forms of social media advertising are beneficial to your business for one main reason... exposure. The more your business name and identity are seen by your target audience the better your chance to make an impact. Unfortunately that does not mean those new followers will immediately turn into paying customers. So really, even though you can have precise audience targeting with social media ads, there is still the same guarantee, or lack thereof, as other forms of advertising. In these terms, no, social media advertising does not work if your goal is to get immediate reaction on in-store sales.

Make a plan for success.

It is possible to have effective social media advertising. You just need to adjust your purpose with Facebook and Twitter to be in line with your overall marketing goals. Make a plan and stick to your plan.

The number one goal for every business on social media should be to build interaction and loyalty in your brand. In today's society we are trained to expect advertising in every setting. And, with our capabilities with the internet and search engines customers are smarter than they have ever been. This is a good thing because now we can focus less on teaching the viewer and more time relating to them. Use your social media to let your guard down with your business (but don't be too loose like this disaster). By interacting with your customers you're building trust and a bond between them and your brand. Relationships are the most powerful branding tool.

Overall, I do suggest using social media for your business in almost any case. It's a very powerful tool and there's so much you can do with it just by experimenting. It's an easy way to gain exposure and even more, get to know who your most loyal customers are and what your customers truly think of your brand.

If you're not quite sure how to make the most of your social media, send me a message and I will give you some pointers to get started. You can email me or visit my website here.

Good luck! As always #BeAmbitious.

Type and text tips for a top-notch brand

It seems as though a lot of people think it does not matter which font your designer chooses with your branding. Well, what kind of expert would I be if I told you that was true? There are tons of tiny details in the font you choose with any body of text that can make a BIG difference in how your brand is reflected. So I'm going to give you some tips to watch for when having someone design your ads or other marketing materials. I will also give you a quick course in the different styles of fonts and what they mean for your brand.

Sans vs. Serif

Lets start with the basics and a couple terms that people who don't work with typography everyday can easily get confused.
There are four main types of fonts: Serif, Sans-serif, Script, and Novelty. Script fonts often look like cursive or hand-written. Novelty fonts are basically any font that does not fit in any of the first three categories. The most commonly used of these are Serif and Sans-serif, but what are they and what's the difference?

This image illustrates the difference between the two. As you can see, there are little notches on the ends of the strokes on the top word. These things are called serifs and they are on a lot of the most used and the oldest fonts like Times and Baskerville. The bottom word has more uniform sized lines where the widths don't vary, this is called sans-serif. The term sans directly translates to "without". So, sans-serif = "without" serif.

Now that we've got that all cleared up here are some tips for the proper use of each type style:

Large amounts of text

When you have large amounts of text in paragraph form it is imperative to consider readability. Certain fonts just make it very difficult for readers to follow. Serif and sans-serif fonts are the ideal typestyles here. It is absolutely never acceptable to use script and novelty fonts for larger amounts of text! These fonts are very difficult to read and should only be used in small amounts – no exceptions. When considering how wide columns of text should be, the rule of thumb is to allow 10-14 words per line. Any longer and the reader may have trouble moving their eyes from the end of one line to the beginning of the next. Too short and your paragraphs will seem long and overwhelming.

So when can I use script and novelty fonts?

I advise limiting your use of script and novelty fonts to short pieces of text like headings and logo use. These fonts often have nice qualities that are very particular to the style of a brand. Script fonts are often wispy and and curly and have nice feminine qualities. They work well for brands of female targeted products, but beware of using them for holiday advertisements since they get overly used by other brands.

What does your typestyle say about your brand?

So which font is right for your brand? Good question. Depending on how the font is used and treated by your designer almost any type style can emit different emotions. The safest routes are these... Serif fonts have a look of old fashion. They give the viewer a sense of reliability in the brand. Sans-serif fonts are often more rectangular and sturdy-looking. This means they represent being strong. However, if you use a lighter weight sans-serif font you can get an opposite result. Sans-serif fonts also work great for giving a very contemporary, sleek, and modern look. As mentioned earlier, script fonts have great feminine qualities. They work well for a softer feel and representing attention to detail. The toughest typestyle to talk about is novelty fonts because they come in all shapes and sizes. My only suggestion here is to use them sparingly.

Still have questions? Don't fret. Shoot me an email or visit my website to learn more. Comment with any questions you might have an I will gladly answer.

As always, #BeAmbitious.