Dan Morris – Page 53 – Audience Industries

How to use Groupon for your business

So many horror stories, and yet they can all be avoided. Learning how to use Groupon for your business really means . . . what do you know about your business?

How do you make money?

The first step in using Groupon for your business is understanding where money is made in your business. For most businesses, a customer’s seventh purchase is more profitable than the first purchase because of the media cost required to acquire them as a customer. In that case the money is made in repeat buyers.

Some business owners understand that if they can get a customer to come in a 5th time, that customer will likely come in many more times. They may have detected customers who don’t make it past 4 just don’t have the same proclivity to shop there regularly as the ones that make 5.

In some businesses the money is made in large items. For example a watercolor painting store may really do well selling the large canvases and specialty brushes, whereas their paint-by-number and smaller painting kits don’t have the same margin. For restaurants that may translate to big money in catering dollars compared to the high cost of the single slice pizza customer.

Part of learning how to use Groupon for your business is understanding what kind of customer makes you the most money – and what is it about those customers that are different than the rest.

Defining the strategy

Before we get to Groupon, it’s imperative to understand the path that someone takes from before they know you exist until they are buying your high margin items. How does that path compare to the customers who never make it to the high margin items? Drawing or tracking the path that your customers take on that journey will give you great insight into what types of marketing you should be doing.

While it’s not easy to do, tracking the source of your customers over the long term makes enormous business sense and well worth the money spent. For a cleaning company it would be great to know if the “get your bathrooms squeaky clean” or “spend time with your kids, hire a maid” produced the most profitable batch of customers.

Crafting the Deal

If your ideal client is the mom who buys a full year of gymnastics lessons, because that parent is likely going to buy 2, 3 and 4 years of gymnastics lessons, then it makes sense to create a special that encourages mom’s to buy a full year. Whether that special is on a flyer, in Groupon or through e-mail it doesn’t really matter. Anyone gained through that effort is likely to be a customer for the next 4 years.

Suppose it is the large, blank canvas buyer that makes you the most money. . . If that’s the case, is it the beginner painter or more intermediate painter who takes on a large canvas painting? If it’s the more advanced, perhaps creating an offer for a very specialized art technique class would appeal to intermediate painters – the ones who buy the big canvases. An “intro to painting” class may not be as lucrative in the long run.

For the businesses that need customers to come in that magic 5th time to make all the difference, perhaps the strategy is to get a loyalty rewards card in their hand, which offers a discount or free item on their 5th visit. Defining the type of customer that takes and uses loyalty cards is what’s to be decided then. That’s whom you direct the deal or special.

The messaging in the special, whether it’s Groupon or not, is critical to the success of the marketing. There’s a huge difference between a list of serious, intermediate artists who’ve bought at your shop versus a list of beginner artists who just wanted to try their hand at painting. Which list can you monetize later?

Using Groupon

Determining how to use Groupon for your business comes down to what you can afford to pay to acquire customers who fit the mold of your most profitable ones. If that gymnastics mom is going to spend $2,700 over the course of 4 years with you, would it be worth spending $150 to acquire that customer?

Groupon doesn’t work too much differently than ValPak, Yellow Pages or Billboards. If you post the same deal at all 4, you’ve got all the same expenses- just allocated differently. With Groupon, you may be offering $75 of services for $30 – which means you end up with $15. If you did that same ad in ValPak, Yellow Pages or on a Billboard, you’d get the whole $30 from the customer – except you’d have to write a check later to pay for the media. Either case you end up with $15.

The key to Groupon is starting slow. Create a deal that isn’t super fantastic, like $75 worth for $55. You might go broke doing $75 of value for $5 – and attract the wrong customers. Then try at $45 and see who that attracts, if not enough lower the price to $35 the next time and see what that brings in. Test. Test. Test.

If you play your cards right you’ll craft a deal you can sell anywhere, anyday, anytime and hopefully everyday. And the testing you get through Groupon can certainly be repurposed into your Yellow Page ad, your Billboard and anywhere else you advertise. The only other problem you have to consider is cash flow. But that’s a different discussion.

Consumer Buying Process Strategy

Creating a marketing plan that matches the consumer buying process strategy is crucial to the overall conversion rate of the campaign. And the key is understanding that marketing plans don’t have to be difficult – the framework itself can be very easy.

In reviewing where we are on a client’s site, I detailed the basic framework we’re using for this site here in this video. Making a plan like this makes it somewhat easy to determine from day to day what part of the strategy you’re working on and how it fits into the overall plan. Continue reading “Consumer Buying Process Strategy”

A business to business marketing mistake

With permission I’m able to relay this business to business marketing mistake that one of my mastermind members made these last few months. We all knew that the change he made was responsible for the error – but it took a while to pin down the “why”.

So an autoparts wholesaler has a pretty comprehensive website when it came to the products they offered. Each part comes with its own spec that many needed but often did without. Continue reading “A business to business marketing mistake”

TEDx Nashville – Greg Stielstra

On April 9, 2011 TEDx Nashville took place at Tennessee’s Performing Arts Center (TPAC). It was a day filled with great folks, great speeches and equally wonderful speakers. My favorite, by far, was given by Greg Stielstra. Greg authored the book PyroMarketing, which I highly recommend for anyone interested in marketing.

Greg covered a variety of topics, all building upon one another until he made the case that it only takes changing 5% of the population to change the entire population’s behavior. That could be your audience, your city, your country. Even though we’re all individuals, our choices are highly influenced by those we interact with. That sense of “group think”, “Lemming leadership” and “social proof” work together to make Social Media what it is.

Please, watch how Greg cleverly explains why the new Social Marketing Paradigm is logically replacing the mass media strategies of old. It’s not just an entertaining speech; it’s truly a wake up call to marketers. Ultimately, if you don’t understand how people behave, you won’t be able to affect their decisions.

Also on the TEDx Nashville schedule that I’d recommend watching are David Mead’s talk on Amateurism. Amateurism was a great title, but it doesn’t really describe it for the unknowing. David eloquently explains how taking on the role of an amateur in his own life and business has really made all the difference in his love of life, joy in his job and appreciation for what he really brings to the world.

And on a bit of a lighter note, Roger Cook’s song and talk about the history of Coca-Cola was pretty cool. Roger wrote the song “I’d like to teach the world to sing” which became Coke’s mantra and help propel Coke to marketing stardom. I’ll find that and will post it soon. Stay tuned!

Matt Cutts: Google’s Public Face

Ever heard of Matt Cutts? I’m guessing that if you’re not in the internet search community, you probably haven’t. (Unless you know his mother or something like that). Well, Matt works at Google. He’s the guy that Google puts in front of the cameras when there’s something to be said about their Search Engine.

He’s a face, an information source and a personality to whom we can learn from, listen to and interact with. Google, one of the biggest companies on the planet, chose to give their Search Engine a face.

Did you notice how Tom Hessey of Sprint stars in the Sprint commercials? How about the Papa John’s guy being front and center in their marketing? Even radio disc jockeys in the last 10 years have become more than just a voice.

Why Does a Face Matter?

Because that face matters. There is so much sincerity, honesty and trust that can be built with a smile than can ever be created with a tag line. Think about this. . . when was the last time you really felt like the people at your local telephone company, the DMV or that vending machine downstairs really understood you? How about Wal*Mart?

Now, turn around and think about your business. Now that you’re looking at doing social media – have you considered the value of the human voice for your company? Have you considered how much more personal a picture is on Twitter than your company logo?

Narrow that even further. Think about that one person who buys your product and for some reason returns it. Did you give that person enough reason to come back? Not every product fits every customer. . . that’s just part of the deal. But with a human voice, a smiling face and some sincerity – you can limit that person’s negative or blase feelings to the product itself.

Getting to know the people behind the company can do more for conversions than a perfectly sized, red opt-in box may ever do. Isn’t it cool when you know someone who works for the company? Don’t you feel more connected? I sure do wish I knew Matt Cutts better. . . and the only reason I say that is because I’ve seen him in action on video. He seems pretty cool.

That “connected” feeling truly turns into profits in the long run. How many times have you heard someone say

“I know a guy that works at X. . . they’ve got a great operation over there”?
“I met the weather guy from Channel 4 – he’s pretty cool. . . “
“Hey, when you get there ask for Trudy, she really helped me the last time”

Conversely, when there’s no face involved, you rarely hear someone say “Come by my office some day, our vending machine rocks”, or “You should use my hosting company, they never answer the phone but they have good prices.”

How Do You Introduce a Company Face?

First, determine strategically who should be this new face. There’s no sense in picking a lame duck, a summer intern or a mean-spirited person. That seems obvious I suppose – but you’d be surprised who don’t take time to think about it.

Will that person represent your brand well, inside and outside the job? Will you choose multiple people depending on their area of expertise?

Then just do it! Have them create their own Twitter Account that you tweet about from the company account. Introduce them on Facebook, BlogTalkradio, Cinchcast, YouTube and LinkedIn. In fact, look up Matt Cutts on YouTube to see what he does.

Have that person track questions they get asked and start making relevant response videos for YouTube. Use them by name and even write a press release for your local media.

Upload some photos throughout the web using the company name as the photo’s file name. That way internet searchers can find the face associated with the company name.

Consider buying Ask(Thatperson’s name).com and use it as the teleseminar or webinar registration page. Have that person answer WikiAnswers questions with the personal profile built and branded to the company.

Don’t limit yourself. People love a face.

Niches Come out at the Royal Wedding

Check out today’s Cinchcast. I was watching some of the pre-Royal Wedding coverage and noticed that niche marketers really did well. The proof is in the pudding – choosing a niche can get you on TV. Take a listen:

Social media marketing mistakes

Wow! I’ve had some great discussions about whether social media is the right step for small businesses. Some have involved the ROI of social media and others questions about manpower and dedication. I believe there are some important social media marketing mistakes you should avoid. So let’s explore whether social media, as a time and activity expense, makes sense for small business.

Part of my discussion involved chats with both Norma Maxwell of InsideWebMarketing.com and Kelsey Foster of ReadyClickContent.com. Our Facebook discussion started with Norma pointing out the success an acquaintance had spending $10/day in Facebook ads to create an audience of 15,000 “fans”. And both spoke highly of the community building that goes on with Facebook – expounding especially upon its importance in business.

I argued then and I argue now that despite those benefits, social media may not be the right step for small businesses. With the exception of one thing. . .

Small Business Responsibilities

To start, time is the most precious commodity a small business owner has – and is its greatest foe. And the responsibilities required to operate successfully are enormous. Consider the marketing, operations, taxes, licenses, customer interaction, research, follow-up, signage, trash, SEO, websites, phone books, computers, HR, etc. . . there is really an infinite number of things to do and an infinite number of expenses.

And small businesses normally have one source of income – customers buying their products and services. From a week to week basis, a small business has to measure their expenses against their income – and no matter who you are if the income doesn’t exceed the expenses you go out of business. And even when the income exceeds expenses – if that doesn’t happen in a timely manner, a small business may not have the cash to pay its expenses and must shut down.

No matter how you slice the pie, there are only two ways to increase your revenue: 1. More customers OR
2. More money from each customer

What should I spend time doing?

That’s it. Building a community on Facebook can certainly increase both – but the question is how long will that take for the “community effect” to turn into dollars? And could your time have been better used another way to achieve the same ends?

Time is finite.

So a small business owner must ask him/herself right now, should I be editing and producing a new radio ad with a call-to-action that will fill my pizza restaurant tonite, or answer questions and update Facebook that may begin to fill my pizza restaurant soon? You can’t say both – because in reality you can’t effectively be doing everything.

If you decide your time is best used doing social media, then some time later decide it’s better used elsewhere – how profitable will a dead, untouched Facebook page be for you? With dates on everything, a failure to interact is one of many social media marketing mistakes.

The only way Social Media makes sense

So here’s my caveat to that (that one thing I mentioned) – and the only reason I’d agree that you can do both. Repurposing. Every owner should be repurposing their activities. Here are some examples of repurposing that could set the stage for a great social media campaign:

2. Anytime you’re in a position to give your opinion, analysis or consult on something in your industry, film it or record it with an .mp3 recorder. You’ve then got a podcast segment, YouTube video, transcript, blog post, FAQ, slide show, etc. . . . You don’t have to use it right then and there – but you can never go back to get it later.

3. Film your crew making the dessert special for the week, building a fence, fixing a roof, doing an estimate, or even cleaning the place. Don’t spend time setting the stage with that stuff – show your customers who you are. Make every moment something you could market. Besides you were going to do it anyway, might as well make it a marketing moment.

4. Ask the news media to come to anything you can. While you’re doing your thing – they’re driving business. (And then you can save the article from the news media website, and post it to your own. You can also print it and mail it to your customers. The ideas are infinite with PR).

I don’t think social media is always the best step for small business – unless it’s truly thought out and you know the costs associated with spending time on Facebook versus calling and thanking your customers – or any of the other 1,146 things you could be doing to increase revenue. A failure to plan is truly failure to avoid the many potential social media marketing mistakes that happen to many.

Turning Social Media into a Business Resource

Wow! I came across this social media idea after seeing the YouTube Channel of Taigan.com. And once I saw it the flood gates opened – this is the kind of stuff that separates the rookies from the pros.

I’ve told you time and time again, don’t ask people to “Follow you on Twitter” or “Follow you on Facebook”. Honestly, that’s just dumb and really gives no one a reason to do so.

If you can make a Favorites List on Twitter of only awesome e-mail marketing tips that you and others tweet, couldn’t you say “Follow me on Twitter and get access to the best email marketing tips on the planet”. I think so.

How about creating a contest asking your clients to load up videos to YouTube exclaiming what they love about your business? That’d be awesome for a pizza place. You could make a Testimonials Playlist and it will show up on your channel.

Honestly, the options are limitless!

Start-ups and Social Media?

Is social media appropriate for start-ups or small businesses? For that matter, is it appropriate for everyone?

I would argue that not every business can make successful use of today’s social media tools. Some businesses just aren’t ready, others don’t have the manpower required and others have clients who prefer to remain “anonymous”.

Social media isn’t a hands-off approach to business. As the world of social interaction has become an instant feedback generator, making your social media duties a once weekly event is about as infrequent as you want to go. Even if your client community is quite active and keeps the discussion fresh and new, 7 days without a presence would be considered long.

Since Twitter and Facebook, specifically, assign dates to everything, it doesn’t take much to look stagnant. With blogs you may be able to take dates off your posts and updates, but customers who leave comments don’t need dates to know they’re still waiting for answers.

Can a new start-up use social media effectively? Probably. But it will likely take some guts to do so (and a bit of ingenuity at that). Start-ups don’t typically have customers, cheerleaders or fans yet. That being the case, the social media interaction will likely lack the social proof often needed to help conversions.

Often times social media is part of the sales funnel, but typically is used for the “social proof” part of the funnel. That’s where you get your customers to rave and talk about their love of the product. That kind of “testimony” is great in pre-selling prospects before they formally enter the funnel.

I don’t disagree with small businesses starting social media but I think you need clear goals for it in the beginning, and a plan for what you want that that social traffic to both do and achieve. A good understanding of the reason people buy your product (their reasons, not yours) is a good start to knowing what you want them to achieve. The hard part is coming up with the plan and steps to help them achieve that.

Doing social media just to do it may be a waste of time. However, with success events, milestones and prospect achievements built in, you can track and hone the effectiveness and thus become more efficient over time.

If not you may end up with pages that aren’t interactive and don’t have much traffic – which could be a liability later for the prospects who are looking for anecdotal evidence that your products are good.

What are your thoughts on the top reasons small businesses should or should not use social media? I’ll go into further detail in the comments below why some companies can’t do social media even if they wanted to.

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Comments:

There are some companies that don’t stand a chance in the social sphere. Consider the gonorrhea prescription company. . . how about an incontinence company. . . and sometimes even a maid company. Good tutors will find it difficult to even get their customers to refer them. (Why would they if that means their tutor would be busier and harder to schedule?)

Some people just don’t want others to know what they’re doing, what they like, what they buy. Even maid service companies, a relatively ordinary and necessary service, have requests that the maids park in the garage and not send invoices.

If you don’t understand that part of your clientele, you may not only offend your customers by asking them to comment on your “wall” but may even scare some away in the fear that their “secret” arrangement is now with a “Social Media” company.