Take a Groupon deal, for instance. We see these everyday on our desk tops, in our email inbox and local newspapers. The advertising is very enticing for the consumer who sees a product or service that is discounted sometimes by 95% of the original price.
This type of "deal" could encourage a lot of customers to purchase this discounted service, which could increase sales for the merchant who is offering the deal, That is the upside of this scenario. The downside could be a nightmare and even loss of profits. As an example, below is an excerpt from an article I read recently where the business owner thought it was a good idea to drum up business for her small bakery -- offer a Groupon deal. Well the deal almost left her bankrupt.
"The Daily Mail reports on the tale of Rachel Brown, owner of "Need a Cake" in England. She recently went on Groupon and offered a dozen cupcakes for $10. That's a 75% savings off of the regular price of $40.
Brown was expecting just a few extra orders; instead 8,500 customers took her up on her offer. She had to up production from her usual 100 cakes a month to a staggering 102,000.
"Without a doubt, it's the worst ever business decision I have made," Brown said. "It's been an absolute nightmare."
Brown had to hire an extra 25 people to go along with her full-time staff of eight. It all cost her nearly $20,000, wiping out an entire year's profit.
"I've been running this business for 25 years and I thought I knew what I was doing, but this offer wasn't everything it seemed to be," Brown claimed."
Needless to say, this business owner would not be doing any business with Groupon again.
Most businesses have a Facebook Fan Page. If you're a business owner and you don't have one, then you are missing out on communicating with the everyday consumer. Using your Facebook Fan Page is one of the best ways to spread the word of a 'deal' you are offering on your products and services.
In the case of the business owner above, if she had used her Facebook Fan Page after signing up for PeopleDeals, she could have created a coupon ( which increase in value the more its shared) for a discount on her cakes. She would have been able to set the day and time period she was offering the discount for, giving her full control on how many customers she wanted to attract.
So as the saying goes, not everything is as good as it seems.
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