I love group buying sites. Whether it is Groupon, Living Social, or local fave Specialicious, it doesn’t matter. I love a good deal (and, according to my husband, I love buying crap I would never dream of spending money on were it sold at regular price). I have purchased haircuts, car detailing, carpet cleaning, mini golf, dry cleaning, tattoo removal, clothes, frozen yogurt, dinners out, house painting, yoga classes, garden supplies, a photo shoot and more.
And, as a marketer, when I get a chance to speak with the business owner who chose to market their business via a group buying site I often want to find out their impression of the process. Do they like working one group buying site over another? Do they get a lot of business? Is it too much business to handle? Do they make enough money overall to make it worth the initial hit from selling their product at almost always 50% off? And, the most important question, do they get repeat business?
As it has been a few years since I started pestering entrepreneurs about their experiences with group buying sites, I have heard many stories about the back-end side of the process. And to be honest, they are quite often the same and sometimes sound like a rendition of ones experience doing business with the mob (which site most often elicits that response will be kept to myself). However the one answer that varies almost every time I ask it is this: Do you get repeat business out of customers who find you via one of these sites?
The general consensus as to whether group buying sites promote customer loyalty seems to be that there is no general consensus. Some hair salons see a customer once and then never again. Some restaurants and boutiques end up with customers for life. However the most interesting antecdote that I have been privy to came from the owner of a local tattoo removal studio.
For background, I have a tattoo I have wanted to get removed since shortly after I got the tattoo, but was just too chicken to do anything about it. However a Groupon special for a local tattoo removal studio was just the impetus I needed to finally get something done about the poor choice I made many years ago involving a heart and my ankle.
The owner of the studio, Ken, was great. He realized that I was super duper nervous (or maybe he is just used to his first-time clients being extremely on edge) and engaged me in conversation to put me at ease. I asked him my usual questions about this experience with the group buying process, and he told me that he has seen many customers who are “chasing the deal”. Tattoo removal takes more than one session—usually at least 4 sessions. And apparently there are customers who find a coupon, get one session with the issuer of said coupon, then wait for another coupon from another studio, and repeat.
I am assuming that this isn’t a trend limited just to this niche market—is “chasing the deal” really becoming that popular? Is there really such a large subset of customers who care only about a really good deal that they overlook all other aspects of a buying experience that promote customer loyalty? What do you think?
It is so common now, these deal sites. From what one business told me they stopped doing Groupons and the like because they only attract, “bottom feeders”.
Any business that caters to these type of people will be out of business real soon.