Nov 14, 2011
Every time I turn around I see another Daily Deal Site that is trying edge it’s way into my inbox. Groupon and others have rapidly shed light on business that needed a boost in this struggling economy and I’ll admit, I have been party to a few deals myself. These sites typically offer from 25%-90% (Groupon states 50-90%) off on all sorts of products, events and services. The idea is simple, offer a “sale” and get a lot of people through the door, even if you break even or loose a little money. Then you have created a lot of new, potential return customers! Great advertising!
Everyone Wants a Daily Deal!
When Google was rejected from buying Groupon, they decided to kick start their own daily deal site to be a part of this growing trend. In addition to starting their own daily deal site, Google Ventures invested in Austin, TX based WhaleShark Media, a daily deals portfolio company. In addition to Google, Groupon, Living Social, etc., Facebook decided to throw it’s hat into the daily deal ring. After only four months, Facebook pulled it’s daily deal offering. It is more than likely because there are too many sites competing for the market and many of these sites have seen a downturn in margins.
What’s my experience?
You may be wondering why an Austin real estate broker is talking about what’s missing from these multi-million dollar companies…I mean, some of these companies require an MBA just to get an internship! Well, it’s because I have a computer, a website and an opinion. I recently took part in the utilization of one of these daily deal coupons for a local bar/restaurant. We did our homework, read some reviews online (I think there were 6 total) and decided to go give it a try. We showed up and were greeted promptly, taken to our seats and were well taken care of by our waitress. I read the menu and decided what sounded best to me and ordered it. My order consisted of a blue cheese burger and fries, pretty simple. While waiting for our waitress, I read the front of the menu and was very excited with the restaurant’s pride and enthusiasm regarding the quality of their food! Now, I must preface this, I am not a food critic, I’m not a food elitist and I don’t generally eat at fancy restaurants, but I do know if something is good or not. When our food arrived, I was excited! Then the basket of ketchup, mustard and mayonnaise packets were placed in the middle of the table. I’ll admit that I was a bit surprised that they didn’t at least have a bottle of ketchup so that everyone at the table didn’t have to open a bunch of tiny packets. Not that big of a deal, still. Very quickly I noticed what I thought was mayonnaise dripping out of my burger and upon inspection, determined that it was blue cheese dressing…not exactly what I was expecting with a blue cheese burger, but hey, try new things. After starting into our food, none of us were very impressed with what we had ordered and when the waitress came by to check on us and asked, “How is everything?” there were mutterings of “It’s OK” and “good” in our attempt at not hurting feelings. We used the “deal” coupon and closed out, leaving a good tip. When we got to the car, we all started talking about how we wouldn’t go back to that place because it was a let down on the quality of food. That is where I started getting irritated.
The Problem
The biggest problem that I’ve hear about sites like Groupon, Living Social, etc. is that they have generated a “one time deal chaser” out of consumers. The chances are slim that I would have gone to that particular place for food on my own, so they did their job there, but the restaurant didn’t do a great job at making a first impression with us. Maybe since we had a coupon, the quality wasn’t there? I’m not sure? I am sure of the fact that the people from the online reviews either ate something different than we did, or that reviews can’t always be trusted. I also know that people are more likely to spread the word of bad food or service via word-of-mouth or social networks rather than leave a truthful review online. Ultimately, the restaurant is the one that get’s hurt in this scenario because they get a bad review from someone and they will never know that I was unhappy, so they may never get the opportunity to make a better impression on me. Fortunately I understand that everyone has “off days” where the cook didn’t show up so someone else had to take over, someone was distracted, or any number of things.
The Solution, In My Mind
I believe that Groupon, Living Social, Google or any of the others should come up with a feedback system for the companies that offer their products and services. It should be only open to those who have purchased the “deal” and used it, and the information should be submitted back to the deal provider. There will have to be some incentive to entice participation in the feedback, but there are many ways to do that. I think that the company that can achieve that solution will win the round in the daily deal battle for market share.
In small business, data is key to what is done. If money is spent on a marketing campaign (daily deal) spawning actual results (deals purchased and redeemed) that is great. But if there was a way to get more data on what the consumer feels/thinks after initial contact with them (real, honest feedback) that would be powerful. They could then make adjustments based on the feedback and then offer to “redeem” themselves. This would give them a second chance to get that customer back and possibly make them a repeat customer in the long run, rather than trying to find that next marketing silver bullet.
Well, that’s just my two cents. If you want to buy or sell a home either now or in the near future, give us a call, we’d be happy to hear your feedback!
About Stephen Smith
I grew up in Georgetown, TX, just a stones throw away from Austin. I moved to Austin to attend UT and entered the real estate world as an intern in Horseshoe Bay in 2003. As I was performing different tasks around the office and for the agents, I quickly realized that I wanted to be an agent. Within a year of becoming licensed, I was managing the office, updating agents on the happenings in the real estate world and listing and selling homes! In 2006 I decided to buy a condo and move back to the great city of Austin where I was to continue working in real estate. Having worked for several top 25 companies in the area, I learned from many talented agents and decided it was time to get my Broker’s license and start my own company. As fortune may have it, I was college friends with Ed’s wife and we realized that we were very good at different parts of this business and that we complimented each other nicely. From this, a partnership was born. My goal is to bring honesty and logic to my clients during their home buying and selling process! When I am not helping a client or looking for smart, ethical agents to join our team, I enjoy serving the Austin Board of Realtors, being on the lake and networking! Most of the time, I like to combine at least 2 out of the previous 3!
