I’ve been following with interest the recent threads on techcrunch.com about Coupon (specifically Groupon) and Daily Deal sites, and their ineffectiveness for Small and Medium Businesses. As a small business owner and one whose lively hood comes primarily from providing services to other Small and Medium Business Owners I would like to address this issue. My concern applies to Social Media as well as other marketing and advertising vehicles that target SMBs as clients.
Most small business owners are not managers. They have a unique skill set or trade that is in demand in the markets they serve and they are very – very good at what they do. They are usually understaffed and over worked and they may be at a point where they are grasping at straws trying to grow their customer base and generate new business or simply survive. Sometime, as a sales rep, you have to recognize the need for educating the client or even offer a little ‘hand holding’ to ensure that the client understand how to effectively use your products or services. Take the time and initiative to understand a little about the client’s business, his customer and his market; it may help you adapt a different and more successful approach to and for the client. It will help establish a better relationship and create opportunity for repeat business.
For the business owner it makes little financial sense to structure a deal where you are giving 50% off the regular price of a product or service and you are splitting the remaining 50% with the service provider (the coupon/daily deal business model). Most of the small businesses I know would not be able to operate for long with this strategy. Their margins are already too thin as it is. However, the strategy does work as a lost leader to generate traffic, increase awareness and build brand, and it creates opportunity for up sells, add on, and repeat business. The use of; in store coupons, phone number, address and email capture, and other opt in strategies can maximize the impact of your coupon or daily deal offer. In other words use the coupon/daily deal offer to get the attention and interest of a customer and then sell – sell – sell. Be creative and use every tool or strategy in your arsenal to keep them coming back again and again and again. Be less concerned with the initial sale, which is discounted, and more concerned about the opportunity for future sales at higher or full margins.
I believe that Social Media such as Twitter, Facebook, LinkedIn, YouTube and others as well as Coupon/Daily Deals sites such as Groupon, LivingSocial and others are excellent and inexpensive tools for growing Small and Medium Businesses. They must and should be introduced into your overall marketing and advertising strategy. You have to invest the time and energy in understanding how to maximize their effectiveness and use for your particular circumstance.
Joel M. Winston is Business Development and Sales consultant at Joel M. Winston & Company in Austin, Texas. He can be reached by email at joel_winston@hotmail.com or by phone at 310-991-4295.
