With Group Deal sites such as City Deal, Living Social & Gruupy becoming more and more popular in Ireland of late, and customers seemingly eager to snap up the huge deals on offer, it’s important to take a look at the advantages and disadvantages of these promotions to the businesses that offer them. While these deals are great for the consumer, who sometimes gains up to 90% off the R.R.P, they can sometimes provide little benefit for the businesses themselves.
The whole aim of running these group promotions is to build up a set of returning customers, yet, in too many instances it would appear, this does not seem to materialise. In a recent survey, 40% of businesses that have run Groupon promotions said they would not do so again with the main reason being that the customers they gained through Groupon didn’t return to the store as full price customers. It begs the question, what type of customers do you attract with these huge offers and will they return when the deal is over?
In addition to not being conducive to growing a loyal customer base, Groupon also comes under fire for charging a massive 50% commission on all the deals it runs. If margins are stretched and group deals are run at a loss, these promotions can actually have quite a negative effect on the business. It’s important to realise that, while going down the group deal route can work very well for some businesses, it certainly does not suit everyone and businesses debating over whether to use them should think carefully over how they would fit in to an overall promotional strategy before taking the plunge.
O2 has partnered with location services platform Placecast to enable brands to automatically deliver targeted SMS and MMS to more than 1 million opted-in O2 customers in the UK based on their exact whereabouts.
Starbucks and L’Oreal are the first two brands to test the location-based messaging service in the UK for a six-month trial period. The idea lets Starbucks and L’Oreal fence off geographic zones and push SMS discounts to O2 customers who enter those areas.
Starbucks is offering O2 customers 50% off discounts which will be delivered to individuals who have expressed an interest in food and beverage while L’Oreal will offer a Buy-One-Get-One-Free discount on a hair care product to customers interested in beauty.
The partnership between Placecast and O2 is a first of its kind in the UK and one that I find quite interesting. The combination of geo-fencing technology and carrier distribution is a potentially huge way to deliver mobile marketing messages to the consumers who want them.
This AXA iPhone ad is a great example of how to combine traditional media with digital media, giving it a social slant.
On launching their first iPhone app which guides users through the basic steps of dealing with a car accident, AXA went that step further and instead of just promoting it like any other app, they used a newspaper ad in conjunction with an iAd to give the campaign a unique twist.
The newspaper ad directed the reader to place their iPhone over an empty space on the page at which stage the iAd video would initiate. The ad includes a link at the end of the demo to download the AXA app for free, encouraging long-term customer retention while also showing the ability to seamlessly integrate offline and online media. Bravo AXA.
Check out this great Nike promotion that was run through Twitter and Facebook Places, a perfect example of how real world promotions can be run through social media. Followers of Nike on Twitter were told of a special codeword to use at the Koi Fusion Burrito Truck at a College Football game in the US. They were then required to check-in there on Facebook Places and order the ‘Destroyer Burrito’ which, much to their astonishment, was not a burrito at all, but a Nike sportswear jacket dressed up as a burrito. Brilliant!
I’m a Digital Strategist passionate about the intersection between technology and creative marketing. I recently moved to London after 11 years living in Dubai.