Daily-Deal Study: Good for Customers, Bad for Businesses

The study, conducted at Rice University’s Jesse H. Jones Graduate School of Business by associate professor Utpal Dholakia, polled 150 businesses that did Groupon deal offers in the past year. The results: About one-third of participating businesses said their daily-deal offers were unprofitable

More than 40 percent said they wouldn’t do a daily deal again. Business owners who were unhappy with their deal experience reported Groupon deal users didn’t buy additional items beyond the deal offer. They also reported the Groupon customers tended to be one-time visitors and didn’t become repeat customers. [Más…]
Some of the study’s recommendations on how to make a Groupon promotion successful:

* Design your deal so that it will appeal to new customers and not cannibalize sales to existing customers.
* Know whether your business type is well-suited to benefit from a daily deal — the study found restaurants and education companies fared the worst, while salons and spas were the most successful.
* Offer the deal on merchandise you’re looking to unload or underutilized services you want to grow
* Design your deal to build a customer relationship. Make it good for $20 off on each of your next three visits instead of $60 off the customer can spend all at once.
* Avoid offering a discount off the total bill — you may end up giving away too much margin, as you aren’t in control of the size of your discount.

Has your company done a daily-deal offer? Would you? Leave a comment and let us know what you think about daily-deal promotions.

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If you haven’t turned on a computer lately, the hottest thing in online marketing is the daily deal. Mega-successful company Groupon started this trend, and a million imitators have sprouted. Another daily-deal startup, Woot, was recently snapped up by Amazon.com for more than $100 million.

So the business of being a daily-deal company is great. But how are those daily deals working out for the businesses that offer them? A new study says: Not so hot.
For the uninitiated, a business that offers a daily deal through one of these sites must provide a substantial discount — often 50 percent off. Then, a minimum number of customers must buy the deal, prepaying up-front and getting a coupon they present to the company. If not enough customers buy into the deal, it’s cancelled. The tradeoff is a guarantee of a large volume of new-customer traffic in exchange for the discount.

The study, conducted at Rice University’s Jesse H. Jones Graduate School of Business by associate professor Utpal Dholakia, polled 150 businesses that did Groupon deal offers in the past year. The results: About one-third of participating businesses said their daily-deal offers were unprofitable

More than 40 percent said they wouldn’t do a daily deal again. Business owners who were unhappy with their deal experience reported Groupon deal users didn’t buy additional items beyond the deal offer. They also reported the Groupon customers tended to be one-time visitors and didn’t become repeat customers. Leer más “Daily-Deal Study: Good for Customers, Bad for Businesses”

Looking for Entrepreneurial Tips in ‘The Social Network’

“People want to go on the internet and check out their friends, so why not build a website that offers them friends, pictures, profiles — whatever. You can visit, browse around, maybe it’s someone you just met at a party. I’m not talking about a dating site, I’m talking about taking the entire social experience of college and putting it online.”

Just like you, it all started with an idea — a concept that perhaps no one has ever come up with before, finding a niche that needs filling or a service that your customers can’t do without.

So before you dismiss The Social Network as inaccurate or a work of fiction, consider what you can learn from Facebook’s rags-to-riches story. And if you really don’t want to see the movie, read one of the books about Facebook’s rise to prominence. Check out Mezrich’s book mentioned above or The Facebook Effect: The Inside Story of the Company That Is Connecting the World, written by David Kirkpatrick.


The Social Network opens in theaters nationwide on Friday amidst a deafening buzz about Facebook‘s co-founder, Mark Zuckerberg. If people aren’t questioning the veracity of the film’s storyline, they’re speculating about it. Is it fact, fiction or just a dramatic, narrative account pumped up with a little extra Hollywood juice?

Controversy erupted months in advance of the release of the Aaron Sorkin and David Fincher film. Zuckerberg has publicly dismissed the film and the book it’s based on as works of fiction and has said he has no plans to see the movie. That’s certainly less extreme than William Randolph Hearst‘s alleged attempt to halt the distribution of Orson Wells’ Citizen Kane to curtail viewing of that “biographical” film — but it’s not much of an endorsement, either.

Of course, not all the folks at Facebook are happy with the depiction of their founder as a conflicted, ambiguous, untrustworthy visionary. The film portrays a character desperately trying to fit in with his Harvard surroundings, but lacking the social skills to do so. His coping mechanism is to develop a tool that enables him to interact with others at a distance and which now encompasses more than 500 million enthusiastic members.

Whether fact, fiction or a combination of the two, this film is a “must-see” for entrepreneurs — if for no other reason than the volatile emergence of Facebook is the story of every person with entrepreneurial ambition. This holds especially true for those of us who choose a level of personal, professional or financial risk in order to pursue an opportunity or a concept. That’s just what an entrepreneur does.
Leer más “Looking for Entrepreneurial Tips in ‘The Social Network’”

New App Clues You in on What People Think of Your Website

You want to know what I think of your new website. You got a sec? The folks over at Zurb have created an ingenious little web application that allows anyone to conduct a free test of what visitors remember about a website. And those visitors get exactly five seconds to form a first impression.

Called Clue, the site lets you quickly capture a page and create an interactive memory test that helps determine whether people understand what you’re trying to get across on your website. Just visit the Clue website, submit your URL and create a test that gives you a unique URL that you can then share with customers, vendors, employees and others. You ask them to take the five-second test and they, in turn, provide you with valuable feedback on what they think about the site.


You want to know what I think of your new website. You got a sec? The folks over at Zurb have created an ingenious little web application that allows anyone to conduct a free test of what visitors remember about a website. And those visitors get exactly five seconds to form a first impression.

Called Clue, the site lets you quickly capture a page and create an interactive memory test that helps determine whether people understand what you’re trying to get across on your website. Just visit the Clue website, submit your URL and create a test that gives you a unique URL that you can then share with customers, vendors, employees and others. You ask them to take the five-second test and they, in turn, provide you with valuable feedback on what they think about the site.

By giving users mere seconds to absorb a web page and recall the most memorable portions of that page, you’re able to quickly and accurately identify the best elements on that page — as well as the ones that don’t work so well.

Want to give Clue a test drive? Just visit http://www.clueapp.com/52+ and test any of the examples at the bottom of the page. If you’re impressed, the next step might be to sign up. Leer más “New App Clues You in on What People Think of Your Website”

Recession-Beating Success Strategy: Revive Your Brand

Remember Circuit City? Bet you think the electronics chain went out of business in early 2009. But actually, they’re back. Another company bought the brand name just a few months later and relaunched Circuit City as a leaner, meaner, no-doubt-more-profitable ecommerce site.

They’re not the only old-time brand making a comeback, either. If these stone-dead companies can find a way to revive their brand and get customers buying again, small businesses can do it, too.
Besides, Circuit City, brands that are on the comeback trail include:
Chock Full O Nuts — Sing it with me now: “Chock Full O Nuts is that heavenly coffee…better coffee a millionaire’s money can’t buy.” Despite the well-known jingle, this 80-year-old brand had faded to obscurity, and the coffee-shop chain closed in the 1980s. But earlier this month, the company’s first new coffee shop in decades opened in New York City. When the New York Daily News wrote about it, nearly 400 people liked the story on Facebook. Clearly, just the mention of this old brand had many riding a wave of pleasant nostalgia.
Commodore — Wow, what a yesterday brand in computing, huh? For those too young to remember, Commodore’s C64 was a popular early personal computer, but the company failed to keep up with the pace of change in PCs and went bust waaaay back in 1994. But it’s coming back — Florida entrepreneur Barry Altman is relaunching the brand with a $30 million marketing effort.


By: Carol Tice | //blog.entrepreneur.com

Remember Circuit City? Bet you think the electronics chain went out of business in early 2009. But actually, they’re back. Another company bought the brand name just a few months later and relaunched Circuit City as a leaner, meaner, no-doubt-more-profitable ecommerce site.
They’re not the only old-time brand making a comeback, either. If these stone-dead companies can find a way to revive their brand and get customers buying again, small businesses can do it, too.

Besides, Circuit City, brands that are on the comeback trail include:

Chock Full O Nuts — Sing it with me now: “Chock Full O Nuts is that heavenly coffee…better coffee a millionaire’s money can’t buy.” Despite the well-known jingle, this 80-year-old brand had faded to obscurity, and the coffee-shop chain closed in the 1980s. But earlier this month, the company’s first new coffee shop in decades opened in New York City. When the New York Daily News wrote about it, nearly 400 people liked the story on Facebook. Clearly, just the mention of this old brand had many riding a wave of pleasant nostalgia.
Commodore — Wow, what a yesterday brand in computing, huh? For those too young to remember, Commodore’s C64 was a popular early personal computer, but the company failed to keep up with the pace of change in PCs and went bust waaaay back in 1994. But it’s coming back — Florida entrepreneur Barry Altman is relaunching the brand with a $30 million marketing effort.

Why the Real-Estate Slump Could be Killing Small Business Hiring

1) A disproportionate amount of the products and services small businesses sell are tied to home sales. Independent realtors, small contruction contractors, interior decorators, decor boutiques…they all take the hit when home sales slow.

2) Many entrepreneurs have historically used their own home as their business-funding piggybank. With many homes now devoid of equity, there’s less cash cushion with which to take a risk and put on a new hire.

3) Banks’ lending was choked off in part because of their mortgage-loan problems. So just when the home-equity piggybank ran dry, banks also balked at loans.

I’ve interviewed Shane before and found him a very knowledgeable source. His theory makes solid sense, and reveals how home sales ripple through the broader U.S. economy.

What do you think? Is real estate the man behind the curtain in the small-business hiring slump? Leave a comment and let us know if your own home-equity situation has impacted your hiring decisions.


A lot of theories have been circulated for why small businesses aren’t hiring — the bank lending crunch, emotional nervousness about the economy, high taxes, low sales. This week, noted Case Western Reserve University professor Scott Shane weighed in with his theory: It’s all about the residential real-estate collapse. Leer más “Why the Real-Estate Slump Could be Killing Small Business Hiring”

Should You Charge Customers Late Fees?

When it comes to getting customers to pay on time, business owners typically use two approaches — carrots and sticks. Pay your bill early and you get a nice discount. Pay your bill late and you get smacked with a late fee.

The trouble is that neither of these solutions does the job it’s intended to do. Quick payers who’d pay on time anyway often take advantage of early-payer discounts, cutting into your company’s profit margin. Slow payers — often cash-strapped consumers or small business owners themselves — don’t have the money to pay late fees and may not pay you at all.

What’s the answer? Scrap this ineffective system of rewards and punishments and try to figure out why your customers are paying late and what you can do to make them pay you faster.


When it comes to getting customers to pay on time, business owners typically use two approaches — carrots and sticks. Pay your bill early and you get a nice discount. Pay your bill late and you get smacked with a late fee.

The trouble is that neither of these solutions does the job it’s intended to do. Quick payers who’d pay on time anyway often take advantage of early-payer discounts, cutting into your company’s profit margin. Slow payers — often cash-strapped consumers or small business owners themselves — don’t have the money to pay late fees and may not pay you at all.

What’s the answer? Scrap this ineffective system of rewards and punishments and try to figure out why your customers are paying late and what you can do to make them pay you faster.

For example, let’s see… Leer más “Should You Charge Customers Late Fees?”

Social Media Marketing to Baby Boomers

If your business or marketing department has dismissed Facebook and other social networking venues or social media platforms as digital playgrounds for indolent teenagers and twenty-somethings, this Pew Research Center study should be the blaring wake-up call to get you thinking otherwise.

More and more older adults are spending increasing amounts of time on the internet and on social media sites in particular. As you might suspect, they are connecting with old friends, keeping in touch with family members, building personal and professional networks to help find jobs and advance careers, and managing their daily communications. And wherever your company’s targeted demographic or secondary market is spending increasing amounts of time, you should be shifting increasing focus on your marketing efforts.


Facebook is not just for kids anymore, nor is LinkedIn, Twitter, YouTube or the many other popular social media platforms and services. As today’s Pew Research Center study entitled “Older Adults and Social Media” concludes, “Social networking use among those ages 50 and older nearly doubled over the past year.” In fact, the fastest growing demographic of social networking users consists of Baby Boomers ages 50 to 64. Nearly half (47 percent) of internet users ages 50-64 and about one in four (26 percent) users age 65 and older now use social networking sites, according to the study. Leer más “Social Media Marketing to Baby Boomers”