I’ve written quite a bit about how bad a deal running Groupons is for many businesses, including the extremely lopsided merchant agreement and the potential for Groupon to damage businesses in the long term by destroying Yelp ratings. It occurred to me that I haven’t written about what small businesses should do.
It’s quite simple:
- Claim your Facebook business page.
- Sign up for Twitter.
- Get business cards printed up with your Facebook and Twitter IDs. Online, these can be had for under $20.
- Build relationships with your existing customers and get them to connect with you online.
- Update your status once or twice a day.
This is really the easiest way to get started in online marketing.
If you use Facebook for personal reasons, you can do it for your business. If you don’t have the time to update both Facebook and Twitter, you can just update Facebook and use a tool to publish it to Twitter. (or vice versa.) You can do this in less than a minute each day and you can do it from your cell phone. (Even if it’s not a smartphone!)
Some of the things I like about this approach:
- It’s really simple.
- It’s almost free. (Just the cost of your business cards.)
- You own the list that you build, unlike with daily deals where the provider owns the list.
- Unlike Groupon, there’s no potential for it to cost you tens of thousands of dollars.
- It doesn’t rely on deep discounting and doesn’t damage your price point long term.
It may seem intimidating to have a blank slate. Or you may be discouraged about having to tweet every day. Don’t sweat it; just start. You’ll get into the groove. And if you don’t tweet for a day or two, don’t worry about it. Here are some ideas for what to share with your subscribers:
- Any specials you may be running. These needn’t be deep discounts, it could just a special entree you’re running for the night (at full price).
- Pictures of your business and what you’re offering.
- Notices of special events, such as guest artists, musicians, etc.
- Interesting stories about your industry.
- In advance of holidays, tweet if you’ll be open. (If you’ll be closed, share that along with a holiday greeting.)
- For extra credit, put videos on YouTube and share those.
Here are a few businesses that I think are doing it right: Posies Cafe, Radio Room, milk + honey spa, Humphy Slocombe Ice Cream. Watch what they do and you might be inspired.
A few questions you may have:
Will this get me hundreds of new customers?
No. But most small businesses don’t need hundreds or thousands of new customers. In fact, that’s the worse thing for many businesses. The crush of demand created by Groupon and LivingSocial can wreak havoc on your staff and turn away your regular customers.
For many businesses, getting a few extra customers each day can make a big difference. That’s what this approach can do for you.
What about the dozens of other sites that offer local presences?
Like starting a new exercise regimen, it’s important to start with something you know you can manage so that you actually do it. Facebook and Twitter will provide the most bang for the effort.
Why don’t other people talk about this approach?
Because it doesn’t make them any money. Groupon’s biggest innovation was to take online advertising and make it less targeted and more expensive. That made it possible for them to pay sales people to tell businesses what a great deal Groupon is and why they should be honored to be selected to run one.
Think about the last time you were at a visitor’s center. Remember the glossy brochures? You could learn about guided rafting, hot air balloon rides, horseback riding tours, ziplining etc. But you probably didn’t see brochures for nearby hikes, beautiful beaches or waterfalls. That’s because those things are free.
Sometimes the best things in life are free — and for small businesses, Facebook and Twitter are the best things.
I agree that there are many alternatives to daily deals (some are free money-wise but may require time investment) and I too certainly do not advocate jumping onto the daily deals bandwagon (as Rocky points out, there could be ugly consequences).
However, I have met many small business owners who do not have an *active* Facebook account and Twitter feels like a another universe to them (I practically live on the internet and Twitter is still fairly incomprehensible to me). These business owners are smart people who are fantastic at what they do, from designing shoes to running restaurants but the idea of writing anything (even what seems like a simple tweet) is way too daunting. And printing business cards or thinking up promotional events are beyond their scope of interest/know-how.
But reading posts like these that tell them how simple it is to do these things, which should be motivating and enabling, makes them embarrassed to admit that they feel lost and unsure about the exact steps involved. And they feel increasingly anxious and guilty that they are so bad at marketing. And so these business owners procrastinate doing anything (the truth is even marketers often dislike marketing their own company).
Along comes Groupon with what seems like a “use straight out of the box” solution and so they sign up and they learn the hard way (by losing money and customers) that the few businesses that ran successful daily deals were very prepared and had proper systems set-up.
Each day that a business procrastinates setting up that Twitter account or having a webpage with good copy or running useful offline local promotions is another day that they are not bringing in customers. And some fail and close down from having insufficient cash flow to see them through the initial period. In those cases, it’s possible that a *well-run* daily deal could have given them the leg-up they needed.
But how can they prepare for a daily deal? Well, we run low-cost workshops (or more bespoke consultations) and we’re also building easy-to-use calculators to help businesses to compare the pros and cons of the deals (without the bias daily deal sales reps). But this isn’t just a plug for our business, we are genuinely concerned that businesses consider marketing in a more balanced/more effective way; and there are other ways to get help too (there might be government advisory initiatives for small businesses in your area for instance).
Anyway, all the best with your marketing efforts and feel free to drop us a line if you would like more information. Andrea@couponguru.info.
Rocky, what about the clients who don’t have an I.V. hooked up to them from Facebook, Twit, etc? I work with several and various business owners who are successful but like you say a “few extra clients a day is more helpful than masses” and they have never had a Facebook page or tweeted once. Bottom line their success comes from treating every client who walks in how they would want to be treated if they were the client and hence these clients walk out the door and physically tell every person in their world about said business. Is physical word of the mouth still the best way to gain new clients? I believe it still is notwithstanding my views on social networking. I am not against advising social networking and sure for some businesses whose clients use this medium it will work for. Furthermore, any research on does a person remember what is said directly by another or read amongst thousands of other words and distractions on Facebook, etc?
Rocky, I love your writing style and read every word (I agree with every view you have about Groupon) and one thing I have taken from you is you think through to questions most don’t want to pose or run from! This being said, what are your views on “can a business in today’s social networking driving society thrive massively without any social networking and continue to do so?”
Hi Rocky, thanks for another great take on a significant challenge.
One of the big problems facing small business is time. Small businesses have already been burned by the promise of email to be a more efficient way of handling correspondence. Instead, the responsibility of timely email followup adds an additional burden to small businesses. In fact, that pain point is what led to terms like “email bankruptcy”. The conceit of Facebook and Twitter is that more efficient relationship building will lead to more sales, but at the cost of (1) constant care and feeding and (2) an always-changing landscape where Facebook et al can and will capriciously change the rules of the game.
The unfortunate reality is that new communications technology is a requirement for businesses who want to stay in business. At least with email, the basic dynamics of sending and receiving haven’t changed in twenty years. Faced with the growing complexities of social media, Groupon’s value proposition, as Hobbesian as it may be, was breathtaking in its simplicity and results.
What results? According to Rocky very few businesses have actually benefited from Groupon and they hide or mask their actual figures. When a company does this it raises doubt about them as a whole and not in part. Correct me if I am wrong as after reading all of Rocky’s research on them I feel like I could be called as an expert witness in any court of law why a business should not consider Groupon.
Brian, are you affiliated with them? Just curious.
Its interesting to see the synergy between your writing here Rocky and a piece of research done by Michael Mitzenmacher et all from Harvard and Boston University last month. The study can be found at http://arxiv.org/abs/1109.1530. Basically among other conclusions the researchers point out that major markets where Groupon and Living Social have been established have become flat or are experiencing a level of decline. I would suggest that as per your analysis and theirs it is due to the fact that there is little equity or balance for sellers in the Group Discount model and once the bloom of fast traffic is more carefully considered Group Discount might have many first time buyers but fewer and fewer who continue to sign up.
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