A simple idea: take QVC’s Home Shopping Channel business strategy to the web. That’s what Groupon is. A deal-of-the-day concept that started in Chicago two years ago.
The company offers one “Groupon” per day in each of the markets it serves. The Groupon works as an assurance contract using ThePoint’s platform: if a certain number of people sign up for the offer, then the deal becomes available to all; if the predetermined minimum is not met, no one gets the deal that day. This reduces risk for retailers, who can treat the coupons as quantity discounts as well as sales promotion tools.
But many companies have tried similar programs and failed. What has made Groupon a success in comparison? First of all, unlike others, it is geographically and behaviorally targeted. The coupon offers are specific to cities and/or metropolitan areas and the offers are specific to what customers say they are interested in. But most of all, Groupon is not afraid to be picky. They will only accept very legitimate savings offers from well-established companies. In other words, they have an air of trust. Who wants to use a coupon that doesn’t really save you anything? Most consumers fear looking foolish, so the trust factor in a coupon had better be high. And the higher the trust factor, the more successful the coupon.
Once again, successful marketing is all about trust. And Groupon seems to understand that.
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This opens a door into a whole new area of marketing. I couldn’t see how a local business could use non-traditional media before, but this changes everything.
And as a consumer, it will finally be easy to decide on a restaurant with friends.
I totally agree with Barbara’s comment. Thanks for sharing such an informative article with all of us. I’ve bookmarked your blog will come back for a re-read again. Keep up the great work.
What about businesses besides restaurants? I agree the web is great for eateries, but what about retail?
Being present in consumers’ mindset is a constant opportunity for businesses. So far only big brands have really embraced and leveraged location based targeting.
It would be interesting to see what are the field experiences you have witnessed for smaller businesses. How this new geo targeting will impact branding and marketing budget?
@score114
B Mews you are definitely right. Retail stores can benefit from geo-targeting just as much as restaurants can. It seems to be most popular in the restaurant business right now, but I agree that it will become quite popular with retail stores as well.
Score orange county – We are currently seeing a slow adoption to geo-targeting from (surprising enough) automotive dealerships. Many of our clients’ customers have “checked in” to the dealership when they have come in for service for for a new car purchase. But it will be interesting to see what other small business make use of this service as well.
This is a great article and so true! I have seen some of the positive results as my friends, that are frequenters of the service, get rewarded at places they check into most at. I’m excited to see how other businesses that adopt the service will implement it.
As a consumer my only concern is how much the almighty Google knows about me, but have learned to just come to terms with it as I’m not about to give up Facebook, Twitter or the rest of my online addictions.