[jasonl]

A few weeks ago I started a poll/topic about marketing costs  and spend .

Through this and other research I calculated that each new customer  that is not a repeat or referral  costs around  £40 to aquire .   the reason I wanted to discover this £ amount was that I was talking to Groupon about  marketing with them . 

The deal is    up to 20 m2 of carpeting cleaned for £28  , any furthur cleaning is at £2.50m2  Groupon keep 40% of the deal  so I get £17 per clean , which equates to £57 when the £40 original marketing cost is added in , plus the opportunity for other work and a regular customer , which in my experience is about a third of all jobs visited.

It is not about making a profit on the first clean , it is about building a customer base.

I can see it would not work for everyone , and that I will make a loss if every job was just the standard £17 , but this is a marketing exercise  , and I will cover diesel and materials . I have relocated so have little work anyway .

I spoke to another carpet cleaner who sold 438 deals in a day , and it has  provided enough customers  to establish his business    ongoing .   
Sheffield has double the members than his town .

[Neil Williams]

But if a customer thinks that Groupon is the way they want to 'shop' for services (like the one I mentioned yesterday) and have paid £22 for 2 rooms to be cleaned, why would they come back in 12 months time and pay £88?
Sorry but if I thought I could get a massage done for £8 through groupon there's no way I would get it down in future for 4 times that amount, or any other service I could buy from there.

[jasonl]

Groupon is a proven marketing concept , and once a foot is in the door  , people do pay full price , the demographic of groupon  customers is of one which  matches  the customer type I am looking for.

[David_Annable]

You have answered your own question.

Dave

[Neil Williams]

Groupon is a proven marketing concept , and once a foot is in the door  , people do pay full price , the demographic of groupon  customers is of one which  matches  the customer type I am looking for.

Of course it's proven from a customers point of view, who wouldn't use it if you can buy something at 65% below normal market price.
From the service providers point of view it has got to be about 'up selling' to make it all worth while. If you are able to sell sell sell then it will suit, but I suspect a lot of people will never use that business again if they think they are going to pay £22 and end up on the day writing out a cheque for £88.
Don't take this wrong, but for it to work you have to use a variation of bait & switch to make it worthwhile. ie turning up cheap walking out rich.

[jasonl]

I will return and report once it goes live  , I am only looking for about a third of customers on repeat , that is my expectation , I am simply spending on marketing in a different way .

[derek west]

A few weeks ago I started a poll/topic about marketing costs  and spend .

Through this and other research I calculated that each new customer  that is not a repeat or referral  costs around  £40 to aquire .   the reason I wanted to discover this £ amount was that I was talking to Groupon about  marketing with them . 

The deal is    up to 20 m2 of carpeting cleaned for £28  , any furthur cleaning is at £2.50m2  Groupon keep 40% of the deal  so I get £17 per clean , which equates to £57 when the £40 original marketing cost is added in , plus the opportunity for other work and a regular customer , which in my experience is about a third of all jobs visited.

It is not about making a profit on the first clean , it is about building a customer base.
I can see it would not work for everyone , and that I will make a loss if every job was just the standard £17 , but this is a marketing exercise  , and I will cover diesel and materials . I have relocated so have little work anyway .

I spoke to another carpet cleaner who sold 438 deals in a day , and it has  provided enough customers  to establish his business    ongoing .   
Sheffield has double the members than his town .

how long have you been cleaning carpets?

[cozy]

Been reading about these sites/companies. LivingSocial is another one. They will get work in, but the damage is done to the market by people expecting lower prices. Like alot have pointed out, low prices ruin the market and drop customers expectations in the future.

Alot of rubbish priced jobs isn't better than a few properly priced jobs. After all, we are in this game to earn money, not keep busy. These sites will cause alot of damage in a short space of time.

Hasn't really kicked off here yet, (Germany) but I've read about them in Italy and some Eatern European countries.

[AJB]

Typically enough the customers perception of value is lowered
dramatically. They see the job done at a low price and percieve
that you are making a profit at that price, so ergo you and others
must be ripping people off at the normal price.
The only people who gain are the customers getting a cheap service.
And Groupon getting rich at YOUR expense.
I've heard of cases where the offer is 50 packages. Only for Groupon
to sell 450, guess who gets the s*~t from the customers when you
cannot physically provide the service in time span on the offer.

[Shaun_Ashmore]

Jason you have it in one, "the demographic you a looking for" you can't really lose IMO.

Shaun

[jasonl]

A few weeks ago I started a poll/topic about marketing costs  and spend .

Through this and other research I calculated that each new customer  that is not a repeat or referral  costs around  £40 to aquire .   the reason I wanted to discover this £ amount was that I was talking to Groupon about  marketing with them . 

The deal is    up to 20 m2 of carpeting cleaned for £28  , any furthur cleaning is at £2.50m2  Groupon keep 40% of the deal  so I get £17 per clean , which equates to £57 when the £40 original marketing cost is added in , plus the opportunity for other work and a regular customer , which in my experience is about a third of all jobs visited.

It is not about making a profit on the first clean , it is about building a customer base.
I can see it would not work for everyone , and that I will make a loss if every job was just the standard £17 , but this is a marketing exercise  , and I will cover diesel and materials . I have relocated so have little work anyway .

I spoke to another carpet cleaner who sold 438 deals in a day , and it has  provided enough customers  to establish his business    ongoing .   
Sheffield has double the members than his town .

how long have you been cleaning carpets?

21 years but have just relocated , this kind of marketing is the future like it or not .

[derek west]

well i disagree but good luck anyhoo, hope it works for ya.

[cozy]

Good luck from me too. I can't see any advantage though.

[jasonl]

Good luck from me too. I can't see any advantage though.

Good !  the more people who cannot see it   , the better for the people who can! 

In my years as a carpet cleaner , the UK marketing trends  ALWAYS  follow the USA  this is another example , it is not about  cheapo council house people  wanting a cheap job , it is about people want value.

[cozy]

What, USA marketing always goes well? OK. That's why Amway got so big then, remember that fiasco?
Points have been made on both sides of the deal. I'm sure that 65% discounts will pull customers, rather the brave than me.

If that was a good deal, all you would need to do was print your own leaflets offering a 50% discount. Fill ya boots Jason.

[derek west]

Good luck from me too. I can't see any advantage though.

Good !  the more people who cannot see it   , the better for the people who can! 

In my years as a carpet cleaner , the UK marketing trends  ALWAYS  follow the USA  this is another example , it is not about  cheapo council house people  wanting a cheap job , it is about people want value.

don't understand J

on one hand your trying to promote your idea on a forum. to encourage others to partake
and then your saying your glad we don't get it and its more for you. confused.

[Neil Williams]

, it is not about  cheapo council house people  wanting a cheap job , it is about people want value.

How did you come to that conclusion?
Put yourself into the minds of the public who are after some service or other.
If I were to say to you "I would carry out a FULL service of your 57 reg BMW for £22" then what would you expect to happen? It's either going to be a sub standard job or you're going to be sold some form of add on like full valet.
It's also going to attract the people we don't really want to work for. Break it down, £22 for 2 rooms equals what hourly rate after they have taken their commission, and that commission carries on over and above the intial £22?

Years ago I won one of those competitons for a professional photoshoot with a picture thrown in free. There was all the works in way of make up/hair for the wife and the picture (very nice) was 6x4 inches. But of course for x amount extra you can have the full blown pictures in frames. Sound familiar?

I've also just been told that Groupon are going to be investigated by an advertising standards authority as the overall idea of this breaks down to nothing less than bait & switch, but in a new way (Daily telegraph).

[jasonl]

The area to be cleaned is clearly shown on ads , the price for further work is clearly shown , there is no bait and switch here.

The biggest problem service providers have with Groupon is keeping up with demand.

[The Great One]

Hi

Another way of looking at this is that groupon will get you in the door and they may ask for extra areas or a sofa and chairs etc. You don't have to bait and switch.

Martin

[jasonl]

Hi

Another way of looking at this is that groupon will get you in the door and they may ask for extra areas or a sofa and chairs etc. You don't have to bait and switch.

Martin

Exactly