[Colin Day]

I find it disturbing that some members on here seem mock people who have fell foul of Groupon.

[jasonl]

I find it disturbing that some members on here seem mock people who have fell foul of Groupon.

....Whilst assuming that they have actually fallen foul of it , without actually knowing the business plan, costs, or any circumstances surrounding what actually happens during the operation of a Groupon campaign.

[Simon Gerrard]

Colin,
What do you mean, 'fell foul of groupon?'
It suggests that there were conned into doing it against there will, whereas in reality they made a business decision and in most cases it was a bad one, which is entirely their fault.

Simon

[Simon Gerrard]

Jason,
What do you have to sign up to with Groupon? Are you contractually obliged to carry out all deals, or is there wriggle room on that so you can not complete them all if you so wish?

Simon

[jasonl]

You have to carry out the cleans , in my latest one ,, about 50 have called so far , 2 or 3 people ring each day , I cary out the work geographically around whatever else I am doing ,in spare dead time. Most are bonnetted , so the costs are tiny.

 I have had one customer who was rude on the phone even at the time of booking , so I texted her to tell her that I would not be carrying out her clean , I emailed groupon , they said fine  and refunded her. 

In total only 4 or 5 jobs have not resulted in extras and or recommendations immediately , obviously there will be residual work to come too.

It is not for me ,about the initial payment I get , that covers expenses only - no profit , it is about gaining customers for life , which I know I have succeeded in already .

[Simon Gerrard]

Jason,
I think you might struggle to keep hold of customers that only came across you because they bought a cheap deal. In my experience low prices are something that you never really get away from, so the idea that they will pay full price next time may turn out to be fanciful. Plus, if they've gone for a Groupon deal this time, what is to say they won't go for one next time?
I wish you luck though, you've obviously thought it through.

Simon

[Colin Day]

Colin,
What do you mean, 'fell foul of groupon?'
It suggests that there were conned into doing it against there will, whereas in reality they made a business decision and in most cases it was a bad one, which is entirely their fault.

Simon

We've all made mistakes, standing at the side lines pointing and laughing is pretty pathetic by anyone's standards....

You yourself have the most successful carpet cleaning business I know of, by what you say. I simply can't understand why you feel like you need trod on the down-trodden...

[Colin Day]

I find it disturbing that some members on here seem mock people who have fell foul of Groupon.

....Whilst assuming that they have actually fallen foul of it , without actually knowing the business plan, costs, or any circumstances surrounding what actually happens during the operation of a Groupon campaign.

We aren't just talking carpet cleaners here, I've really looked into it and businesses are going bust over it....

[Simon Gerrard]

Colin,
I'm not beating the down trodden as you suggest.
The problem is that a lot of people think that first and foremost they are carpet cleaners, they are not, they are business people. Tesco sell beans, we sell carpet cleaning, both wholly different in one respect, but identical in another in the fact that the rules of business apply equally to both. Tesco may well have a loss leader on certain products to get people through the door, but if they took a loss on everything they sold they'd go bust.
For people to think that they can make money from a loss shows a huge flaw in their thinking as a business person.
The only people who can successfully do groupon are the more establish cc'ers who have other customers to make up the shortfall whilst they build their list of customers.
For a newbie to be doing it without the resources to take the losses is suicidal IMO.
This subject has been discussed more than any other I can remember and so the warning signs should be apparent to all.
Jason appears to have come up with a formula that may well work, but I think he is unique in that respect.

Simon

[Colin Day]

Simon,

Maybe I've misread your posts, in which case I am sorry...

What you say is true though and your advice should be listened to, especially for the newbies among us! (Which after nearly 4 years, I class myself as) 

I would never use Groupon, I have looked into if it could work for my business and the definitive answer is.... Not a chance....

I would NEVER buy from Groupon either, Men's Health have a section about Groupon on page 147. Makes for a very interesting read from a customer's point of view...

[robert meldrum]

Like almost any marketing method very, very few will ever get it right, which is just as well, as everyone doing the same, claiming the same, looking the same, makes it more difficult for prospects to make buying decisions.

Groupon can actually help in this respect but clearly needs to handled with caution, however...................

I've checked a number of Groupon users and a few have succeeded in getting their company details in from of thousands for the sake of completing a few deals at low, or possibly nil return.

That to me represents a massive opportunity which could have cost thousands and taken many months, possibly years to achieve.

Any marketing pro' will tell you. You must have and make known your businesses USP ( something you won't manage if you are singing from the same hymn sheet as Tom, Dick and Harriet )

If you can get a very positive message across to people who check your site on the Groupon advert about HOW WONDERFUL AND UNIQUE YOUR BUSINESS IS compared to THE REST you could be on a winner.

I only realised this yesterday when looking at a few adverts and the SMART ones had realised there was an opportunity beyond the deal.

[jasonl]

Thanks Hector, it is not a breach of advertising standards, they are misleading adverts which ad stands are looking into, firstly with the way groupon show them and then to the businesses offering them.

Advertising standards have very little power to do anything , when I was a CD i had several complaints from other carpet cleaners , mostly based on knocking ads , MOST were rejected by the ASA but 2 ads were judged to breach guidelines by the ASA I got a letter saying not to use the ads anymore , the letter then said that if I did continue to use them there was no penalty at all , they merely asked me not to run the ads.

[robert meldrum]

(  they merely asked me not to run the ads. )

That's interesting. So you could be totally unscrupulous and run a ( dishonest ) campaign which really pulled and made money. Then simply stopped and tried something else !

[jasonl]

Not dishonest ,  that would be a criminal offence !


As I remember we were supplied with ad copy by  CD head office which had claims on it such as

Will not shrink carpets like steam or shampoo can

or

Dry in Hours not days .


These statements, and ones like them obviously/understandably  got the back up of competitors  so they complained to the ASA. 

With regards to false discounts offered on Groupon , the worst they will get is a rap on the knuckles and loads more free PR , Groupon love it .  They spend half of their revenue on promotion ,free stories , good or bad , just make them more profit.  They are looking to IPO with a value over 10billion dollars  and the more subscribers for them the better.

[Glynn]

It appears some Grouponeers are long est CC's, so my question is
are you not busy enough already with the years of satisfied clients you already have ? and if so how on earth do you have the time to carry out such ridiculously low price work ?.

Surely anyone who has been in this trade for any substantial length of time would have built a decent customer base and would therefore have no need to offer their services for next to nothing, if anything it makes them look desperate.

Just my thoughts and Groupon certainly isn't for me.

[jasonl]

I have relocated , the work is not done cheap after all the extra work I pull in , and its free to get the leads .

[Glynn]

I know several who have relocated, they didn't have the need to work so cheap, why do you ?.

[jasonl]

I am not working cheap , I do not have the working capital available to spend on promotion in traditional way , it is tied up in land .

[Simon Gerrard]

Simon,

Maybe I've misread your posts, in which case I am sorry...

What you say is true though and your advice should be listened to, especially for the newbies among us! (Which after nearly 4 years, I class myself as) 

I would never use Groupon, I have looked into if it could work for my business and the definitive answer is.... Not a chance....

I would NEVER buy from Groupon either, Men's Health have a section about Groupon on page 147. Makes for a very interesting read from a customer's point of view...

Hi Colin,
I started out in business when I was 20, I’m now 56 and everything I, or my family have has come from my own efforts. I used to deliver milk for my father-in-law and decided to start a milk round of my own. My father-in-law sold me the milk at a profit margin of half a pence, even though he was on 4.5p. I had to tolerate this as you couldn’t buy milk from a wholesaler until you had 20 gallons per day. So I built my round up before going to work for him at 3.30 in the morning.
The .5p profit was my Groupon. I was losing money on every pint of milk I delivered but made a few quid from extras, eggs, potatoes etc, also not unlike groupon. I knew that if I kept going I’d soon get my 20 gallons and my losses would turn to profits, which took a year of graft to achieve, but I got there. In the meantime all of my living costs were covered by my wages from my job so I could afford to take the losses. I ended up with two round selling 200 gallons a day.
The reason it was possible was that people needed milk every day, so once you got a customer you had them for good and that is what made my milk groupon work. The problem with carpet cleaning is that the repeat time is 18 months – two years before you may see that customer again. I say MAY because even when you do a fantastic job, some people don’t come back, forget who you are, go for someone cheaper etc and so they are never really your customer. The business conundrum in doing Groupon is: Can I afford to take the losses? Will I be able to blunt those losses by selling extras, add ons? And will these people come back to me next time around? These questions define the risk you are taking and that is why in the vast majority of cases groupon isn’t a good idea.
I used to be a consultant for the Prince’s Trust and would help start up businesses in the first few months. Astonishingly all of my people, hairdressers, window cleaners, undertakers, Mobile DJ service etc couldn’t tell me what their breakeven point was, the point at which you have neither lost nor made money. If you don’t know that you cannot make any decisions about your business, at least not good ones. I developed a very easy to use Budgeting system on an Excel spreadsheet that updates automatically as you change or add a value which gave the vision they needed to see their sales targets and make good buying decisions. If anyone wants a copy email me: simon@gerrardscarpetcleaners.co.uk I, just out of interest looked at ours from a Groupon point of view and saw that we would need to subsidise every groupon job by a lot, or would have to do an awful lot of up selling to make the figures stack up. The decision was an easy one, not least because of the repeat time and the fact you really can’t answer 'yes' to the really poignant question: Will these people come back to me next time around? In my milk groupon scenario was a very certain 'Yes' and formed the basis of everything I have today.
Groupon is an investment that may pay off in the long run, but certainly isn't, in my view, a money making scheme in the short term. Indeed, it could be a recipe for disaster, especially for the less experienced.
Simon

[jasonl]

Excellent post Simon , BUT most of my Groupon customers recommend someone straight away , and or give me furthur bookings/extra work on the day, which makes it more than worthwhile.