In 2012 there has definitely been an explosion of vouchers systems in the UK with the major players being company’s such as Groupon and Living Social.
Both of these major players have been around for some time and have established bases in the majority of cities around the UK.
But now there is also a growing trend towards niche sites such as Doorstep Deals in Swansea.
Do these voucher systems work and is it a good way to market your business?
They all have their good and bad points.
For example Groupon will usually deliver a high response rate with many people taking up the appropriate offer. But is it truly adding to your bottom line?
If you were a hairdresser in Swansea charging £100 per haircut and took Groupon up and their offer to promote your business you are usually encouraged to make highly targeted offers of say 65% discount.
Then you have to pay Groupon out of your remaining sale and are left with a very, very small return.
However, this may have been worth it if you are building awareness and brand, or was it?
Think about this …
You normally charge £100 but during this voucher offer you only charged £35. Do you really think for one moment that a person who only paid £35 this time is going to become a repeat customer at £100 per session?
I think not … so if a quick buck is all you are after this system may work for you; but building a business of long term regular clients I don’t believe this model works.
Then you have systems such as Doorstep Deals who are trying to work with the business owners and provide value for the business owners customers.
Their business model is to create a business directory of all business owners willing to offer discounts more in the region of 10 – 25%. This system means they don’t have a sudden rush for the vouchers which can overwhelm any local business.
Instead they have a nice steady flow of new customers who have more chance of becoming regulars if they treat them right as the move from the discounted price to the normal price is not such a jump when the offer is removed.
Both system have their strengths and weaknesses but if I was a local businesses owner looking to build brand, traffic and profits within Swansea, I know which system I would choose.
A good example of where the Doorstep Deal type of marketing would work better is for say Bistro’s in Swansea. By offering say a free piece of cake with every 2 latte’s the owner is encouraging couples to try a piece of cake they may never have bothered purchasing.
From a marketing point of view the bistro owner has now attracted more customers and even persuaded them to try some goods that they may not have been interested in purchasing. If they cake is of good quality there is a far better likely-hood of the patrons becoming regulars.
All in all one steady method for growing your business without handing over all the profits to a voucher marketing system.
The problem today for 