The death of profit
The other day I am driving by a sandwich shop I was meaning to visit for the last month or so and out of the corner of my eye I see a “for lease” sign. My first thought was, wow… they were so heavily promoted. Just last week I saw a Groupon for them a few months back a Living Social Coupon, then they were in Halfdepot.com and CLDeals Creative Loafing and their facebook had about 500 fans and urbanspoon had them at 85%… wait now I get it… they weren’t really marketing. They were in an act of desperation. They were not using these companies but these companies were using them.
Now I am going to discuss a very touchy subject that I probably should not be writing about because I am actually involved in marketing and self promotion but there is an issue out there that probably every business owner wants to say but they don’t for the fear of sounding defensive or arrogant. So I will try to be as tactful as I can.
There is an epidemic out there and no one is talking about it. We as a society and as a community have couponed ourselves to the point that any business affected by coupons can’t charge a fair price for its services. The restaurant feels that if they don’t release a Groupon like its competitor than they won’t get the exposure. The Groupon rep. tries to sell the business on the VALUE of a customer. They talk about loyalty like and evangelist talks about heaven. There is only one problem in that rational. At the end of the day the dollar trumps loyalty in 99% of cases. If I offered you sushi, nails, massage, oil changes, and lets throw in a really good house cleaning all at 50% off with a total savings of $200 and then next month offered you the same services with new companies for a total of another $200 would you take it. In most cases you would and you know would. Now unless one of these business did something miraculous you would forget about them. So one could argue that businesses have to become exceptional or the borderline of miraculous or others would say that its a failed business model.
At Stone Soup, we have eliminated all coupons and discounts as of now. We are in the process of setting up a living social deal for 4 months during summer to boost a little foot traffice but its very targeted. We have also put in place a program called perka (getperka.com) that gives a 10% for downloading an app that is essentially a virtual punch card. 10% off to download then 5% on visits and a 10th item free after the purchase of 10. This way loyalty is built on a solid customer base and we are able to control the giving. The bigger question is as a consumer do we want places to survive and flourish? Do you want companies that are responsible to succeed. Your thoughts? Do you feel stone soup is priced well? do you feel like businesses are hurt by coupons or do you think it drives business.
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