Skip to main content

Some Considerations of Promoting Business on Group-Buying Websites

Many consumers use group-buying websites like LivingSocial and Groupon to find deals nowadays. Certainly, these websites can help business draw traffic and bring in new customers, but I must say that promoting business on group-buying websites is NOT for everyone, regardless how effective this distribution channel may appear.

Why? --- That’s a great question. First, please allow me to share four examples of mine during my recent visit to San Francisco:

Example 1: City Segway Tours. The company promoted a 3-hour Segway tour at LivingSocial.com (50% off). The tour was fun, but the weather was foggy (fog is normal in San Francisco, right?). Because of the fog, the tour guy asked us if we would prefer to skip the Golden Gate Bridge and spend more time in the Palace of Fine Arts. Then, she added --- I hope you guys won’t post a negative comment online because of this, stating that “this tour sucks as we did not spend time observing the Golden Gate Bridge.” It turned out that we could barely see the water when we were near the bridge.

Example 2: San Francisco Whale Tours. I purchased the 1.5 hour San Francisco Coast and Tributaries Eco Tour at Groupon.com (50% off). It was a great and enjoyable experience. I posted some pictures and said good things about the Segway tour and the eco tour on Facebook. Some friends asked me for more details of the tours after they saw my pictures. I highly recommend these two tours to my friends based on my positive experience.

Example 3: The Imperial Palace Restaurant. I purchased a half-priced voucher for a dim sum platter at Groupon.com, without paying attention to the “fine prints” --- I could only redeem this voucher after 5 pm, but as a Cantonese, I do not eat dim sum at dinner time. Since I have purchased it, however, I would use it anyway. The dim sum was poorly made and tasted way below-average. I was planning to order additional dishes but decided not to do so after trying the dim sum. In the end, the restaurant charged me $2 per person for the tea, which usually costs nothing or up to $1 per person in the restaurants in Chinatown. Afterwards, I wrote a negative review on Google about this establishment. My friend, who is a Chinese immigrant living in San Francisco, also told me that she would tell her friends to stay away from this restaurant. Most of all, she would never come back to eat in this restaurant again.

Example 4: House of Dumpling in Union City, CA. I did not have any coupons or vouchers for this restaurant. My American friend took me there because he read some very good reviews of this establishment on Yelp.com and wanted me to try it. It was a small and nice place. Actually, I also got a chance to speak with the owner regarding the restaurant’s online reputation. She was very proud of her business, saying “we do not do any advertisements or promotions online or offline. Yet, people review their experience. We are running a small but very busy business. People are lining up for our dumplings and (as a result,) we do not want to actively promote our business. Otherwise, we cannot handle the crowd --- everything here is made from scratch.” Even though I disagree with most online reviews on Yelp.com about one thing --- this is not a real dim sum place (Cantonese food), but it is a nice place for “Chinese breads” and dumplings that are often found in Northern China. Regardless, because of its good food and good service, I recommended this restaurant to my Cantonese friends who live in the Bay Area.

From these four examples, we can tell that social media can manifest the Word-of-Mouth (WOM) effect in a large extent. In particular, a business or a group-buying website may want to consider the following:

  • WOM effect is a double-edged sword. If a business fails to deliver good service and high-quality products, the negative WOM effect could be detrimental. Accordingly, businesses must feel certain that they can create positive WOM effect before promoting their businesses online.
  • Businesses must understand their capability before making a sales and marketing effort online.
  • It does not matter if a business chooses to actively engage in social networking sites or not, people are talking about it anyway. One has no choice but to manage his/her social media presence (it works in the individual and macro-organizational level).
  • A company’ online reputation can be very quickly created or ruined by group-buying websites. Chances are those users who use LivingSocial and Groupons also love to talk about their experience on Facebook, Twitter, blogs, and other social networking sites. It becomes critical for businesses to pay close attention to these tech-savvy customers and address their needs.
  • Group-buying websites can help business to target the “right customers” by tracking users’ purchasing history, preference, and feedback. For example, recommendations of BBQ restaurants can be made to User A if s/he ate in a similar establishment before and liked the BBQ there.
  • Group-buying websites need to find ways to help companies develop business strategies of attracting repeat customers. It is good that group-buying websites can help businesses create a positive online reputation and draw traffic, but companies also want repeat customers. Accordingly, it is important to find out: Who will come back and who will not? What makes a customer come back even without a voucher or coupon.

What do you see from the four cases presented above? In your opinions, what needs to be considered before making a promotion on social media?


References:
The picture was downloaded from TheLunchBreakBlogger.com.

Comments

  1. Lawsuit because of online reviews: Wine Expert Lashed Out At Woman After Bad Yelp Review @ CBS Chicago.

    http://chicago.cbslocal.com/2012/01/13/lawsuit-wine-expert-lashed-out-at-woman-after-bad-yelp-review/#.TxGH6c_xsgs.facebook

    ReplyDelete
  2. This type of promotion is very new and I believe businesses must proceed with caution. Because it is so up and coming everything about it is not known. The way it seems to work is by relying on previous customers reviews. However how can one tell is these previous customers are legitimate? A business must also be very confident in their quality because one slip up can be shared with lots of people online. Another drawback is you need to be in a very populated area for these sites to work. I tried out groupon in NH and there was not a single promotion. My brother in Boston however was able to use it all the time.Despite these issues I think that internet commerce can be good. One find opportunities that they might have otherwise not had and also allows for some business to be discovered.

    ReplyDelete
  3. I am very delighted to reading after this blog. It has great contents which is informative and useful same time.

    SEO Reseller

    ReplyDelete
  4. The role of business services development is not limited to an increase in sales and customer satisfaction. Even if these things come naturally in the development of the service, development strategy Maker is to ensure the best use of company funds, management and improve the functioning of various departments, and resolve legal problems that may arise to continue to grow. Thank you for this post.
    Business Development

    ReplyDelete
    Replies
    1. Thank you for your comments. I agree. Sales & Marketing really starts with a P (for product and service).

      Delete

Post a Comment

Popular posts from this blog

Luxury vs. Millennials and Their Technology: The Ritz-Carlton (By Julia Shorr)

Embodying the finest luxury experience, The Ritz-Carlton Hotel Company, LLC has been established since 1983. In 1998, Marriott International purchased the brand offering it more opportunity for growth while being independently owned and operated. They are known for their enhanced service level as the motto states, “Ladies and Gentlemen serving Ladies and Gentlemen”. The luxury brand now carries 97 hotels and resorts internationally and is attempting to keep the aspects of luxury while keeping up with the trends of the technologically improving generations. The Varying Demographics of the Target Market The Ritz-Carlton’s typical target market includes: business executives, corporate, leisure travelers, typically middle-aged persons and elders, and families from the upper and upper-middle class section of society .   This infers a large range of types of travelers in which all are similar in that they are not opposed to spending extra for the luxurious ambiance. However, with

Is It OK for Hotel Staff to Wear Piercings and Tattoos?

Time has changed. I see more and more college students wearing piercings and tattoos nowadays, but is it OK for hotel staff to wear piercings and tattoos? The answer is “no, no, no.” According a report at USAToday.com, customers across the board do not want to see any hotel workers with pierced eyebrow, pierced tongue, tattooed arm, or nose ring. Some may argue that tattooed and pierced workers may seem more acceptable in edgy boutique hotels as compared to the big franchised hotels, but the survey results did not find any differences among a variety of lodging products. Many respondents believe people who wear visible tattoos and piercings are taking a high risk of their professional lives. If you stay in a hotel, do you mind being served by tattooed and/or pierced staff? What if you are the one who makes the hiring decision? References: USAToday.com: http://tinyurl.com/linchikwok08042010 Picture was downloaded from http://tinyurl.com/linchikwok08042010P

How Covid-19 will change the HR department? (by Vivian Tan)

With the current pandemic happening, many businesses are having a hard time. It is hard for them to maintain to pay all their employees, and many things have changed on how companies are running during Covid-19. Because of this virus, employees work from home and might lack the motivation to finish their tasks. Many businesses shut their doors infinitely and file for bankruptcy because it is hard to pay their employees, and there are not many businesses coming in. In the hospitality industry, the HR department must create policies and answer questions from the outbreak. It is also essential that they communicate with workers for any updates and make sure that it does not affect their daily operations.     When it comes to covid-19 concerns, the HR department should communicate with the employees for any updates on the virus, such as informing employees about policies, personal hygiene, posting signs around the workplace about symptoms of the virus, and wear masks. Also, asking employee