Daily Deals, Customer Care
Carol L Schroeder -- Gifts and Dec, 12/9/2010 5:39:05 AM
The power of groupthink, and hiring holiday help.
Q: Our local newspaper has rolled out a new promotional program modeled on "Groupon," which they say is the latest trend in advertising. How are these coupons different from any other coupon offer?
A: Groupon, at barely two years old, is the granddaddy of daily deals, cleverly combining social networking, online marketing and a local focus. Groupon is only active in cities where they can attract at least 15,000 e-mail subscribers, largely women aged 18-35.
Every weekday morning Groupon sends these loyal subscribers a local Deal of the Day, usually a deep discount on products or services. Today's Groupon in Madison, WI, for example, is $70 worth of clothing for $30 at J. LaMore, one of our neighboring shops. But you can't just "buy" this offer - if 40 people don't sign on by the deadline, the deal doesn't go through for anyone. The idea is that those wanting to get in on the bargain will forward the information to their friends, or post a message on Facebook.
This social networking feature is one of the hallmarks of the Groupon concept, and the other is their sharp photography and snappy writing.
Though Groupon focuses on mostly local businesses, it takes advantage of e-commerce by linking to the website of the shop, spa, event or restaurant. Another of our fellow businesses on Monroe Street set up a special page in preparation for his $60 Groupon offer showing what $60 would buy in his store. He also figured out his maximum cost in advance, knowing that Groupon keeps about 50 percent as a service fee for each coupon sold. By calculating this expense, plus the cost of goods sold to those who redeemed the coupon, he could see how much he would pay for this promotion.
One difference between Groupon coupons and regular coupons is that, since subscribers have paid for them, they are much more likely to redeem them. For this reason, it is essential that you set a maximum number to be sold, especially if you can't afford to redeem more than a certain amount. There are a number of stories of businesses driven close to financial ruin by neglecting to set a cap on their Groupon offer.
Today many others trying to imitate Groupon's success (over 12 million subscribers so far, in 90 cities). Our local newspaper, for example, is offering "Today's Deal." But it doesn't have the zippy graphics and writing of Groupon, or the loyal following.
One of the big advantages of Groupon is that even if subscribers don't buy your coupon, they will probably read about your business. By having only one offer a day, Groupon focuses the attention of all its subscribers on its daily message.
If you don't want to participate in Groupon, or one of its imitators, you could do your own "deal of the day." Instead of trying to offer something all year, focus on a specific time period such as the Twelve Days of Christmas. Come up with a time limited offer for each day, and publicize it in an e-mail blast or by posting it on your Facebook page. You won't attract new shoppers this way, as you might on Groupon, but you could create some excitement among your loyal customer base, and bring them into your store more often during this holiday season.
Cultivating Customer Care
Q: We need to add to our staff for the holiday season, but we hate to add unnecessary expenses to our bottom line. What is the most effective way to stretch our personnel budget?
A: Your current employees may be willing to pick up additional hours, especially if you stress the fact that you are only asking for help for the short period between Thanksgiving and Christmas. Most of our employees work every other weekend the rest of the year, but do every weekend for those few weeks. Current employees have the advantage of already knowing your stock and your customers - and they save you money on training.
Once you've filled in as much of the schedule as possible with current staff, put together a "wish list" of hours you need filled in order to offer stellar customer service. Keep in mind that the cost per hour of an employee can easily be made up in added sales during this busy season. You don't want to have customers frustrated by a long wait to check out, especially at a time when shoppers are stressed and short of time.
Current employees have the advantage of already knowing your stock and your customers - and they save you money on training.
You may find that it is easier to hire two employees for fewer hours instead of one for all the hours you need filled. Part-time schedules can often dovetail nicely with school, family or other work commitments. The key is to state your needs precisely, and to not vary the schedule from week to week. When we interview potential employees, we often hear that their schedules in previous jobs changed all the time, so they couldn't depend on their income level or make other plans.
Once you have a clear idea of your open shifts, create a short form with these schedule needs, the hourly pay rate and any benefits, and a brief job description. Hand this form out together with a job application, and you'll find that it answers most of the applicant's questions.
We have had great success posting job openings on Craig's List (saving thousands of dollars compared to classifieds) and on a sign on our door. You could also send a notice to your customer email list. Anyone who loves shopping in your store makes a great potential employee, and a seasonal hire could well turn into a long-term staff member. We hired Rae Erdahl for the holidays in 1979, and she's still with us!
Carol L. Schroeder is the author of Specialty Shop Retailing: Everything You Need to Know to Run Your Own Store, published by John Wiley & Sons. Send questions to orangetreeimports@mac.com.
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