Groupon, the popular, online coupon service that launched less than two years ago in Chicago, has become a hit with money conscious consumers. But as it continues to expand to more and more cities including right here in Phoenix, local business owners are discovering the service isn’t without its downsides.

A Local Story

Dana Mule, part owner of Hula’s Modern Tiki at 4700 N. Central Ave., recently participated in a Groupon deal offering $30 of food for $15. The resulting hoard of customers that descended upon Hula’s to take advantage of the 50 percent off deal created havoc for Mule’s restaurant.

“Initially, it was disaster,” said Mule. “Far more people showed than we could accommodate, which made for long wait times … and angry people (which counteracts any benefit you’re supposed to get from this kind of marketing).”

How Groupon Works

The way Groupon works for consumers is relatively simple. Every day, a new local deal is featured on the Groupon homepage, sent to subscribers in a daily email and updated daily on the Groupon iPhone app. If the pre-determined minimum number of people purchases the Groupon within the established time frame, then the deal is active. If the minimum isn’t reached, then the deal is cancelled.

Mule initially decided to take part in Groupon to get additional exposure for his business and to expand his customer base, which are two of the key selling points Groupon uses to attract businesses. But as some experts have pointed out, there can ultimately be a backlash if the discount price ends up taxing a business’s ability to serve its customers, thus eroding their brand.

“The race to the bottom is never the way to get to the top,” said Ellen Malloy in a recent Reuters article regarding the Groupon phenomenon. Malloy promotes high-end restaurants in Chicago and blogs about the topic of discounting for Restaurant Intelligence Agency.

Groupon Threatens Customer Experience

According to Malloy businesses risk a cheapening effect on their brand and that the customer experience can be threatened if an oversubscribed offer ends up producing a short-term spike in demand.

Mule’s own experience with Groupon was uncomfortably akin to Malloy’s cautionary advice.

Groupon provides the business no tools to help manage the number of coupons sold – they up sell you to drive the value of the coupon up (making them more money),” said Mule. “They are not responsive with concerns – the amount of the sell given to the restaurant doesn’t even cover food/liquor cost – and they will not let you put a limit on the total number of Groupons you’d like to sell (we had to beg them to stop it at 1,000).”

After his initial experience with Groupon, Mule said he wouldn’t participate in the service again. He also advised businesses that require appointments, such as salons, to avoid Groupon altogether.

“We’ve talked to other businesses where they had sold so many Groupons that those were to only appointments they could accommodate for months, allowing them to take no additional new clients who would more likely become repeat customers,” he said.

So what do you think?

From 1992 to 2007, eCommerce has transformed from a $35.3 billion per year industry to nearly a $200 billion per year industry according to the U.S. Census Bureau. That’s more than a 500 percent increase total and an average of a 33 percent increase each year!

Email marketing ties in well with eCommerce, and is a popular online marketing channel used to drive sales. However, eCommerce companies need to be aware that gaining and retaining a loyal customer base is a key component to the bottom line, and if you’re customers aren’t happy, expect to see that bottom line plummet.

Here is my experience with one eCommerce company and their email marketing campaign. I was less than pleased with the over-all experience, and will share the pros and cons as they relate to both email marketing best practices and overall customer experience.

The Good

• This company did well in quickly shipping the item I purchased. I had the package in my hands in about two days.
• They were also helpful in recommending what size I should choose, the item of clothing fit just right.

Email Marketing: Room for Improvement

• A promotional email was sent to me for 20% off but never stated when the promotion expired. Tip: Always present the user with all offer details – from promo code to expiration date to any hidden terms.
• I received an error when I went to make my purchase saying the code was invalid. I had to contact the company in order for them to temporarily reactivate the code. Tip: Make sure that Marketing is communicating with Operations. Most customers don’t have the patience to pick up the phone. Online chat is an optional tool to handle these types of requests, but make sure they are trained appropriately.

Web site Usability: Room for Improvement

• Product information was incomplete on the site. They did not have photos showing the complete product I wanted to order. I had to contact them and ask them to add an additional picture to the website. Tip: Always ensure you have photos of every item you are selling on your website. Consumers don’t have the luxury of tangibility online so providing as much information about the product is imperative. Angles shots, videos, and customer reviews are all optimal content assets when selling a product online.
• Part of the fun of ordering online is the anticipation of the package being delivered. Tip: Tie your email marketing in with shipping/operations to create a lifecycle campaign that keeps the customer excited to receive their shipment and notifies them of tracking and delivery.
• Further disappointment came when my package arrived and I discovered I was sent the wrong piece of clothing. I sent it back to the company and received the correct order less than one week later. Tip: Always double-check that you are sending the specific product that the customer ordered. Include easy instructions on how to return the item. Tip: Don’t overlook the details of providing a simple thank you on receipts and shipping invoices. A coupon for their next purchase is also a great way to encourage repeat visits.

While I do love what I ordered, my over-all experience with the eCommerce site left me less-than impressed and I will not be making purchases from them in the future. I hope this first-hand customer experience has given useful insight to new eCommerce businesses looking to engage in email marketing and provide users with a great customer experience. Paying attention to all the details and making sure all departments are working together will ensure you a loyal customer base and an increase in your bottom line.

While reading my dailies, I came across a fabulous article by Cameron Chapman on Smashing Magazine. Its focus was “Best Practices for Non-profit Website Design.”

And while I have no arguments about how helpful and resourceful this article is with regard to Non-profit Website Design, I do believe these best practices can be repurposed for nearly any organization looking to build a new Web site or update their current one.

A listing of Best Practices for Non-Profit Web sites are as follows:

1. Make your site donor-friendly
2. Make Your Site Media-Friendly
3. Make Your Site Volunteer-Friendly
4. Make Sure Your Organization’s Purpose is Immediately Apparent
5. Make Sure Your Content Takes Center Stage
6. Make Sure Your Website is Consistent with Your Other Promotional Materials
7. Know Your Site’s Purpose Up Front
8. Include a News Section or Blog

Find a breakdown for organizations that are not non-profit, on how to utilize these same Website best practices for your own company below.

Read the original and full article here.

If YOU ARE FOR-PROFIT organization, here are some Web site Key Takeaways and Thoughts from this article that can be utilized for your company:

• Make your site donor-friendly

Whether you are collecting donations, selling a product or providing information your site needs to be easy to navigate and checkout. The checkout process can be collecting donations, moving consumers through an actual purchase process, or requiring them to sign up for a webinar, or fill out information to download a whitepaper – you need to make it easy and requiring too many steps and requesting unnecessary information can mean losing that potential customer.

• Make Sure Your Organization’s Purpose is Immediately Apparent and Know Your Site’s Purpose Upfront

If visitors cannot figure out the purpose of your company or what you offer they cannot be turned into prospective customers. A cute logo and clever tagline won’t cut it. Make sure to include clear precise copy on all pages that informs visitors of what you offer, how to get more information and how it all works.

• Make Sure Your Content Takes Center Stage

Content does not equal copy. Content refers to copy, videos, blogs, Flash elements, images, and other types of media. Consider the types of audiences coming to your site and the best forms of content to include on your site that appeal to many types of personas. From researcher to purchaser, focus on the main types of personas interested in your product or service offering and appeal to their purchase process. What key pieces of information need to be present to get them to the desired action (e.g. requesting more information, signing up for a trial or demo, checking out). Different pieces of content appeal to different users and finding the right mix of content while balancing design and creating clear goal/conversion paths is no small challenge. Measure and test everything.

• Make Sure Your Website is Consistent with Your Other Promotional Materials

Take a hard and fast look at all on and offline materials. Cost efficiencies can be saved across the board by picking standard sizes, having image libraries, and all departments working from the same pool of resources. This ensures consistency across the board and that is the number one rule – consistency makes for success. Your brand identity will also be salvaged. In addition, make sure someone is assigned to managing your Web site and that they are made aware of all marketing initiatives both on and offline. There is nothing worse than having a press release sent out over the Internet and then visiting the actual company Web site for more information and there is little to no information on the product or service that was promoted, let alone the press releases hasn’t even been posted to the company site. You miss out on great search engine visibility opportunities by missing on such a simple web update.

• Include a News Section or Blog

Don’t miss out on opportunities to become an authority in your area. You don’t always have to be promoting your products or services, think inside your box but with regard to end-user. What problems do they encounter that your product or service might help solve? Blogs and News Sections are opportunities to take advantage of ongoing search engine visibility as well as deliver valuable and relevant information to your audiences. They keep your site current and fresh and provide valuable insight into your companies work ethic and level of service.

photo credit: cogdogblog