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Thanks, but no thanks Groupon....
#1
Was on the cusp of running a deal with Groupon in just a few days, however I decided against it.

Why?

Well, the initial deal was a two package promotion for $79.00 or $99.00 - can't recall the exact square footage, but it's somewhere in my email correspondence.

The deal was initially reviewed by my rep and she loved it. It was then kicked upstairs to the decision maker who rejected it. This was based on their wanting a lower price point.

I went back to the drawing board and tried to come up with some new packages. I kicked around some ideas, but I really wasn't motivated to do anything less than $79.00.

In the meantime I checked my email and opened my daily Groupon. Guess what I saw? A 'Deal of the Day' from another carpet cleaner. This was maybe two weeks after my initial deal was rejected.

The thing that irritated me most though is that his price points were the ones I had originally wanted!

I called my rep and she told me that the square footage was not the same, he had run a deal before, etc. Still, this was nothing that I wasn't willing to try and work out after my initial deal was rejected. Didn't seem right.

They then contacted me a couple of weeks after and asked if I wanted to run a deal. However this time they wanted me to set the initial price point at $49.00. At first I was reluctantly ok with it. However, the more I thought about it, the more it bothered me.

Why should I be forced to run a promo for less money? Especially after they run a deal with a company at the price points I wanted.

Long story short, I called today and told them that maybe we can do something next time.

Oh well.

I'm just trying to hack my way to glory.

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#2
Yep

They did the same thing to me, I told them to kiss my arse. Worked out well with Living Social however, Ill do another one with them. As soon as more and more consumers realize it aint quite a deal and the more of the vendors realize they are just out to sell in mass and not care about profitability the more and more of these sites will FAIL big time, just a matter of time.
(12-13-2011, 07:49 PM)thecleaningdude Wrote: Was on the cusp of running a deal with Groupon in just a few days, however I decided against it.

Why?

Well, the initial deal was a two package promotion for $79.00 or $99.00 - can't recall the exact square footage, but it's somewhere in my email correspondence.

The deal was initially reviewed by my rep and she loved it. It was then kicked upstairs to the decision maker who rejected it. This was based on their wanting a lower price point.

I went back to the drawing board and tried to come up with some new packages. I kicked around some ideas, but I really wasn't motivated to do anything less than $79.00.

In the meantime I checked my email and opened my daily Groupon. Guess what I saw? A 'Deal of the Day' from another carpet cleaner. This was maybe two weeks after my initial deal was rejected.

The thing that irritated me most though is that his price points were the ones I had originally wanted!

I called my rep and she told me that the square footage was not the same, he had run a deal before, etc. Still, this was nothing that I wasn't willing to try and work out after my initial deal was rejected. Didn't seem right.

They then contacted me a couple of weeks after and asked if I wanted to run a deal. However this time they wanted me to set the initial price point at $49.00. At first I was reluctantly ok with it. However, the more I thought about it, the more it bothered me.

Why should I be forced to run a promo for less money? Especially after they run a deal with a company at the price points I wanted.

Long story short, I called today and told them that maybe we can do something next time.

Oh well.

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#3
If I've learned anything in my years and years of dealing with ad companies is the rep is always full of shoot and you have to make the deal YOU want and not what THEY want......If not...Then walk.


With these deal companies I got in early and was able to set a standard for my deals...Because no other carpet cleaners had done them.

So now I can do better deals...But still not great.

I don't go in expecting only to make $27.50 per job even though that's my initial cut.

Over all....I will make much more on average...and you have to look at it like that.

There was a time I was going to go super low just to show I could make money....But I decided I didn't want to do all the work. LOL

What I'm saying is....You can make money off just about any priced deal....If you work it right AND be ready to offer all your services to the homeowner.

But don't go doing it because I say all this....It's just something I think about.
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#4
You're right, Brian.

I just don't like that another guy did almost the exact same deal that I wanted. Why is it that I need to lower my price point?

Makes no sense.

Frankly, my biggest fear is driving all over town. The valley in Vegas is huge and there are no distinct borders so it's hard to put a limitation on service areas. I also don't like stairs. Moving equipment up and down stairs adds a lot of time to a job. If you're working alone this can really go against you. These are just a couple of reasons why I wanted the higher price point.

I called them today and offered a concession on the lower end package in order to make this work for everyone. However, I suspect they already filled the spot.

We'll see.

(12-14-2011, 10:53 PM)Brian R Wrote: If I've learned anything in my years and years of dealing with ad companies is the rep is always full of shoot and you have to make the deal YOU want and not what THEY want......If not...Then walk.


With these deal companies I got in early and was able to set a standard for my deals...Because no other carpet cleaners had done them.

So now I can do better deals...But still not great.

I don't go in expecting only to make $27.50 per job even though that's my initial cut.

Over all....I will make much more on average...and you have to look at it like that.

There was a time I was going to go super low just to show I could make money....But I decided I didn't want to do all the work. LOL

What I'm saying is....You can make money off just about any priced deal....If you work it right AND be ready to offer all your services to the homeowner.

But don't go doing it because I say all this....It's just something I think about.

I'm just trying to hack my way to glory.

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#5
I would never do 2 packages by the way....After some thought.

You're limiting your upsell at that point.


Pick one deal and leave it at that.


I like the 3 rooms deals.....I'm in the middle of a 3 room $65 and it's working well.

I've done $55 to $89 and the difference is substantial.

$55 brings more work and at the end...more money
$89 brings in less work...But each job is more at the end of the job...Just not at the end of the campaign.

Although...these things change and people get experience with the deal of the day companies.....I could probably do a $89 deal and do much better.....If they would let me.

Stick to your guns bro....don't do anything you don't feel right about....ONLY you know what your business is comfortable with....Not the DA Rep.

You're a smart dude....You'll be fine.


Did you get my referral of my buddy in Las Vegas for carpet cleaning??
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#6
No I have not, but I'm sure he will come through.

Thanks by the way. I should have PM'd you back to properly thank you. Sorry about that.

(12-16-2011, 10:53 AM)Brian R Wrote: I would never do 2 packages by the way....After some thought.

You're limiting your upsell at that point.


Pick one deal and leave it at that.


I like the 3 rooms deals.....I'm in the middle of a 3 room $65 and it's working well.

I've done $55 to $89 and the difference is substantial.

$55 brings more work and at the end...more money
$89 brings in less work...But each job is more at the end of the job...Just not at the end of the campaign.

Although...these things change and people get experience with the deal of the day companies.....I could probably do a $89 deal and do much better.....If they would let me.

Stick to your guns bro....don't do anything you don't feel right about....ONLY you know what your business is comfortable with....Not the DA Rep.

You're a smart dude....You'll be fine.


Did you get my referral of my buddy in Las Vegas for carpet cleaning??

I'm just trying to hack my way to glory.

Get Encapsulation Pads & More!

1 X's Orbot, Windsor & Sanitare Vacs, Multisprayer, Oreck Orbitor, Stepson, BrushEncap (TM4) CRB  
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#7
I still don't understand this Groupon stuff. It seems a$$backwards to me.

We go out of our way to avoid price shoppers. We try to look expensive and more professional to discourage them from calling. It's nothing personal, it's simply, among other things, loyalty isn't in their vocabulary, they'll only call when they can't find someone cheaper, they're the least likely to be ready when you arrive, they're the most likely to be a no-show, and they're the first to complain.

Upselling takes the joy out of my day and it ticks off a lot of people. There are people who value clean stuff and will pay a professional a living wage, just like they do their doctors, their mechanics, their plumbers, and their HVAC guys, to keep it that way....and, at least around here, they're all over the place if you look for them.

We won't advertise in coupon packs like ValPak, not just because they're geared towards price-shoppers, but also because you're competing on price against several other cleaners. Who wants to duke it out over how many rooms you can get for $29? It seems like the definition of insanity when the person, whose salary you're paying, can decide when and IF they'll run your ad based on whether or not they can go behind your back and coerce a competitor into offering an even more ridiculous deal.

Sometimes you've got to do what you've got to do. I get that. What makes no sense is when you've got to do what you've got to do and you've got to do it NOW....and there's no way to predict when NOW is going to happen, if at all. It might be today, or tomorrow, or next month, or "we'll let you know."

I can see a benefit to Groupon type stuff if you're selling a commodity like sandwiches or cupcakes or coffee, everyday stuff people buy on a regular basis. It's an easy way to get your name around. I can't see it for bigger ticket items like tires, appliances, and services like, well, carpet cleaning, purchased once or twice a year or maybe every two, three or more years.

I'm a little dense sometimes so maybe someone can help me see what I'm missing.
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#8
It's different with Groupon and Living Social than with Valpak.

I'll post more later...I need to leave but most of what you said is wrong Wayne...But I'll need to read it again better later. I'm in a hurry.

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#9
Well, from the tiny bit I understand, Brian, the idea is you begin with at least a 50% discount. That put's me near poverty income. Then, you agree to give the advertiser 40 to 60% of the take...if they think I've sweetened the pot enough to warrant running my deal. Now, I'm trying to vacuum up loose change to pad the invoice. And, if all goes right I'll add 80 or 100 of these sweet "deals" to my customer base?

I'm sure that's a massive oversimplification but that seems to be the gist of it. Where am I going wrong?

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#10
If you do work for your customer and they do more...would you discount the extra work a little..."the more they do, the less each thing costs"?

Maybe, maybe not....This is just a reverse of that.


The key is to do a deal where they are sure to have more done....not padding the invoice...Just finishing the job.


Most people have more than 3 rooms...So I do 3 room deals.

It's hard to explain in one post...I've tried in the past.

I do get repeats and referrals from these deals....I end up doing whole houses, stairs, pet treatments, upholstery etc ALL at the regular price.

Suddenly those 3 rooms would have been a "wash" anyway.


And most people who buy those deals are home owners who give a crap...Nice people, nice houses....Mid level customers.

There are ghetto house and Million dollar houses in them mix just like anything else.

It's been a great deal for me.


But it surely is NOT for everyone.

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#11
I think the issue is.....Most who have never tried it automatically think "PRICE SHOPPERS"

Not the case at all...Very seldom there are a few in the mix.


I look at it this way. If they are willing to spend $65 on the internet for the deal...They surely have more money the will spend willingly.

Because it's an impulse buy "deal of the DAY".

Ghetto and price shoppers are more of an "Event" customer...Moving out, heath dept etc.
They won't just spend like that most of the time.


These are the head of the shopping household females making the purchase...and as long as the get a "deal" they are ready to spend more.



This is what most miss who have never done a deal.

Granted..Some guys will thuroughly screw themselves running a bad deal...But most of those guys are pitty party people anyway and nothing ever goes their way.

I refuse to fail....even when I fail.

But that's just me.
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#12
Even if you take the price-shoppers out of it, it still seems a$$backwards.

I'd guess for most cleaners three or four area jobs are probably their bread and butter. It is for us. Sure, when you get to 700 or 800 ft2 there is some economy of scale and we can work a lot more with the price and still hit our hourly $$ goal. But, to give a ridiculous discount upfront and hope they add on to the tail end?

Suppose you charge .35/ft2 and your 3 room deal comes is 500 ft2. It's a $175 job. Less a 50% deal, $87.50. Split that with the advertiser and you're left with $43.75, or .09/ft2.

Say you're a great salesman and you double the job to 1000 ft2, it still works out to a 38% discount.....if the advertiser decides your deal is cheap enough to run.

$219 for 1000 ft2? Do I really want to go back in time 16 years?
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#13
(12-20-2011, 08:40 AM)Wayne Miller Wrote: Even if you take the price-shoppers out of it, it still seems a$$backwards.

....

$219 for 1000 ft2? Do I really want to go back in time 16 years?

I'd say new companies or someone hurting for immediate cash are the only folks that really like the groupon deals. I can see using it to keep a good tech busy or train a new tech while making a dollar or two (literally) during the slow times, but I sure can't see doing it long term.
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#14
Let's take the job out of the equation and look at the side benefits

A few thousand hits to your website

30 or so people calling direct

Tile (if you do it)

The exposure of people seeing your name from the emails....Thousands upon thousands.

Referrals...The repeats that I've been doing...Getting into neighborhoods with your truck and people see you working out of it.

There is more to that list I'm sure.

It's just an advertising expense Wayne...What does it cost to send out the pretty mailers?
What about ads in the phonebook or payper click??



A$$ backwards is right....You don't pay for the ad unless you get the customer....Where else does that happen?

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#15
Excellent points, Brian. Great exposure, thousands of emails. The opportunity to upsell on every job. Lots of potential repeat and referral business. None of it free regardless of how you get it.

Cost effective? I guess that depends.

Say your average job is about $300 and much of that comes from 3 areas and a set of steps. Say you got out of the stone age and charge $4 or so per step. That's not part of the 50% off deal so now you're talking about $250 you agree to discount 75%.

75% of 250 is $187. Say you sell 50 deals, are the positives worth $9300?

How many eyebrows are gonna raise when the price next time is $125 higher? Just MHO, but when people see ridiculous discounts the natural interpretation is your prices are artificially high to begin with.

For me, the numbers don't work.


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#16
(12-21-2011, 08:37 AM)Wayne Miller Wrote: How many eyebrows are gonna raise when the price next time is $125 higher? Just MHO, but when people see ridiculous discounts the natural interpretation is your prices are artificially high to begin with.

...BINGO! Good Job
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#17
It's a super discount to show your work and earn their trust.

Most people understand that.

Like a free room or demo etc.

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#18
(12-20-2011, 11:49 PM)Brian R Wrote: Let's take the job out of the equation and look at the side benefits

A few thousand hits to your website

30 or so people calling direct

Tile (if you do it)

The exposure of people seeing your name from the emails....Thousands upon thousands.

Referrals...The repeats that I've been doing...Getting into neighborhoods with your truck and people see you working out of it.

There is more to that list I'm sure.

It's just an advertising expense Wayne...What does it cost to send out the pretty mailers?
What about ads in the phonebook or payper click??



A$$ backwards is right....You don't pay for the ad unless you get the customer....Where else does that happen?

I'm still making money off of referrals that I received from my 2010 deal. I'll admit that I didn't really make any money off of my original deal, but the mass emails and website hits helped my name get out there. I didn't do a 'groupon' deal, because they want dirt cheap deal prices. If you want to run a deal, I'd try some of the smaller group buying sites instead of Groupon. A ton of people these days don't even go to separate group buying sites, they just subscribe to the buying site aggregate websites. They compile deals from a bunch of deal sites and post them on theirs. By working with a smaller deal company, you can probably get away with charging more for your deal.

This is what I did once... I ran deal a while ago for a Whole House Cleaning that costs the buyer $149 bucks (I think) regular price was $300 (50% savings deal). It had a ton of room size restrictions so I wouldn't get burned if someone purchased it. I really DIDN'T want it to sell well, but what I was doing was a slick way of getting my company name out there to a ton of folks! Undoubtedly, I received calls from potential clients that saw my deal, but wanted less rooms cleaned or other services completed. I just worked out a less expensive deal over the phone with them and never had to pay a percentage to a deal site. Basically, I made more money by cleaning less when I worked out a deal directly with a customer. Win! Hmmm... I think I just may do that again next month or so. padding
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