Groupon: Yes or No?
Is Groupon a smart way to advertise your dry cleaning pick-up and delivery business?
I have the benefit of my membership trying Groupon and giving me their feedback. Some were good, most were not. But, I will outline the perfect situation to give Groupon a try under YOUR strict guidelines.
First of all, if you’re not a big operator and you do not cover all of your city and surrounding area, Groupon is not for you (maybe). What if you get a customer from Groupon way out in the middle of nowhere? You can’t make any money servicing them. Your route should be concentrated so that you can rake in $25-$35,000 per month per van. If you’re spread out all over the place, this will never happen. I’ve run into dry cleaners that spend 40 hours on a route that only brings in $10,000 per month. You can’t make any money doing that.
If you’re not covering your whole city, you can try to get Groupon to limit your customers to the part of your town that you’re covering. This will not be easy, but lately they’ve given in because these “deal of the day” companies are everywhere. And I’d check out Living Social and some of the other “deal of the day” companies in your area. It might be better to start with a smaller company to limit your liability and you’ll learn some things about your market and how to handle your prospects (more on this later).
So let’s say that you get Groupon to limit your offer to the areas you service, what do you do next?
The next thing you want to be concerned about are the “mooches.” The mooches will ONLY do business with you once. Groupon loves the mooches because they make a ton of money on them. You don’t. You lose money on the mooches. So how do you limit the mooches? Here’s what my successful members do: They offer $99 worth of dry cleaning for $49. Most mooches won’t have $99 worth of dirty clothes to dry clean. You’ll get a few, but you won’t get many.
If you want to try a less dollar amount offer (which I don’t recommend), make sure that you limit it to one transaction. You don’t want to run out to some moochs’ house 3 or 4 times for 50 bucks, do you?
By having a $99 offer, you’ll only get the serious people who do lots of dry cleaning. And that’s exactly who you want. Groupon wouldn’t take this kind of a deal a year or so ago, but will now. You’ve got to be firm in what you’d like to offer. And if Groupon doesn’t take it, some other “deal of the day” company will.
When Groupon announces your offer, you’ll get hammered with phone calls. You don’t want to be spending all day on the phone telling everyone the same thing about your delivery service. So what do you do? You set up a separate phone number, record a sales message and give that phone number to Groupon to put in your ad. You’ll have a few that look you up online and call your regular phone number, but it won’t be many.
You can go to Kall8.com and pick up a phone number for $2/month plus 7 cents a minute. And then you’ll record a sales message for all of those Groupon prospects calling like crazy for the few days after the offer. This recorded message will give every prospect the same consistent sales message over and over again. This is much better than you or one of your people giving a different message each time someone calls. You want to go over your offer and let them know that it’s for pick-up and delivery ONLY and that you must spend at least $30 per month for this service to work for you. You want this info in your Groupon offer too.
Forty% of your new customers will take you up on your offer within the first month. And then over the next three months another 40% will redeem their deal. And then 20% or so won’t ever redeem. That’s found money. It might be less depending on your offer.
So this is the skinny on Groupon and the other “deal of the day” companies out there. I hope this helped.
If you’d like to listen to a coaching call that I had with my members on this subject, go to: NoDoorKnocking.com/groupon/
To find out more quirky ideas on how to raise your revenue, go to my blog: DryCleaningMarketing.com