Posts Tagged ‘coupon’

Will Groupon Increase Business Cash Flow?

May 4, 2011

by Doug Smith, President, The Woodhaven Group, LLC

I have to admit that I have not used Groupon or the other coupon sites from a seller standpoint at this time.

But I am intrigued by the potential these sites have to offer.

I know there are businesses that love what coupon sites do to sales and return time and again to using Groupon and sites similar to it.

Having said that, here are a few questions an owner or CEO should ask themselves before taking the online coupon plunge:

  • Who is your customer?  What do they really want and expect from your company?  While everyone likes a deal, do they expect you to be selling your products or services at 50% off?  Are they more price driven or value driven?  Any new prospect you attract should be similar to your existing loyal customer.
  • What is the impact on your brand?  What message do you want prospects and customers to hear from you?  Is the coupon call-to-action aligned with the value proposition your company has invested time and money in developing?
  • What is the cost to acquire a new customer?  You should know this.  What % of the coupon users will return to buy the next time at full price?  Run scenarios to see if you like the cost of customer acquisition.
  • What is the profit per sale and are you comfortable with that?  Run the numbers on gross margin and overall cost of marketing.   If the coupon site takes 50% upfront, what will you be left with after the sale?  
  • What is the impact on your existing customer? Will they expect the same offer even if they do not act on the coupon?  If you offer them the same discount as the coupon, would they have purchased anyway but at full price?  Do their expectations of your company change going forward?

Those are just a few of many questions to consider prior to using the online coupon channel of marketing.

Lastly, I would talk to businesses similar to yours who have used Groupon and similar coupon sites.  Ask them what worked and what they would do differently.  The beauty of Groupon and others like it is that you can learn from the experiences of others.

What do you want to accomplish from using online coupons?

Profitably increasing your business cash flow should be at the top of your list.

10 Creative Ideas To Increase Sales Now!

July 13, 2010

by Doug Smith, President, The Woodhaven Group

As a business owner or CEO you must create and maintain positive cash flow in your business.  It is your #1 priority.

Let’s be clear where that cash flow is not going to come from.  The amount of loans to small businesses fell in the 1rst quarter of 2010 compared to 2 years earlier.  Banks and other private lenders are being more choosy about who is getting any type of small business loan.  Regardless of good cash flow projections and collateral, some businesses still are not receiving the lines of credit needed to operate their businesses.

As an owner, I would not automatically assume funds will be available from my local lender.      

There is one solution that will work.  The small business owner must find ways to increase sales.  The smart owner has already cut expenses, gotten extended terms from suppliers and probably tapped into personal investments.  More sales will bring more of the business cash flow your company needs to survive and grow.

Your company will need to do creative and unique tactics to spring loose the purse strings of the consumer or business who is your customer.

Start doing these 10 things today to increase sales:

  1. Learn more about the needs and wants of your customer.  Find better solutions to their problems and market to that.  In one word, “listen” to the individual customer more than before.  You may find that there is a whole category of products or services your company should have been selling to him that will increase your sales.
  2. Monitor and use social media.  There are many ways to use social media to generate sales.  The overriding method is to use social media to build relationships with customers and noncustomers.  Monitor for  complaints about competitors and offer a solution.  Monitor for complaints about your own company and be there to take ownership of the problem.  Incorporate surveys, contests, and links to websites, including your own.  All of this can position your company as a credible source of information. The end result will be an opportunity to create a new customer.
  3. Use email marketing to strengthen customer relationships.  This is not an opportunity to just email blast special offers constantly.  Instead, use emails to target a message about the benefits of your product, new information on your industry, an interview with a local business leader or an update on coming events involving your company.  Email marketing is an inexpensive way to stay in touch with your customer.  A call to action can still be included to trigger additional purchases.
  4. Get lapsed customers reinstated.  If you sell to other businesses then call on the company.  If you sell to consumers then send a personalized letter to each customer with a special coupon.  Don’t let them forget about you.
  5. Offer extended terms.  Help your customer finance the purchase.  Chances are your customer needs your product.  Here is a way to show that you are there to help them.  Instead of normal 30 day terms, extend out to 60 or 90 days.  Of course, make sure this offer is to creditworthy customers.
  6. Offer an unusual promotion.  Check the gross margin of your most popular products and offer something different to pry loose the spending of your prospect.  It may be a discount, a free service with purchase or a bundling of products.
  7. Run a 3 day limited promotion.  Make it unadvertised and exclusive to your customer database.  Communicate this with an email and followup contact by phone or in person.
  8. Offer a special after hours private shopping event.  If you are a retailer, tie in with a local not for profit and include their database in the invitation list.  Have a portion of the proceeds go to the charity.  Include wine, music, and giveaways at the event.  This could easily be held on a Saturday or Sunday evening.
  9. Create a white paper.  Your prospects and customers are probably having cash flow issues also.  Offer tips on how to save cash.  This will work for both businesses and consumers.  They will appreciate the free advice and use their new-found cash to spend on your products or services.
  10. Ask for and get testimonials.  Then send them out with a promotion to both prospects and customers.  There is no method of advertising more effective than a third-party advocate.  By including existing customers it will reinforce that they made the right decision by buying from your company. 

Use one or more of these ideas to pump up sales and increase cash flow.  Keep track of results and show your banker the action plan, goals, and the resulting increase in sales. 

You may see your banker wanting to make a loan to this well run growing business of yours.