Monday, November 28, 2011

Are Social Buying Coupons Worth It for Small Businesses?

Social buying coupons have got consumers in a shopping frenzy this Christmas. Companies offer amazing discounts through social buying sites for their goods or services if a certain number of coupons or deals are purchased. At first glance social buying coupons seem like an effective way for local customers to get a great discount on gift certificates and products, and get their Christmas shopping done on budget this year. It also seems like a great way for small businesses to increase their sales. But do social buying coupons do what is intended? Sure the steep discounts attract a large numbers of new patrons initially, but do they create repeat and loyal customers? A recent article on the CBC website suggests they do not.

I’ve purchased several e-coupons through social buying sites such as Groupon, Living Social and Deal Find.  The more deals I purchased the less impressed I became.  My top complaint is the poor customer service I received, others include:
  • Long wait times for service (e.g. I waited 2 months to get an appointment at the salon because stylists didn’t want to work on “coupon customers”)
  • Could not communicate with service men that did not speak English (e.g. the receipt was even in a different language!)
  • Added fees when service men arrived (e.g. one totaled over $100 in extra fees for them to complete the job)
Of the seven deals I can recall buying, I would do repeat business with one of the companies.  Considering this, is offering gift certificates through social buying sites really worth it for small businesses?  Some questions to ask are:
  • Can I meet the demands if I sell a significant number of coupons?
  • Can I provide the service and quality I’m known for if I sell a significant number of coupons at a very low price?
  • How will I handle complaints?  
  • Can I afford to offer my services at a significantly low price or for free?
  • Will it attract the type of loyal customers I’m looking for?  
  • What specifically can I do to turn them into loyal full-paying customers?
  • How will I ensure that coupon customers are treated like real customers by all staff?
I’d love to hear your stories or questions about using coupons for small businesses.  Would you recommend selling them or buying them?

Miranda Vande Kuyt is a self-employed project and communications consultant.  She is the facilitator of the "Look Before You Leap: Self-Employment Survival Strategies" online course through