Discussion Thread: Advertising trough Groupon / Living Social

Agnieszka

Well, I'm not sure if you were aware, but it looks like more and more photographer advertise trough Groupon / Living Social.

What are your thoughts?

(here's an article I found: http://www.ppmag.com/current_<wbr>issue/pdfs/0311/groupon311.pdf)

What do YOU think?

Kinkajou

I was recently contacted by savemore.com about being part of their launch in the Jacksonville area. I spent a while hemming and hawing and doing some research before I thought about giving it a try. The problem, however, was that by the time I calculated all of my basic costs for the option I was going to offer (2-hour couples/engagement shoot with 1 11x14 cotton paper print from WHCC), I wasn't earning anything - I was actually losing money on the basic expenses of mileage and prints, not to mention my time and burdened costs - but the other company would actually earn something.

Yes, I could potentially land some wedding clients and yes, I could definitely use the exposure, but am I in a position right now where I want to lose money and have another company profit off of that? I feel like I'd be better off offering 10 free sessions rather than gaining 20 sessions that I'm losing money on and another company is getting a financial benefit from. That's not to say I don't think I'd ever do it, but if you're offering 50% off of your normal prices AND the other company gets 50% of the remainder... you have to have either really jacked up your prices or be ok with losing out financially to gain new clients and exposure. I'd have to think of it as paying for online advertising to justify it, I think.

Not to mention, when you see a photographer or any professional offering 75% off of their services, what does that make you think of them? It makes me think that there is something wrong... 75% off is a 'going out of business' or 'item discontinued - old stock must go!' price, not an 'I am a professional with training, experience and knowhow' price. Yeah, I'll definitely go after a 60% off last summer's shoes sale, but I'm NOT hiring a 60% off car mechanic.

But again, I could definitely use the exposure and client base. I guess it depends on how desperate you are

darklord

I heard half the groupons are not redeemed so you are actually making more than 25% of your regular price. However, one big downside of using groupon is the number of goupons that are normally so which is in the hundreds or even thousands.

How can a single photog fulfill that many bookings within a reasonable amount of time is anybody's guess. But I do see photog groupons regularly in my city.

Ann McRae

I don't think it is a good idea for a service based business. I don't have personal experience as a vendor, but I do have some experience as a customer and have talked to the respective vendors about whether it was worth it for them.

First, a local specialty wine and beer store: $20 for 2 bottles of wine or 4 bottles of specialty beer.
The vendor sold so many coupons that they basically wiped out their entire inventory (at all price levels). So, when they signed up they thought they would make their profit due to volume, being able to keep the cost of the product within the margin of the coupon. In the end the demand was far too high and I believe they lost money.

Next, my hair salon. They had a half price deal on pedicures. They knew that their offer had no profit, but used it to try to attract new clientele. They sold 1600 pedicures. What that has meant for them is they have to turn away their regular customers that would be paying full price to try to satisfy the demand. Not only are they losing money on the coupon, they are losing regular customers that have to find a new salon.

I know a fellow that just did a photography coupon. The demand far out sold his expectation, and he cannot possibly look after all of these customers, which means he must refund. Guess who loses when that happens? Not the coupon company, for sure!

tenoverthenose

Crazy real world examples Ann! My business just isn't built on (a) offering crazy discounts to lure clients or (b) massive volume, so groupon in out for me. The bigger problem that I have (as a business owner) with advertising on Groupon is the the Groupon mentality. You are luring clients to you with massive discounts, clients that would otherwise not be interested in you. They are coming to you BECAUSE of the discounts, not because of who you are. They will go to the next business just because of a discount wether they previously considered the product or not. Clients like this are chasing discounts and will offer no loyalty, which is exactly what most businesses need.

Kinkajou

Ann McRae wrote: »

I don't think it is a good idea for a service based business. I don't have personal experience as a vendor, but I do have some experience as a customer and have talked to the respective vendors about whether it was worth it for them.

First, a local specialty wine and beer store: $20 for 2 bottles of wine or 4 bottles of specialty beer.
The vendor sold so many coupons that they basically wiped out their entire inventory (at all price levels). So, when they signed up they thought they would make their profit due to volume, being able to keep the cost of the product within the margin of the coupon. In the end the demand was far too high and I believe they lost money.

Next, my hair salon. They had a half price deal on pedicures. They knew that their offer had no profit, but used it to try to attract new clientele. They sold 1600 pedicures. What that has meant for them is they have to turn away their regular customers that would be paying full price to try to satisfy the demand. Not only are they losing money on the coupon, they are losing regular customers that have to find a new salon.

I know a fellow that just did a photography coupon. The demand far out sold his expectation, and he cannot possibly look after all of these customers, which means he must refund. Guess who loses when that happens? Not the coupon company, for sure!

Amen. And you know that Groupon or whoever the company was still made their own profit while all of those businesses were losing money.

m2photographer

The more research you do on it the less likely you'll want to do it. I do think its great for workshops though! It's about not letting groupon or whoever talk the pricing down to where you lose money!