A Groupon point of view from the outside.

[kendallsdad]

I do not own a carpet cleaning business but I am a Groupon member. I have no interest in promoting Groupon but I do have an interest in carpet cleaners gaining any advantage in the rapidly changing world of marketing. At a recent social gathering I had a discussion with about 15 people who were all Groupon members and gathered their thoughts and opinions.

Here is my opinion on how a carpet cleaning Groupon would work best (for both parties):
1. $100 worth of cleaning for $50
2. Make it available to existing customers
3. Make sure you have a decent website that explains your pricing and your services!!!

Now I'll explain:
1. By setting a $100 value on your Groupon you're only allowing Groupon to "share" your income on the first $100. Anything over $100 is
yours. Anyone who is willing to front $50 for a coupon is most likely willing to spend more than $100 on carpet cleaning. Which brings
me to my biggest gripe "GROUPON IS NOTHING LIKE VAL-PACK!!!". Val-pack arrives at your doorstep with no obligation from the
prospective customer. Groupon requires you put up substantial money to retain your services. How well do you think Val-pack would
work if they required the recipient to pay for half the coupon values contained in the mailer? For the record I'm not knocking Val-pack.
2. Just because you cleaned their carpet once doesn't make them your customer. Carpet cleaning (from a customers point of view) is
like going to the dentist. They know it needs to be done but they put it off until there is a problem. You must retain them by making
it easier. Which rolls right into #3
3. Having a good website is essential to Groupon working for you. People who use Groupon are generally computer savvy. It is internet
based so you need to be where your customers are. Creating a webpage is easier than you think. You managed to get to this
website, you can manage a webpage! If you need help look around you. There is always 16-18 year old nephew or cousin texting in
the corner at your next family function. Offer to buy his next mobile phone if he makes you a website. It'll be the best $150 you can
spend.

Groupon is not the be-all and end-all of internet marketing. There are 1000's of different e-commerce websites out there and coming out. The idea is to find the one that works best for you. Or you can ignore it completely. If your customer base is a retirement community and no one owns a computer Groupon probably won't work for you. But remember, they're in a retirement community for a reason and before you know it the "computer savvy's" will be there too!

This post is based on my opinion and does represent any other entity.

 

[Walt]

I noticed that you compared getting your carpets cleaned to visiting the dentist. Yes going to the dentist can be a drag when you think you are going in to get your teeth cleaned and end up getting a root canal and crown. You thought you were going to spend 100 bucks on the cleaning but you ended up spending $1400.

Please understand from our point of view that in very few circumstances can a cleaner make a living on 50 bucks a house. I know it seems like a fair wage but I can assure you that they are in negative financial territory. Further, the truth is nobody can do a decent job in one hour. So, what you have is a situation where the cleaner is motivated to work as fast as he can and upsell some thing (anything!) so he can make any money at all. Does that sound like a recipe for a good experience? In a hurry and desperate?

Low ball coupons are nothing new in our industry. The only thing that has changed is the delivery of the discount. And every year, we as professionals, see companies that use these tactics alienate their customer base and destroy their business.

 

[kendallsdad]

Walt,

How much would you pay to acquire a new customer? How much have you paid to acquire a new customer in the past? Does $75 seem reasonable? The Groupon idea I suggested is $100 for $50. Think of it as a $100 gift card that you are selling for $25, Groupon gets the other $25. I never suggested that you agree to clean a whole house for a set price. Now, Mrs Groupon Customer calls and wants to redeem her Groupon. What are the chances she is going to need more than $100 worth of cleaning? The customer already spent the $50 to get the Groupon now she has 3 bedrooms, a living room,a family room, a sofa, a chair, a stairway, and a hallway she needs cleaned. You tell her its going to cost her $300 to clean (how far off am I?) and she does one of two things: she says ok or she gives up the chance of using her Groupon and you made the easiest $25 ever.

My post wasn't intended to try and persuade people to use Groupon. It was intended for people who are interested in using it and getting a viewpoint from the outside.

Here are a few more tidbits about Groupon:
http://www.grouponworks.com/why-groupon/demographics


When Groupon users want to use your service again they can look you up right from their account.

I wouldn't call Groupon a "low ball coupon". The customer is putting up $50 of her own money before she even gets a quote from you. Which is why it's important to have a website that discloses your pricing structure. What type of person is willing to front $50 on a coupon? $50 is real money to have to be able to just spend it on a coupon. Someone who is going to tie up $50 is probably someone who is more than willing to pay top dollar for quality carpet cleaning service totaling more than $100.

You service Portland, OR, 35% fall into Groupon age demographics, average household income $50,000+. Where are you going to spend your money to attract new customers? And, ultimately, how much is it going to cost you to do it?

It's not just Groupon you need to start at least looking at. Its the 1000's of alternatives that are all internet based that people are starting to use.

Walt, on a separate note, I would never promote or encourage anyone to work for less than they are worth!

This post is based on my opinion and does represent any other entity.

 

[kendallsdad]

I have been a member much longer than 2008 (under a different name) and have monitored this site through all it's ups and downs! And since I'll be attending M7F this year I thought I would chime in occasionally. Especially if it involves something I'm familiar with.

I just wanted to input my opinion on the whole "Groupon Phenomenon" as an avid user. I've used it many times and I've often revisited many of the Groupon companies I've purchased Groupons for. I've also learned not to go back to some.

My opinions are not intended for anyone who has already made their decision. Only you know your cost of acquiring a customer. If it doesn't work for you or you know a better way more power to you. I just want to help those who want to know more. That goes for any knowledge I may have that can help others.

And yes. Matt from Butler. But my opinions are my own and do not represent the company.

 

[XTREME1]

what companies have you continually used from Groupon?

I will say groupon would not accept a deal of the day for $100 Carpet cleaning for $50.00 and if it were a side deal you would sell 2

 

[Ken Snow]

I believ Groupon changed their disbursement method Matt and only sends the $25 after it has been redeemed by the customer. Nice to have you chiming in Matt!

Ken

 

[kendallsdad]

We had a dry cleaner put one on. I've used them 3-4 more times.
Various restaurants (yes I tip on the full amount)
I give most of them away because I tend to stockpile too many.
The Gap did $25 for $12. Lets just just say with 2 little girls I spent well over $25.

 

[kendallsdad]

Yes Ken. I just noticed that and was going to comment. Bummer, but I still think Groupon can work for a smaller company that is looking to branch out and find some new customers without having to jump into a large marketing campaign. Do you think $75 is too much to acquire a new customer?

 

[XTREME1]

Yes the GAP did a coupon and I bet Starbucks could as well but what about a coupon from Xtreme? I know companies would be all over that because they could over inflate the bills to make up some of the difference and I am betting after a few billions in offers to groupon that they aren't dumb enough to state there repuation on a coupon from an independent operator for a cash value rather than a service offer.

I have been known to be wrong in the past.

 

[Ken Snow]

Greg, sometimes I find it even harder to understand what you type than I do understanding you on the phone.

 

[Ken Snow]

Matt, I would say for me $75 would be somewhat high to acquire a new customer but in the groupon scenerio it isn't really costing that- it is really only costing what the expense is to service that $75 worth of value.

This cost is probably somewhere between 30-40 % of the $75, say $22.50-$30.00, or in Brian's case ziltch and he is guarenteed to make at least $10 per client, less his full circle costs.

 

[XTREME1]

I was saying Ken that he mentioned GAP doing a coupon and groupon wouldn't allow us to do one.

GAP lost $7.5 million on the groupon while they cannibalized their own target market. IE who is buying GAP products gap customers.

If I could sell a $50 coupon for $25 I would in a heart beat but it would never happen. As Matt said he gave a bunch as gifts, from being in a couple industriesa little lesss than half of those will be redeemed and with an expiration date and less than that, so who is making the money off those unredeemed gift cards? Groupon.

While you are having to handle the crush of business, don't forget for most business is work, you have to deal with the negative feedback for them not being able to redeem the coupon soon enough and they TWEET or Facebook about you company. Just ask BP , all publicity isn't good publicity. Anyone who thinks this is a good idea for a small business such as ours is a ...I am going to stop myself there

 

[Brian R]

Ken, I only make $10 if someone else cleans it....then we split 50/50 anything over the Groupon deal....which happens almost every time.

I make $50.00 if I do it myself.

I did 2 jobs today and made $100.00 more on each (so $300.00 total). One was steps and extra sqft and the other was pet urine and extra sqft.

The one that I subbed out ...I made $10 plus 50% of $110.00 ($65.00)

Not a bad deal for 3 jobs....not great...but I made money today.


The low price, priceshopper mentality is just not happening with Groupon.

We'll see what happens the rest of the week.
Have some tile jobs set up for Thurs and Fri.

Would you pay $50 for a tile job? Everyone here who does tile would.
Of course there is carpet on one of the jobs too.....no the Tile only job didn't buy a Groupon....so guess how much I paid for that one? Zero.

 

[XTREME1]

No he advertised steam cleaning
He would never bait and switch

 

[Brian R]

so you charged extra to smear piss around on a job Brian?

Yes. :roll:

Greg, you've got me on that one. I didn't tell Groupon to do that...but they did.

If you watch that video they sent out, they say they are going to write up something about your business and if it's a little off....let it go. Yes this was WAY off...not my fault. I didn't get to proof anything except for my restrictions.
Go figure.
Not saying It's not my responsibility...it is....but whattyagonnado?



In my defense, almost none of you "steamers" actually use steam either. HWE right?

Just sayin.

 

[XTREME1]

220to 240 plus

 

[Brian R]

Yeah but it's still mostly in a liquid state when it hits the carpet.

Anyway,
I think the gentleman who started this thread has a good point and a level head.

You people should listen to him. !gotcha!


Sorry for the hijack.

 

[XTREME1]

So from the wand to the floor it drops 30 degrees from where the lie detector is

 

[Ken Snow]

I understand Brian, was just pointing out that with your system you are "guaranteed" at least $10. Did not meant to imply you wouldn't make much more. I actuallly wouldn't be surprised if you grossed more today than most cleaners in America, especially ones in Northern climates.

 

[Brian R]

It's cool Ken. I just didn't want other people (they know who they are) to read the worst and and run with it.

 

[Brian R]

So from the wand to the floor it drops 30 degrees from where the lie detector is

I wouldn't say your were lying Greg...just a little misleading or maybe just a little misinformed. :mrgreen:

 

[XTREME1]

I get my temp at the wand Brian a lie detector is the device that measures the temp and it doesn't drop
That much

Ken ism doing a 6000 sq ft vct job as I type

 

[Brian R]

It can be bait and switch...that's up to the guy doing the work.

The deal that I agreed to was one that I knew I could make money even if I didn't upsell one of them.....not very much money but still.

Some of these guys are going very low either they will bait n switch or they will work their magic....or possibly lose their behinds.

If you want to do a deal (I'll humor you) do it with a company other than Groupon because they are a little "big" for the small guy with too much overhead.

Now if you can do the deal I just did or better (for you) then have at it. Just type them your list of services. lol

 

[Brian R]

For the record. THAT is the biggest problem I foresee with Groupon. The deals keep getting "better and better"..How low can you go?....Foresee? Can you "Foresee" the present? lol
It seems a bunch of guys are going too low BUT ...even if they don't make a penny on the job...I still believe that the majority of the customers WILL "purchase" something else.

Again, you just have to be sure of yourself going in and realize it's risk.

 

[Burtz]

I find the guys that do or guru that the foundation of their sucksess is the free room will poo poo groupon

 

[Walt]

Walt,

How much would you pay to acquire a new customer? How much have you paid to acquire a new customer in the past? Does $75 seem reasonable? The Groupon idea I suggested is $100 for $50. Think of it as a $100 gift card that you are selling for $25, Groupon gets the other $25. I never suggested that you agree to clean a whole house for a set price. Now, Mrs Groupon Customer calls and wants to redeem her Groupon. What are the chances she is going to need more than $100 worth of cleaning? The customer already spent the $50 to get the Groupon now she has 3 bedrooms, a living room,a family room, a sofa, a chair, a stairway, and a hallway she needs cleaned. You tell her its going to cost her $300 to clean (how far off am I?) and she does one of two things: she says ok or she gives up the chance of using her Groupon and you made the easiest $25 ever.

My post wasn't intended to try and persuade people to use Groupon. It was intended for people who are interested in using it and getting a viewpoint from the outside.

Here are a few more tidbits about Groupon:
http://www.grouponworks.com/why-groupon/demographics


When Groupon users want to use your service again they can look you up right from their account.

I wouldn't call Groupon a "low ball coupon". The customer is putting up $50 of her own money before she even gets a quote from you. Which is why it's important to have a website that discloses your pricing structure. What type of person is willing to front $50 on a coupon? $50 is real money to have to be able to just spend it on a coupon. Someone who is going to tie up $50 is probably someone who is more than willing to pay top dollar for quality carpet cleaning service totaling more than $100.

You service Portland, OR, 35% fall into Groupon age demographics, average household income $50,000+. Where are you going to spend your money to attract new customers? And, ultimately, how much is it going to cost you to do it?

It's not just Groupon you need to start at least looking at. Its the 1000's of alternatives that are all internet based that people are starting to use.

Walt, on a separate note, I would never promote or encourage anyone to work for less than they are worth!

This post is based on my opinion and does represent any other entity.

$75 would be extremely high for a customer especially if it's "in hope" of getting additional work.

I think groupon is going to be a race to the bottom. So I think I'll let others compete and see who wins.

If you are not a carpet cleaner what is it?

 

[XTREME1]

I see your point with the demographics :roll:

Mostly single, making less than $100,000 between the ages of 18-34 (who have just finished their degree or advanced degree, owe a boatload of money, are renting with roomates and bargain hunters. Not exactly my demographic.

I am not sure what University any of you went to but I can say when I got out I was looking for cheap beer, cheap food and loose woman

 

[Ken Snow]

I see your point with the demographics :roll:

Mostly single, making less than $100,000 between the ages of 18-34 (who have just finished their degree or advanced degree, owe a boatload of money, are renting with roomates and bargain hunters. Not exactly my demographic.

I am not sure what University any of you went to but I can say when I got out I was looking for cheap beer, cheap food and loose woman

LOL- in reverse order!

 

[The Great Oz]

I believ Groupon changed their disbursement method Matt and only sends the $25 after it has been redeemed by the customer.

One the biggest "advantages" the Groupon salespeople quote is their statistic that 25%+ of Groupon buyers don't use the coupon. "You get 25% of your coupon price from 25% of coupon buyers for doing nothing!" "More profit for you!" "If you add limitations even fewer buyers will redeem!" "More money for you for doing nothing!"

So now if they keep the money until the coupon is redeemed they get to keep the entire $50 (of the mentioned $100) from non-redeemers - unless they're also refunding the money to non-redeemers. This could be a sign of a company that is trying to maximize their cash intake before their wheels fall off, as the market is being flooded with knock-offs offering better returns.

 

[tnez10]

Groupons good for coffee shops, hair salons, ice cream joints, etc. Places with high margins and looking to get new customers in their door. Not for carpet cleaners who have to burn their own gas and perform laborious duties inorder to make $25 to $40 (That is unless you upsell the crap out of every job). No thanks, I'll pass and save the wear and tear on my equipment.