To Group Coupon Or Not: Small Business Guide to Groupon, Google Offers, LivingSocial and Others

I enjoy writing my marketing blog. Most, if not all, of the articles are somewhat dense and tackle issues from highly quantitative and analytical perspective. Following that model, I wrote a series of articles on Groupon and whether or not businesses should consider it for acquiring new customers. 

The articles used arcane language that is not suited for easy reading.

To make it easy for small businesses to decide whether or not they  should run Groupon, LivingSocial, BuyWithMe etc like promotions I recently wrote an eBook.

If you are small business owner and worried about

1.  How to acquire new customers?


2.  Whether or not you should run a promotion deal on Groupon, LivingSocial, BuyWithMe and other sites


3. Whether or not Group Coupon is indeed risk free  advertising


4. What else you give up and the hidden costs of such promotions


5. The pitfalls of running a Groupon/LivingSocial/etc promotion

 This book is for you.

Read more about the reviews, contents and sample chapter at the book website.

New Qwest Ads breaking through the clutter

The new Qwest are not only breaking through the clutter but also are effective in repositioning Qwest as the broadband solutions provider. The Ads do not talk about features like speed and GHz but rather talk about customer pain points and Qwest's benefits.  Great work by the new marketing chief who brings his experience marketing consumer brands like Sonic.
See the videos here, and  here 
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Pay What You Can Pricing - Early Results from Sensorielle

Facing falling customer traffic due to recession, Sensorielle spa in Boulder, CO decided to go for a pay-what-you-can pricing scheme. As previously reported, they had posted fixed prices but asked their patrons to pay for the services what they value/afford. The goal was to reduce pricing as a concern for customers and to encourage their regulars to return to the Spa. Recently the owner of Sensorielle spa, Ms. Jewl Pettaway, a Boulder Net member, posted early results from her pricing experiment. Here is the full text of her posting in the Boulder Net discussion group (posted with permission).

At Sensorielle, we love our new concept, and would like to hear from clients, colleagues, and the general public about how you feel about it. Below I have expressed some of what we are experiencing.

Some clients feel guilty if they don't pay the full price. We certainly don't want that! The idea is to allow everyone to care for themselves regardless of their situation. So, if you come less because you feel like you need to pay 100%, it sort of defeats the purpose. We know this is something very new, and may be hard to swallow at first. We hope that people will get use to it and really come as much as they can and pay all they can truly afford.

Other clients have expressed a concern that we will not make it because people will take advantage. I can tell you, people taking advantage is the tiniest minority of what we are experiencing so far!

Since our launch on February 1, we have found a great balance in people coming weekly but paying a little under the suggested pricing, people coming less frequently and paying full price or more, and those paying a bare minimum. They seem to be the minority, and do not come as often for whatever reason.

Most clients we see give us a full range of "5's" on their feedback cards, and many express how grateful we are to be doing this for our community even (and especially) if they are paying full price or more. It has been really rewarding for us, the entire staff of Sensorielle, to see this idea manifest in the best possible way we could have imagined.

So far, our cash flow the is better than last year with full pricing, and our average service ticket has only gone down by about $15-$20! We estimated it would reduce by about $40. It is amazing what can happen when you launch yourself fully into a passionate idea with no research available!

What are your thoughts?

Namaste,
Jewl

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Longevity of Crocs Brand in Question?

24/7 Wall Street analyzed 100 brands and makes a prediction that 12 brands will not survive after 2010. The third on in the list? Crocs, the footwear company in Niwot, Colorado.

Two weeks before the credit extension, the company’s auditors gave the firm a “going concern” letter, an indication that there would be reasonable chance that Crocs would make it another year. In the fourth quarter of 2008, Crocs lost $43 million after making $55 million in the same period the year before. Revenue fell from $225 million in the last quarter of 2007 to $126 million. Crocs won’t make it through the year.

The stock did fall from its highs last year of $72 and I wrote about it in the Boulder Net blog. The Wall Street Journal reported that the trend does not favor Crocs. In that article an analyst with Wedbush Morgan Securities was quoted saying,

"Crocs's problems have less to do with the recession than with fading public interest in its signature footwear. Their problems started earlier."

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Analyze this - Who is writing the Boulder Net Blog?

There is a neat website called Typealyzer, that can take a blog URL and tell the rest of the world something about the person who is writing the blog.
So what does it say about this blog's author?  "Scientist".

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Boulder - Paradise or Not Discussion

I would like to point you to the discussions going on in other, extremely well written, blogs. The discussion started with Megan Soto of LaunchSquad stating in her blog, Boulder, I’m Lookin’ And I’m Likin’,

What is it about the Boulder scene that makes me yearn so to be a part of it? My curiosity-turned-fascination-turned-safe-distance (I swear)-obsession was probably fueled by the fact that I can’t be part of it. My location prevents it and they just don’t seem interested in pursuing me as a remote member of their clan, though, granted, no overt outreach was established from my end.

Her fascination with Boulder is understandable. I am not however fully convinced about the startup scene, especially given the tough economy.

In response to Megan, Boulder Blogger Brian says, Boulder is Nice, but No Paradise:

Rather, my point is to try and paint a more realistic picture of the city. Because frankly, while Boulder is nice, it’s no paradise.

There are dirty people here. There are too many bikes, and they run too many stop signs. There are mountain lions, and they eat humans. There are college students, and they don’t act like humans. There are 12,00 foot peaks, but they’re far away. And fuck, there’s not much water here. Or nice trees.

What do you think?

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The High Cost of News Reporting - Rocky Mountain News

From tomorrow Denver will have only one newspaper. The Rocky Mountain News said that it will cease publication after tomorrow. They are not talking just about stopping the print edition, they will cease news reporting, print or online.
The story reported in Rocky Mountain News website says why they decided not to go to online only version:

Mark Contreras, vice president of newspapers for Scripps, said the math simply didn't work.
"If you cut both newsrooms in half, fired half the people in each newsroom, you'd be down to where other market newsrooms are today. And they're struggling," he said.
As for online revenues, he said if they were to grow 40 percent a year for the next five years, they still would be equal to the cost of one newsroom today.

It goes to show that news media is a high fixed cost operation. The fact that online version has a marginal cost of $0.00 is immaterial, they still need the news room to report news.
Can they go to a fee version? Not at this juncture. Once you give away  a service for free, customers are not going to value it enough to pay for it at a later stage. According to their cost estimates the total revenue (subscription plus Ad ) has to be at least $100 to break even. A tall order.
So can free work for all the other Web2.0 services?

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Crocs Signaling Its Focus On Brand Value With New CEO Pick

Crocs saw its shareholder value fall by close to 96% from its highs in 2007. Crocs stock has fallen to $1.45, a downfall that is twice as steep as the rest of the market. Crocs announced that Mr.John Duerden will become the new CEO of the Niwot, Colorado based company. Crocs footwear may have few takers these days, as evidenced by the fall in revenues (to $126.1 million, half of previous year number), but its brand still has some equity that quite possibly some "brand elasticity" that can be transferred to other related items.

The economy and its current product line does not bode well for Crox. Mr. Duerden's appointment signals a possible Crocs' plan to leverage this brand equity, possibly with line extensions. The new CEO used to run another big brand in footwear, Reebok. Most recently, Mr.Duerden was with the Chrysallis Group, a brand development and renewal consulting group that he founded in 2006. We should expect him to be more brand focused and rebuild shareholder value through products with higher premium rather than increasing sales with lower priced items. Crox cannot win by  going  after market share by competing purely on price, profit should be the number focus.

Of course for all those coming to this post from Yahoo Finance Crox message board, this is just my opinion. Mr. Duerden's resume is verifable and it is true. I am not making any recommendation here. You should not make your stock decisions based on this or any other opinions. Look at my previous post on Crox  from last year here.

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Valuing Free - What will you pay for something you always received for free?

Many web based free services, including from market leaders like Google, are shutting down. From Boulder, recently Andrew Hyde called R.I.P magnolia a Boulder based startup. Is there a problem in giving away a service that adds value for free? I believe there is. Most web services focus on building user base with the hope of Ad supported business model. While free is never a good business model, the dependence on Ad is coming under severe threat more now than ever in the past.
Can't these services simply start charging their subscribers for the service? The problem is if your users never paid for it and if alternatives are available their reference price for the service is $0.00 even though they may get great value from the service.

For a related article on increasing reference price from $0.00, see my article in my Unbundled Pricing blog.

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Applying to Job Postings in Craigslist

Craigslist has no advertisements. It makes its money from job postings by employees. So are all the job postings in Craigslist real and worth applying for? One of the Boulder Net Professional (a LinkedIn based Colorado Networking Group) posed a question to the Boulder Net, whether anyone got a job by applying to one of those Craigslist postings. Another member said that she had applied to several but never got any response and doubted whether or not the postings are real. There is a really nice article in today's Wall Street Journal that asks "Is it a real job behind the job posting".

If you're launching an online job hunt for the first time in a while; take caution. What may look like an ad for employment may lead to something entirely different, like a hard sell for career services or job-training manuals. Or worse, it might be a plan by identity thieves to get you to share sensitive personal information via "phishing" expeditions. Some of the job postings -- sometimes for positions long filled -- also could be from recruiting agencies looking to collect résumés.

Definitely a advice we should all take to heart and follow. It may be a better idea to send a resume that only has an email address rather than the home address. But as the article points out, applying for these online postings may only have zero to low response rates.

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