Auto Glass Companies Experiment with Deals
of the Day, Groupon
October 5, 2011
by Penny Stacey
Groupon has grown in popularity in its short three years in existence,
and a host of other similar websites and services have popped up
with similar concepts during that time. In recent months, glassBYTEs.com/AGRR
magazine has seen several auto glass retailers market their services
through such programs.
"It's essentially a community-based promotional program, where
a group of people combine their buying resources to implement and
activate a deal with a local vendor," says Patric Fransko,
chief operating officer for Zola Distributing company, a window
film supply company. "The vendor has the ability to set the
number of people that has to take advantage of the offer in order
to activate it. So they may say 50 people have to take advantage
of the offer before it becomes activated. So essentially what they've
done is ensured themselves if that coupon were to be activated they
have 50 customers, because the customers have to pay Groupon at
the time of saying, 'yeah, we're in on the deal.'"
Cascade Auto Glass, based in Vancouver, Wash., has participated
in several of these, including a local program called "Portland
Perks" and a "Deal of the Day" program through Fox
26 in Medford, Ore.
In one such case, Cascade offered a deal in which the customer
would be required to spend $30 through the program, and in return
would receive a $100 gas card when he purchased a windshield replacement
from the company. The company also has issued promotions in which
the customer would pay $30 to receive $100 toward a windshield replacement,
along with three $10 gift certificates to a local Mexican restaurant.
"We thought we'd try it out," says Cascade vice president
However, Sharkey says it might be too early to determine if it's
worked as a marketing strategy. "It might take a while to shake
out," he says.
Raphael Garcia of Southwest Auto Glass in El Paso, Texas, says
his company was resistant to using such programs initially, but
recently decided to try out the method.
"As a matter of principle it's not something we've done, and
offering discounts isn't something we've done, but in the current
economic climate I've had to re-evaluate that," he says. "It's
an investment, though; it's a matter of making impressions."
Southwest participated in a program called "Seize the Deal,"
which is available throughout the United States. In the deal, customers
would pay $25 to receive $50 toward repair or replacement service
from the company.
"I think the redemption rate was higher than other types of
advertising," says Garcia.
However, one drawback some note is the cost of such services. While
in many cases offering the deal is free, most sites take a portion
or percentage of what a company sells through them.
"[Some of these] take a good chunk of what you sell, so you've
got to add that into the costs," says Sharkey.
"Groupon is great for getting customers, but it doesn't really
make you any money," adds a representative of Delta Glass in
Denver, whose company offered a Groupon this week.
The representative, who identified himself only as "Keith,"
declined to speak further on the topic, noting how busy his shop
had become since offering the deal.
However, Garcia points out that in some cases such pricing and
percentages can be negotiated. Likewise, he suggests those considering
such modes of advertising look at them long-term.
"What I would suggest to people is to look at it more as an
investment," he says. "The redemption rates are high,
but you want to do your homework when it comes to crafting discounts
or specials, and make sure you know what it is you're offering so
you can get a good return on that investment."
He also recommends businesses look at the way in which the discounts
are advertised and promoted-and beware of offering too many specials.
"This one in particular uses radio, so we get some value there,"
he says. "You also want to make sure you don't de-value your
brand. If you condition [customers] to wait for another discount
you could hurt yourself."
Has your company utilized Groupon.com or any other daily deals?
Please email thoughts about your experience with the sites to firstname.lastname@example.org.
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