One of the real treats of my weekend is the home delivery of the Sunday New York Times. I love the quiet of a Sunday morning, drinking coffee, devouring the newspaper. I know I could read it all online (with a paid subscription)…there’s just something about the feel of the newspaper I still savor.
Yesterday, there was an article that — in the pre-Internet days…and, yes, those days did exist — I would’ve cut from the paper and saved. Instead, now I get to share it with you via the link: CLICK HERE
It seems when researchers studied the effect of participation with e-coupoun company Groupon, they made a pretty amazing discovery.
“Offering a Groupon puts a merchant’s reputation at risk,” said John Byers, a professor of computer science at Boston University who worked on the project. “The audience being reached may be more critical,” he said, “than their typical audience or have a more tenuous fit with the merchant.”
In other words, the customers that were attracted by the lower price, according to the article, “were on average hard to please. After they ate at the restaurant or visited the spa, they went on Yelp and grumbled about it. This pulled down the average Yelp rating by as much as half a point.”
As the report states, the study by Harvard and Boston University researchers indicates that by discounting your price through this effort, many businesses attract a type of customer who may create instability in the long-term reputation of their business.
My favorite blogger, Bob Lefsetz, writing about the music business, mentioned this article in a message last night. His conclusion?
“Whew, you think you want everybody, but you don’t. You only want your core, you want to grow slowly, you want lifers, not casual observers. Discounts hurt if what you have is of value. Sometimes you’ve just got to wait. Focus on your music instead of your marketing. Most people don’t like most things. And the best way to convince them they do is via quality and word of mouth.”
It’s the same thing in ALL business: You don’t want everybody.
Focus on what matters. Create a distinctive product or service — and deliver an Ultimate Customer Experience ®. You can charge a fair price. Sure, you’ll lose some potential customers. However, the word will get out — you will develop advocates — you will win in the marketplace — and, most importantly, you will be profitable.
Isn’t that better than offering a coupon, which — in effect — tells customers, “You never have to pay full price here”?
Attracting customers bad for your business?
October 3, 2011 · 2 comments
One of the real treats of my weekend is the home delivery of the Sunday New York Times. I love the quiet of a Sunday morning, drinking coffee, devouring the newspaper. I know I could read it all online (with a paid subscription)…there’s just something about the feel of the newspaper I still savor.
Yesterday, there was an article that — in the pre-Internet days…and, yes, those days did exist — I would’ve cut from the paper and saved. Instead, now I get to share it with you via the link: CLICK HERE
It seems when researchers studied the effect of participation with e-coupoun company Groupon, they made a pretty amazing discovery.
“Offering a Groupon puts a merchant’s reputation at risk,” said John Byers, a professor of computer science at Boston University who worked on the project. “The audience being reached may be more critical,” he said, “than their typical audience or have a more tenuous fit with the merchant.”
In other words, the customers that were attracted by the lower price, according to the article, “were on average hard to please. After they ate at the restaurant or visited the spa, they went on Yelp and grumbled about it. This pulled down the average Yelp rating by as much as half a point.”
My favorite blogger, Bob Lefsetz, writing about the music business, mentioned this article in a message last night. His conclusion?
“Whew, you think you want everybody, but you don’t. You only want your core, you want to grow slowly, you want lifers, not casual observers. Discounts hurt if what you have is of value. Sometimes you’ve just got to wait. Focus on your music instead of your marketing. Most people don’t like most things. And the best way to convince them they do is via quality and word of mouth.”
It’s the same thing in ALL business: You don’t want everybody.
Focus on what matters. Create a distinctive product or service — and deliver an Ultimate Customer Experience ®. You can charge a fair price. Sure, you’ll lose some potential customers. However, the word will get out — you will develop advocates — you will win in the marketplace — and, most importantly, you will be profitable.
Isn’t that better than offering a coupon, which — in effect — tells customers, “You never have to pay full price here”?