Cutting through the voucher clutter

In my burgeoning Hotmail inbox (3,981 unread and rising) there’s one email I receive each morning like clockwork and it’s one I’ll definitely open. It’s there first thing, nestled between newsletters and supermarket updates, the subject line isn’t imaginative and the layout isn’t particularly pretty. But it’s always worth a peek – it’s from Groupon.

Not too pretty, but effective

Like most of the other subscribers I discovered it through a friend, when she sent me something she thought I might like. The voucher was spot on for me – I was looking for a pre-wedding spa treat that didn’t break my (less burgeoning) bank – and the discount was fantastic at 77% off. It was also spot on for her, because Groupon works on the basis that offers only go ahead if a certain number of people take them up, plus you get £6 for each person you tell who takes up the offer.

In this voucher culture we’re all trained to hone in on and interrogate deals, but anything upward of 70% off something you could actually do with is still pretty rare. Groupon offers are all timed to last for 24 hours, so there’s a slight ‘auction’ feel, and each person who signs up is incentivised to get as many other people as possible to buy. And it also seems like a good deal for the brands involved – a guaranteed number of new people through their door. Very clever.

Interesting to think of the longer-term plan, though. At the moment they’re broadbrush offers in the local area – the majority are relevant to me, but probably won’t always be (how many London spa days can a girl really afford?) Because of the offer mechanics, they probably can’t afford to segment just yet.

Also, interesting for the businesses involved – this is a great penetration initiative but is it enough to inspire longer-term loyalty? Clever brands will capitalise with a follow up strategy – the spa I went to was certainly quick to hand me another money off voucher, but not one as tempting as the first and they haven’t been in touch since. So for the moment I’ll keep peeking and recommending but as with most schemes, Groupon will need to evolve and innovate to stay read.

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3 Responses to Cutting through the voucher clutter

  1. ken says:

    Not being in marketing never really understood the purpose of Vouchers although I use them!
    Presumably they are part of the loss leader approach – but with Groupon the loss must be considerably bigger then the leader.

  2. Ann says:

    Ken; Presumably the simple economics are that as long as the variable costs of the offer are more than covered the voucher is cost free -or that in the case of a shelf product the normal profit is very high!!

  3. Interesting post! I too keep an eye on Groupon (although haven’t been tempted by any offers as yet). But it seems they are now attracting the attention of the big players (for now just in the U.S) as reported by Econsultancy here: http://bit.ly/cn5UBS

    With such an impressive takeup for the Gap offer in the States, I’m sure it won’t be long before similar deals begin appearing across the pond.

    The trick will be to retain the feeling of ‘local’ whilst offering something that’s truly national, or even global.