Group Buying was massive in 2011 but it is steadily losing ground. However many companies are still using it for promotion and many people are still buying them to capture the deals.
Many businesses are using Group Buying services blindly. I urge you to do your due diligence before diving in. There is a large impact and you need to be prepared for it.
* In this article I will not actually refer to the Group Buying Service nor the company we dealt it.
My Experience With Group Buying
I will start off by outlining my recent experience with a Group Buying promotion that sparked me to write this article.
I am getting married in August and of couple weeks ago my fiance and I saw a discount for an Event Rentals company. “Pay $100.00 for $400.00 worth of services”. Now we are on a budget for our Wedding and needed to get a backdrop and center pieces. I browsed the companies website, went through the prices and figured this would help us save some money on our Wedding.
We purchased the coupon and scheduled an appointment.
Upon meeting with the owner of the company, she expressed how the Group Buying company said they would sell around 10 however they sold ~70.
Wow, 70 sales that is great! Well, maybe not…
We were told we would receive a quote within the day, it has now been almost 2 weeks. I would say that this company is so swamped from ~69 other people like me scheduling appointments that they have forgotten to get us our quote. I am quite disappointed in the service we have received from this company.
The Potential Impact of Group Buying Promotions
From their perspective: The company ran a promotion and made 70 sales. They would classify this as a huge success.
From the consumer’s perspective: I purchased a coupon and was very excited to finalize my Wedding plans. I am extremely disappointed in the service and will most likely NOT recommend this company in the future.
The outcome: I would classify the promotion as a failure. (The company may not even realize this impact)
Things to Consider
If you are a business thinking about running a Group Buying promotion, here are something things to consider:
Can you handle a large influx in sales?
A large influx in sales for a product based company is fairly easy to handle. People may experience a longer wait time in line, but it is a product which you simply sell (unless it is possibly hand-made to order).
A service based industry is another story. If you are too busy, you don’t take in new projects or schedule them in the future. But running this promotion you are making a promise to a large amount of clients who do not care if you are busy. They want to redeem there coupon now, when it is convenient for them.
Make sure you can provide the same level of service?
You better make sure that you can maintain your level of service. If someone comes in with the coupon and you simply rush them out, take to long, whatever it may be, that will hurt the image of your company. These customers should receive the same service you would provide to a full paying customer.
What are your Group Buying horror stories?