Groupon was in trouble last week in the UK for breaching consumer protection laws, specifically:
- exaggerating savings and misleading on the value of the offer,
- merchants becoming swamped and unable to deliver deals, and
- not properly substantiating marketing claims made by merchants about products, especially relating to health and beauty products
It’s important to remember that adopting any of these approaches reflects badly on the business running the offer as much as the deal site – it’s a short-sighted strategy that is highly unlikely to reflect well on your business and encourage customers to become long-term clients. Here’s why:
Exaggerating savings and misleading on the value of the offer:
Protecting your margins by inflating the pre-discount price of existing products is a risky and misleading tactic.
For a daily deal to be successful, you need customers to enjoy their experience and return as full price clients. Trust is a key part in building this type of value relationship with your customers, and the internet makes it very easy to compare prices, so the likelihood of being found out is pretty high – in which case trust will be very difficult to regain.
- Make sure your website and store match the prices quoted in your daily deal
- Consider running an offer on a new product or experience where consumers won’t have an existing ‘reference price’. For example, if you’re a restaurant where the average main is priced at $20, consider launching a tailored menu for your offer: a taster menu, a bundled take-away offer featuring new dishes, an evening that includes some live music, merchandise or a collaboration with another local business nearby. Use your deal to promote an event (10th birthday, cultural occasion) and the focus will be taken away from the underlying value (as well as providing a more unique experience)
- Check the terms of your contract with the deal site as they may also penalise you if you run a future offer elsewhere at a lower price than your voucher deal with them
- Proof-read the text the deal site uses to promote your offer to ensure it is accurate, prior to publication. It should be highlighting your best assets and making customers want to find out more, not leading them on a road to disappointment
Merchants becoming swamped and unable to deliver deals:
There are a lot of horror stories about underprepared businesses not coping with the ‘voucherlanche’. It’s a surefire path to business damage – or even death, since it doesn’t only impact your new but also your old customers.
The three key steps:
1. Calculate capacity
2. Anticipate behaviour
3. Protect, plan and communicate
Our master toolkit covers these steps in detail but for an overview see our tips on ‘How To Cope with a Voucherlanche’
Not substantiating marketing claims:
This is a tricky one – certain businesses will always play close to the edge with marketing claims and if you’re one of them, you’re probably unlikely to change.
If you don’t consider yourself one of these types, however, be aware that associating too closely with businesses that do have such a reputation will cast an ominous shadow in your direction too.
This means be very careful about the deal site you choose to partner with:
- Monitor their other deals before you proceed: do you want your business to feature alongside such other brands and offers?
- Ensure you have ‘final edit’ over the marketing copy used on the deal site to sell your business.
- Provide your own images to create a perception of authenticity, not airbrushing
- Avoid bold, generic statements and replace with genuine testimonials from satisfied customers and incorporate on your website, as well as in the deal copy
You need to be comfortable that you can back up the claims made, or you’ll end up with disappointed clients who tell the world how upset they are – not to mention run the risk of censorship by advertising and consumer protection watchdogs.Tweet