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Customer Service: Don't bite the hand that feeds you

Customer Service: Don't bite the hand that feeds you

Coupons have been a great tool at the disposal of marketers for a long time now. Groupon – the company that combined couponing with the concept of group buying - stepped into the limelight not too long ago. Sad to say, but Groupon fizzled as quickly as it rose into prominence. So what went wrong?

Businesses hire marketers to create awareness or “spread the word”, about a new or an existing product that they intend to sell to their customers. The marketers, in turn, among other tools, employ couponing as a way to induce those customers to buy the product. This system stood the test of time, because the marketer clearly knew who their “Customer” was – the businesses that hired them. And the businesses that hired the marketer knew who its “Customer” was – the customer(s) that ultimately bought its products or services.

Groupon failed to grasp this fundamental principal. Groupon, it seems, either erroneously or intentionally did not have the fidelity as to who its “Customer” was. Because, from day one of its operations, Groupon, was more interested in signing up end users/customers on its website rather than paying attention to the small businesses’ needs. This made perfect sense for Groupon, because the more customers it had in its database the more they could charge the businesses to reach those customers. So, blinded by its lust to sign up users, Groupon made the cardinal mistake. Users were flocking to its site to snag the deal-of-the-day in droves because these attractive deals were being offered on the backs of small businesses that were experiencing marginal, if any, increase in traffic but were losing significant revenue partnering with Groupon.

So when the businesses balked and the customers started to look elsewhere, either due to the daily-deal fatigue or the lack of perceived value, it was only a matter of time before Groupon’s business model crumbled like a cookie.

The old adage: Don’t bite the hand that feeds you, applies perfectly to the case study of Groupon. But the truth is Groupon is not an exception. In the online universe, and particularly in the home referral space, companies like Angie’s List, Home Advisor and the like are notorious for fleecing the small businesses (their customers) they supposedly try to showcase on their sites. Angie’s List: despite spouting nobly that advertising does not affect the page ranking of businesses, their dirty little secret is that they sell their rankings to the highest bidder. Similarly, Home Advisor: sends a user job request to multiple businesses and awards the job to the highest - but not the best - bidder/business.

Businesses need to understand that in order to start and grow their business they need two key ingredients: A good product and great customer service. It might take some time; slowly but surely, though, the word gets around and the customers will come. Organic growth will sustain the test of time. Employing middle-men (the marketers), to open the lines of communication between businesses and their customers, in the best case scenario might account for increased awareness, but whether that will translate into actual paying customers, is the risk/reward factor a business has to strongly consider.  

We at housspros.com take pride in knowing our customers – the businesses that offer services in the online home repair space and the home owners who need those services. It is with this clear understanding, we try to run our business every day. It is for this reason we never play favorites. We conduct our business in a very transparent setting with honesty and integrity as our guiding stars. We provide, in plain English, the expectations and responsibilities of each parties to one another. We also state in plain English, that we (housspros.com) will never act an as intermediary in any of their business transactions. 

Source: cartoonstock.com



Last Updated: 2017-10-30 16:19:21

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