Thursday, January 26, 2012

Why groupon will kill you part 1

I am going to write an entire series on why not to run Groupon.  Part one, it is bad for your reputation.  All of these sites are designed to encourage impulse buying.  There is a time limit ticking down and a deal they will lose if they not act now.  People are busy and they DO NOT READ THE OFFER!  No matter how clear you think you may be in the offer, they are not going to read it.  They are going to skim it an make assumptions then press buy and their credit card gets charged.  Then they call you to schedule the serve. 

Compare this to how we normally sell our services.  Someone calls us and we talk to them either in person or over the phone.  Some people have crazy expectations.  Some people are outside our area.  Some people call the day before a major holiday and want to be scheduled before the holiday.  In each of these cases we explain what we can and cannot do and let them know we cannot help them.  They then move on to another service.   Bullet dodged.

Let me explain what happens with Groupon.  They skim the offer and read “house cleaning $75”.  They go great, my mother in law is coming this weekend and I really need more 6,000 square foot house 30 miles away from town cleaned and they press buy.  They almost never call BEFORE they buy.  I know people that sold 1,400 coupons and 12 people called before they bought.  Now you are thinking, but Derek, my offer was very clear.  When they call I will just explain I cannot give them what they want and they can get a refund from Groupon or give it to a friend.  Well yes, that is what would happen if we were dealing with a rational person but lets be clear, this is NOT a rational customer we are talking about.  This is the person that calls you for a quote and you decline their business and suggest they call your worst enemy to cuase them pain and torment.  This is evil impossible to please customer has already bought and paid for your service.  No one screaned this impossible to please customer out of your system.  These people will tear you to pieces on line because you did not deliver on their EXPECTATIONS. 

I did a small test with a Groupon like deal.  I am thankful every day I did a small test and only sold 54 of these.   I had one man that I sold a coupon just like I described above.  I kindly explained that I could not do what he needed done and to call Groupon and get a refund.  We did not even try to clean this guy.  I even pointed out that the offer said on it we could not guarantee days, we only services these areas, and the offer was for only 4 hours.  It did not matter.  This man was FURIOUS.  He had company coming.  He bought a coupon to get his house cleaned and we were letting him down.  He needed his 6,000 square foot (plus basement) house cleaned tomorrow on Friday and it was 20 miles outside our service area.  I very calmly pointed out the details of the offer but it did not matter.  I even told him how to get a full refund.

 Now the coupon was very clear.  If this went to court I would win in 45 seconds.  But in this case I get tried in a new court called on line and social media.  This gentleman, and I use the term very loosely, then went online to Yelp, Google, City Search, and anywhere else he could find and posted terrible reviews on how he had scheduled a cleaning service with our company and we refused to deliver what he was promised causing his big family reunion to be a disaster.   Yes I responded on line but it lowered my star rating and a lot of people do not read the comments and now my average is lower.

Some people I have shared this story with said I should have cleaned him just to keep him happy.  I disagree.  This man was impossible to please and basically an evil human.  If I had managed to get the 10 hours of labor clear on 24 hours notice to clean his home for $37.50, this is the kind of person that does not treat people well.  He would have mistreated my employees maybe causing me to lose some employees.  I would have had to bump other good full price paying clients.   I would have lost hundreds of dollars and he probably would still write a bad review.  I was *&%$ the second he pressed that buy button.  All I could do is minimize the damage.  For this reason Groupon, Living Social, and any other web platform that sells my service without having the client first talk to me, is doomed to fail.  We must always talk to the client first to make sure they have realistic expectations before they buy because no matter what disclaimers you have, if you cannot meet their expectations after the purchase they will not be happy.

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