There’s an old adage with food (and pretty much anything you come across intended for consumption): Just because it tastes good doesn’t make it good for you.
Case in point: deal sites that attract and provide goods to customers at discounted prices but end up cutting into a company’s bottom line.
Groupon, for instance, generates $ 7.6 billion in annual gross sales despite wildly unfavorable customer ratings. Much of that comes from small and medium-sized companies that became caught up in a vicious cycle with these corporations.
Not only do these platforms pay 20 to 60 percent in fees, but their customers now expect significant discounts on their services. This puts an incredible amount of pressure on small companies.
Even though less-established stores can’t sustain those discounted rates, the added revenue these sites bring in forces smaller shops to stick with them. Major retailers, armed with brand recognition and extensive customer bases, have the leverage necessary to fend off advances from deal sites.
Business owners shouldn’t think they have to take losses on their products in order to gain exposure. Companies hope to recoup the income in future sales from customers they attracted through discounts but don’t realize that an alternative does exist.
A buying experience that customers feel is tailored to their preferences can satisfy patrons and sustain a vendor’s profit margins.
A More Personal Experience
Subscribers are tired of seeing the same old inventory on the same old channels. It’s time to leverage personalized technology to create modern, custom experiences through apps and websites — something discount services still fail to do.
The “Internet of Me” is spreading to every device and industry, and deal sites are no exception. Consumers demand individualized services that cater to their interests and needs. Mass discount offers can’t address this need, which will ultimately make them irrelevant.
Retailers that personalize the customer experience see increased business to the tune of 7.8 percent. Here’s how you can get swept into that upswing.
1. Monitor customers’ behavior. User ID tracking enables companies to analyze customers’ online habits to offer relevant promotions. When you know what people have been searching for, you can show them appropriate products and deals.
Rather than offer discounts that destroy your profit margins in the hopes of attracting new customers, you give them deals on things they want while still making money. The more adept you become at personalization, the higher your sell-through rate will go.
By tracking customers’ patterns across the web, you get to know who they are. This allows you to segment them into target groups and develop relationships with them. These might include preferred customers who receive significant storewide discounts, tax-exempt shoppers who work for nonprofits and the government, and members-only buyers who receive exclusive offers.
2. Talk to customers, not at them. Send customers contextual messages and real-time promotions that speak directly to their needs. You’ll become their go-to source for particular products and services because you always have the best prices and can deliver what they want.
Efforts such as welcoming site visitors based on their locations or pushing deals that correlate to the sources that drive them to your site will establish relevance right off the bat.
3. Show what you can do for them. Encourage them toward your loyalty or membership program because these initiatives tend to generate repeat purchases.
Ultimately, customers want to engage how and when they desire. Allowing people to buy on their terms creates a more personal and more dynamic experience.
Entities that have yet to implement this component are hurting small businesses across the country. Promotions should help you bring in money, not lose it. Personalization and individualized services are the future.
It’s time to give the industry the shakeup it so desperately needs.Business & Finance Articles on Business 2 Community