By

David J Dunworth O.C.E.

(CEO of TeXT-Icon Mobile Marketing Communications)

What’s a retailer to do? The success of the Groupon promotion was truly amazing, but how do I keep them coming back without a deep, deep discount? Therein lies the rub.

Alternatively, what does a retailer do when the Deal of the Day email promotion brought in so much activity that they failed to estimate the success level? Again; a cause for pause.

I applaud Groupon for its tremendous success in revitalizing a dying industry; email marketing. With Opt-In subscribers, targeted ads hit the inbox and not the spam filter. Groupon’s overwhelming success as a marketing vehicle is one for the record books. The overwhelming success of this concept has breathed new life into the email-marketing concept.

Like all good things, however, nothing is a perfect solution for business growth and sustainability. A terrific tool to boost brand awareness, sales generator (however discounted and paid for) and marketing powerhouse, it generates success, and another need. What is too much success and why is this not the panacea? That is an easy one.

Let us imagine a bakery that elects to use a Deal of the Day email marketing company (Groupon isn’t the only one out there, just the most successful) to market their new business. The 50% off email is sent to all opt-in members of the marketer, scheduled for Tuesday from 6 am until noon. The owners and staff of the bakery work diligently the prior weekend, not only managing the routine customers shopping and sampling their wares, but doing everything in their power to ready themselves for what is expected to be a terrific retail opportunity they and the marketer has estimated will partake. The back of the store is a blur of activity; icing being made, stacks of flour and sugar block the narrow walkways of the kitchen and the staff bumping into each other in attempts to “get it done on time.” The only thing different about Monday is that the fever pitch of activity is increased, as the baking has started, racks of unfrosted cupcakes are everywhere. Butter, fondant, pastry bags and stacks of baking sheet pans are everywhere, creating a mess in every corner of the tiny kitchen. Throughout the afternoon and long into the night, the activity is nearly out of control. Here’s hoping the production staff will have produced enough product to meet the intended demand. There will be little sleep Monday night, and a very early rise on Tuesday, the Deal Day.

What if….1. The moment of truth, will this event put the bakery on the map? They can only hope. The morning starts out a bit quieter than everyone expected, but steady customers find their way into the store and through the cash register. The owner is nervous about the amount of time sensitive product on hand. What are they to do with the hundreds of potential leftovers? Nails bitten down to the quick, the idle staff begins to pace. Then it happens. The floodgates open and the rush of business is daunting, with wave after wave pounding onto the doorways of the store. Now the only thoughts are whether there is enough to meet the demand, or if the crowd will turn ugly if they exhaust inventory.

What if….2. The other decisive moment, will this event help or hurt the reputation of the bakery? They can only hope it is a positive experience. Like the previous run up to the morning of truth, the staff and ownership have spent days in preparation for Tuesday morning. The floodgates open at the moment the front door is unlocked, and the crowd of customers build steadily for the next four hours. It’s now 11 am, and the entire inventory is depleted to a few broken and smudged cupcakes, all un-servable. What now?

Both of these scenarios are completely plausible, not just at a bakery, but for just about every type of business using this marketing scheme. Rumor has it these exact results have been experienced, only much worse and much better. The economics of Deal of the Day email marketing programs are such that there is little, if any net profit in the offering for the owners of the given business using the campaign. With the up to thirty-five percent fee the Dealmaker charges, the cost of materials and labor, and the fact the product is sold at 50% off, what is left for profits? It rarely exists under these conditions, but the exposure may well be worth the overall cost, especially if the promotion turns out well. If it does not turn out positive, it could be the trigger for a tragic set of events. Everything from cash flow troubles, consumption of product ingredients for “normal” production, angry customers, damaged brand and credibility; bad local press and a whole host of problems can drive a business out of business all together.

What does a retailer using this form of marketing do AFTER the event to re-capture those who partook and enjoyed the promotion? What does a retailer do when disaster strikes, causing dissatisfaction? It’s a known fact that upset customers tell 7 to 9 others about their negative experience, while satisfied customers tell no more than 2 or 3. How can they either take advantage of the customers in either situation?

An Affordable Hi-Tech Solution

Text marketing, in several ways, which is affordable, easy to implement, customer controlled and can be tracked. Through an on-going marketing effort to grow a “preferred customer” or “fan club” database, when the Deal of the Day event occurs, and new customers Opt-In to the database, follow up, rewards, surveys, contests and follow on coupons can be transmitted to them long after the Deal Day event. The combination of the two programs, Deal of the Day and database text marketing not only provides additional tracking information, it is a platform to accomplish multiple marketing goals.

With a plethora of marketing solutions from which to choose, a mobile marketing plan is the biggest bang for the buck. If a business is intent on stable, long lasting growth through their marketing efforts, a comprehensive mobile marketing strategic plan is the most cost-effective and positive result tool in the marketing toolbox.

Happy Marketing!

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David J Dunworth is an internationally acclaimed author and presenter on the subjects of business, focusing on the entrepreneurs and emerging enterprise arenas. He is the CEO of TeXT-Icon Mobile Marketing Communications (www.text-icon.com), an international text and video communications firm offering affordable and bleeding edge technologies for marketing.

You can read his blog by visiting:

http://www.theovercaffeinatedentrepreneur.wordpress.com