{"id":944,"date":"2010-11-23T08:52:25","date_gmt":"2010-11-22T22:52:25","guid":{"rendered":"http:\/\/www.razchorev.com\/?p=944"},"modified":"2010-11-23T08:52:25","modified_gmt":"2010-11-22T22:52:25","slug":"what-are-social-coupons","status":"publish","type":"post","link":"https:\/\/www.razchorev.com\/newme\/what-are-social-coupons\/","title":{"rendered":"What are Social Coupons?"},"content":{"rendered":"
This is a guest post by Slade Sherman, Founder and CEO of MyZerr.com<\/a>. Slade is a successful entrepreneur, with over 15 years experience in customer loyalty and rewards industry, who has recently launched MyZerr.com in Australia, combining his own experience and expertise into the social-sphere.<\/em><\/h5>\n

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The release of the Facebook Deals service earlier in the month follows the recent growth of a number social coupon applications that present businesses with new and exciting promotional opportunities.<\/p>\n

Options in the social couponing space generally fall into two very different categories being \u2018Deal of the Day\u2019 sites and those that make use of \u2018Network Deals\u2019.<\/p>\n

Deal of the Day Sites<\/h2>\n

The most well known \u2018Deal of the Day\u2019 site is Groupon. These services band thousands of users together who sign up to an email list to get bulk discount deal offers from local businesses. The users typically get one deal per day per city and well known Australian examples of companies in this space include Spreets, Scoopon, Cudo and Jump on It.<\/p>\n

\"Google<\/a><\/div>\n

These sites are often referred to as \u2018Group Buying Sites\u2019 but they should not be confused with Social Network Groups. A \u2018group\u2019 implies that members have a relation or connection to one another, in the case of \u2018deal of the day\u2019 sites the only connection is the fact that users have signed up to an email database and accepted to receive an email each day. Group? No. Email List? Yes.<\/p>\n

Network Deals<\/h2>\n

Network Deal sites make use of data gathered by a social network to allow businesses to connect with and promote deals to users of the social network. The best-known examples of these sites include Foursquare and Gowalla who make use of location based check-in data to allow businesses to promote deals to users in that closed network based on their activity. Facebook Deals appears to be modelled on this approach and the move by Facebook is significant because of their network of 500 million users.<\/p>\n

The value of the network deals sites is in the database of \u201ccheck-in\u201d activity and the ability potential advertisers will have to target promotions based on this activity. The possibilities include getting deals based on your age, sex, past buying and even your real-time location.<\/p>\n

What\u2019s Better for Business?<\/h2>\n

As someone who has built a business based on the Network Deals approach I should first disclose some bias. While there is merit in Deal of the Day sites, I believe the longer-term value of relationships and activity built around social networks is much better for businesses for these reasons:<\/p>\n

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  1. Good social networks are anti spam and employ algorithms to discourage advertisers to send spam deals to everyone. Deal of the Day sites promote one deal per day to \u2018everyone\u2019 in that city so while it achieves the objective of getting business, it also results in a lot of spam to those customers who do not take up the deal.<\/li>\n
  2. Leading on from the previous point, it\u2019s difficult for most of the Deal of the Day sites to understand their customer base because in most cases all they have is a generic email address and city. Social networks know so much more about users allowing them to tailor relevant deals.<\/li>\n
  3. Deal-of-the-Day sites are popular because they work, but businesses need to ensure that they can afford the deal along with the fee they pay. If you are offering 50% off as your deal and then need to pay 50% of the remaining income you are giving up 75c in the dollar to get a new customer. This compares with free and results based options of \u2018Network Deals\u2019 sites that don\u2019t force the business to cut margins so dramatically.<\/li>\n<\/ol>\n

    Deal of the Day sites will always appeal to those businesses chasing short-term sales and they are very effective for that purpose. But, business is a marathon not a sprint, and for long-term customer engagement, a strategy of connecting with customers through social networks is more sustainable.<\/p>\n

    An example of one business using the Network Deals approach is Melbourne based Planet Chocolate franchise, who recently setup a coupons tab on their Facebook page for their 4 stores. The coupons give their fans who \u2018like\u2019 Planet Chocolate additional deals and this strategy resulted in over 250 \u2018likes\u2019 in a week and 62 additional sales.<\/p>\n

    \"Facebook<\/a>
    \n
    \nThe Planet Chocolate promotion doesn\u2019t have the short-term impact of a Deal-of-the-Day promotion but over the year Planet Chocolate will continue to build their Facebook fans and at 62 additional sales per week and growing, the long term value of the promotion will be far greater to their brand.<\/span><\/div>\n

    Tips to get you started with Social Coupons<\/h2>\n

    Promoting online has many benefits over traditional coupon approaches. The single biggest benefit is the fact that most coupons solutions online are \u2018results-based\u2019 meaning you only pay for the promotion when it works.<\/p>\n

    When promoting online I recommend the following:<\/p>\n