Here are the 4 goliaths, but let’s not forget about the smaller, tightly focused niche sites that cater to moms, wine-lovers, GLBT, offices, mobile users, foodies, etc. via @mashable
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Here are the 4 goliaths, but let’s not forget about the smaller, tightly focused niche sites that cater to moms, wine-lovers, GLBT, offices, mobile users, foodies, etc.

via @mashable

Bloomspot has solved merchants’ biggest problem: profitability!

Plus, it involves nice rewards for customers. So can everyone be happy now?

Bloomspot’s new program, called Bloomspot PRIME, was developed to track customer spending beyond the initial voucher. It also serves a tool to incentivize members to buy more from its merchants. For each additional dollar spent, Bloomspot rewards the customer with 20% in Bloomspot credit. Sweet!

Apparently, this is working quite well as you can see in this anonymized merchant dashboard Bloomspot sent me today:

Bloomspot Merchant Dashboard

When customers are rewarded and their purchases are tracked, we would expect more profits for merchants. Okay, so not all merchants are created equal, but it comes back to the point I keep harping on: the key for merchants is to turn new customers into repeat customers by being AWESOME.

On average, Bloomspot members are now spending 2.6 times more than the certificate. For restaurants, that’s about $90 above the certificate, with tips around 20%. For spas and salons, average member spends a whopping $139 above the certificate, tipping around 20%.

Bloomspot’s demographic is reportedly more educated (over 75% hold college degrees, compared with less than 50% for both Groupon and LivingSocial) and more affluent (over twice as many with household income over $100k as Groupon and LivingSocial—source: RapLeaf). Plus the average pricepoint of Bloomspot deals is above $75, over double that of other sites.

With all that in mind, I see good things ahead for Bloomspot. What member doesn’t love rewards? And what business doesn’t love better ROI?

Will Google Offers use Google+ to shape the daily deals space?

It is rumored that Google’s new deals platform, called Google Offers, will be much more favorable to businesses concerned with not making any money on their daily deals. Instead of paying businesses just 50% of the revenue generated from their deal, Google will pay up to 80%, which should come as a relief to many businesses who either are too scared to give away most of their profit or haven’t figured out how to turn new customers into a repeat customers—the name of the game in my opinion.

But, before you go showering Google with all kinds of praise, look ahead for a minute. We heard Google Offers will likely evolve into a self-serve deal platform for businesses, and considering Google is the only player in town for Search, plus nearing the top on Display, I would expect to see Google create additional “exposure opportunities” for your business’s deal by allowing you to advertise it via PPC and Display ads.

Right there, they make a little more on their split.

I’m not saying Google won’t absorb most of the cost to advertise their own—they surely will if they want their offers to succeed. But it makes sense to allow businesses to dabble in their own advertising, if only to their own networks or Circles.

With Places, Maps, Google+, AdWords, Display, +1, and a famous self-serve approach to maintaining all those products, it is very interesting when I take stock of all the things Google has created and how they might all work together to connect consumers with businesses.

It has never been a better time to be an AdWords expert. But then again, I’m biased!

Businesses: The key to group deal success is your rebooking strategy

Here is a (positive) group deal case study:

My wife is a hair stylist who recently joined a well-established salon in a location where foot traffic is usually high. But with the recent economic slowdown and the closing of a nearby pharmacy, foot traffic was on the decline. So they called LivingSocial and put a deal together for “$25 for $50 of hair services”.

To really get the most out of their deal, I suggested they 1) prepare for the onslaught of calls, meager tips and fickle customers, and 2) more importantly, set a goal of rebooking every customer that walks in the door.

The deal sold 600 vouchers, my wife’s book is full for the next month, and the salon has managed to rebook 80% of new customers because of their rebooking strategy. This business really “gets” it, though I realize not every business does.

Much of the recent negative press on group deals stems from businesses not seeing the return customers they had hoped for. And to make matters worse, Groupon and others are promising numbers they cannot possibly deliver.

I would like to see marketers point out both positive and negative group buying experiences so we can learn from these and move on. Group deals are not going anywhere any time soon, as this daily deals forecast reports.

My advice to businesses looking to acquire new customers through group deals: get real with your expectations. And a word to Groupon: please don’t undercut yourself by promising metrics you cannot control.

Got any group deal case studies you’d like to share (positive or negative)? Leave a comment!

Ever run a deal on Groupon?

How bout Groupn clones? Let’s compare notes!

I have researched and/or spoken with many clones, and while they may all be group deal sites, each one has is own angle. Here are some positive notes:

Seize The Deal, for instance, focuses only on US mid-markets and relies on key partnerships with local radio stations to set them apart. So if you run in Albuquerque, you’ll be mentioned up to six times on local radio. If you run Oklahoma City, you will get a spot on local TV.

Living Social will take $1 off the voucher price if the customer Fans the business on Facebook. This is cool, though I’m not sure how they are able to track this.

Home Run has a virtual points system which rewards your for inviting others, sharing the deal, and buying.

Now on to my negative observations. I am amazed some sites do not take advantage of the persuasion principles that I think really define group deals. Groupon executes these very well, yet others seem to fall short.

Wow What Savings is a smaller player chooses not to show how many buyers have bought a deal. I understand why they do this. If only two have bought, you might not want to see that as a buyer. But to me, one of the most compelling factors is the Social Proof that is created when that 51st buyer tips the deal. 50 other people bough?! I gotta have it.

Other sites feature the same deal all month long. But where’s the Scarcity in that? What compels me to buy today?

Groupon still has the best writing, period. I do like it a lot. Sure, they can be a bit formulaic with their humor, but it is effective for getting me to like the deal. As Robert Cialdini explains, the principle of Liking follows that when you establish the problem and identify with the reader, he or she will like you. It’s that simple, and it works!

What about other principles of persuasion: Authority, Consistency, and Reciprocity? How do group buying sites play on these either successfully or unsuccessfully?