The Butcher, The Baker, and The Coupon Maker
Here’s a scenario you might be familiar with: Small business owner runs a daily deal. It’s some ungodly percent off your favorite indulgence - cupcakes, spa treatments, or my personal favorite - booze (sorry, Mom). You buy the maximum number available - maybe even use your old hotmail address from high school to buy a couple more than you’re supposed to - and then happily gorge on baked treats, lounge on massage tables, or assail your liver for 75% or more off the normal price.
But did you ever think about what’s going on behind the scenes?
Act 1: The Butcher. The Butchers in Toronto had run some deals before. Realizing they could still drum up customers without completely destroying their margins by tightening up the terms of their deal, they ran a $400 worth of meat for $99 deal that turned heads - and opened wallets. Customers who bought the deal either failed to read the fine print or couldn’t get over the fact that 76% off came with a few caveats and balked at all the restrictions that started affecting their ability to redeem the deal however they pleased. 9 months later, after closing their doors, trying to reorganize their business and recoup from the customer fall out, The Butchers in Toronto are still struggling to get back on their feet after the capacity and customer service nightmare brought upon them by the daily dealers.
Act 2: The Baker. Twas a foggy day in jolly old London, England when Rachel Brown ran a daily deal for her bakery. 12 cupcakes that normally go for $40 dollars selling at $10 - what a steal! She and her baker-mates watched with bated breath as the first few hundred sold, relieved that their offer was appealing at least to some. But bated breath turned into big anxiety when a few hundred turned into a few thousand, finally tallying at about 8,500 sold. For the arithmetically challenged, that means Rachel was on the hook for 102,000 cupcakes. Having to hire extra staff to meet the capacity requirements on top of the huge discount means Rachel lost $3 per batch, or over $20,000. Rachel has said she will never be running another daily deal, and hopes to keep her business afloat despite the nearly crippling disruption.
Act 3: The Coupon Maker. Situations like these have caused boatloads of bad press for the coupon makers on both sides of the pond. Since the coupon makers collect and disburse payments through their site, cashflow and capacity never become problematic on their end. A spokesperson for the coupon maker said there was no limit to the number of vouchers that could be sold and that they “approach each business with a tailored, individual approach based on the prior history of similar deals.” Ouch - no sympathy? This play looks like a tragedy; and tragedies, while entertaining, just aren’t my cup of tea...but wait!...a fourth act!
Act 4: A Hero Comes Along. Not from camelot, NBC primetime, or a sandwich shop, but from the one and only Brew City. Translated from Algonquin, it means “the good land” - Milwaukee, Wisconsin. Unlike competitors, Offermation is a new solution that puts control over deal making in the hands of the business owner with a system we’ve created that allows cost and capacity to be predictable and manageable. Customers can feel good about supporting a local business when they buy and share Offers, therefore helping their community, as opposed to beating the local business because they got in to try it once with their ungodly discount and got out (with no intention of returning) before the place started suffering capacity problems, stopped honoring discounts, or went out of business. Offermation is geared towards attracting loyal customers who love their local businesses, and business owners now have a way to reward loyalty and word-of-mouth advertising by members of the community, creating a virtuous and self-sustaining cycle.
The End? Hardly. We’re still working every day to reach business owners so we can let them know that there’s a better solution to driving local customers. If you want to help us spread the word, shoot us a line or comment below and we’ll let you know how you can be rewarded when you help a local business by introducing them to Offermation! If you happen to live in Milwaukee, let me know and I’ll buy you a beer and we can talk it over.