What is the deal Sonoma?
What is the deal Sonoma?
By Paul Rattay
If you are a bargain hunter, it's hard to ignore the offers being made by daily deal sites like Groupon. If you are like me, you learned about Groupon during the media buzzfest which stemmed from rumors that Google was offering to buy them for a large multi-billion dollar offer. Even more buzz was created when Groupon declined the offer, followed by Wall Street chatter about revenues, market caps and rumors of an IPO. Groupon members are sent a daily email that offers heavily discounted services or products from local merchants valid for a window of time designated by the deal (e.g. six months). Members that buy into the deal are able to redeem the voucher much like a coupon or gift card.
Now some of you may know this, but if you didn't, Groupon isn't the only daily deal site out there. It is however reputed to be the biggest, but there is a growing number of similarly styled offerings. Some deal in general goods and services while others are vertically specific, like Sonoma-based Invino.com, which offers discounts on some of the very best wines from Sonoma & Napa. Another Sonoma daily deal site is Kingdom59.com, which offers discounts on brand-name golf equipment and accessories. The list of daily deal sites is growing and new concepts, like sites that aggregate across many daily deal sites, are popping up to get in on the action.
So I decided to take a closer look from a consumer standpoint and as a small business owner. I performed a quick review of the top sites that offered deals for service-oriented companies which narrowed the list considerably. I scoured site information that suggested the top three that would apply to my business were: 1) Groupon 2) Living Social 3) Dealster 4) Social Buy. I reviewed each closely and eliminated Dealster and Social Buy from my list because neither served the Wine Country Region.
I then promptly signed up for both Groupon and Living Social and began to follow the daily deals that were being offered to our community by our community. Each day I received an email with an offer of goods and services at 50 - 75% discount. From a consumer standpoint, it was hard to tell the two apart. They both send you daily discounted deals from towns across Napa and Sonoma County. Each of them offers credits to consumers for customer referrals which is where I found some subtle differences. Groupon offers $10 when someone you invite buys their first Groupon offer. Living Social offers $5 for the same referral, but also adds a bonus offer to members that buy a deal: Living Social will make your deal free if three of your friends buy into the same deal. With all that said, I found both sites equally compelling and relevant from a consumer point of view.
I then switched hats to see what the top two deal sites could do for my small local business. I completed an online merchant application with both Groupon and Living Social. A few days later I received a phone call from a Living Social representative that lived in Sonoma County who wanted to set up a time to speak to me about my business goals and about Living Social. I made an appointment to speak to her later in the week. The very next day, I received an email from Groupon which read like a Dear John Letter. It wasn't the denial that bugged me so much as the method, the reason and the sheer contrast in experience from that of Living Social. The email was clearly an auto-generated template from a CRM application like the ones that banks use to let you know you aren't getting a credit card for the reasons bulleted below. The reason stated in the message was that I didn't have enough Yelp and Google reviews and could very well have been sent by a robot. Now I don't want to minimize the importance of having a web presence, however from a small business point of view, particularly one that launched recently in a rural area, I felt that this reasoning was preventative to small and local businesses that are new or still learning about the use of new & social media. I included this remark in a brief email response to the sender and immediately received another template response letting me know that my open ticket number was #3644210 confirming my earlier theory about robots. Three weeks later, no human response received from Groupon.
My experience with Living Social was very different. They seemed to grasp from the very start that speaking to me was not about a profile page on Yelp or Google, but rather about building a local presence for local businesses to local consumers. My local representative who offered to meet me for coffee since she lives about 20 miles from me knew how many 'Likes' my facebook page had, she knew where my work had been published, she had read my blog and could tell me which photo she liked best on my site. Best of all, three weeks later, I have an upcoming deal with Living Social!
Now I don't know that this is the best thing ever for my business, but I do know that small businesses particularly ones in rural areas need to determine how to make best use of new and social media. And at the very least, whether the deal sells out or not, my business and my brand gets marketed to tens of thousands of local subscribers and hundreds of thousands of regional subscribers - not too shabby. Its possible that my experience with Groupon was simply a merchants view of a company suffering from its own hype and success. I may never know, but if you look historically at companies that have a sustained record of success (eg. Target, Apple, IBM, GE), marketing prowess paired with efficiency in distribution is a key quality.
Between the media buzz and the many choices, it's not surprising to find many consumers and business owners confused about what daily deal sites mean to them. The industry experts are split between the "half fulls" saying these sites are here to stay and the "half empties" saying they are the next tech bubble to burst. Putting on my product manager hat, I see a new paradigm for retail goods and services not unlike when Amazon first appeared on the horizon in 1995. Whether these sites compete with or complement e-tailers is yet to be determined. The daily deal isn't a new concept but the use of data, technology and social media to target market and sell goods and services is poised to be a fundamental change for retailers and the ability to influence local buying decisions through social media is a marketers holy grail.
Paul Rattay is a photographer, a technology business consultant and a cheloniaphile (one who cares for and is concerned for the conservation status of turtles and tortoises). Paul blogs about lifestyle, photography & technology on his site, The Social Turtle.