There's a story on USA Today's website about how Facebook is on a mission to help small businesses worldwide. "Next week," the article reports, "Facebook will unveil a plan to get small businesses hooked. The company plans to offer free $50 advertising credits for up to 200,000 small businesses. When a person clicks on an ad, there's a set rate predetermined for that click through - 5 cents or 25 cents, for example - the advertiser has to pay. Facebook will pick up the tab for the first $50 of such ads delivered under its offer."
The best thing about the story is the reader comments it provoked:
- "Who clicks on ads except by mistake. If you want something, shouldn't you just use the search engine?" Good point. I can't remember ever, ever clicking on an ad. Do you click on web ads?
- "Wow, a whole $50 credit -- that will cover enough clicks for about one day -- how generous of them. I own a small business and it would NOT be enough to make me try it. More like a token gesture that at least got them some free publicity and a story on here I guess!" I tried Facebook advertising for my catering company, and the costs add up fast. I could never trace any business directly or indirectly to Facebook (or Google when I used its pay-per-click advertising model -- at $2+ per click). About half my business comes from repeat customers and referrals and the other half comes from people searching Google and finding my business. So again, good point made by the commenter.
- "What ads are they talking about? I never see any ads. Anywhere." Well, I certainly notice the ads on Facebook, but I don't click on them because it makes me think, "Ah, now Facebook is going to bombard me with similar ads and I'm really not all that interested in this one anyway."
So, if you're a small business, how do you get your marketing message out to the world without handing over your money to Facebook or Google. What about Groupon, where you can make an offer to drive retail traffic to your store by giving a loss-leader deal? It's appealing because you only pay if Groupon generates enough signups to trigger the offer. You can even make your offer time-specific, so if that sushi is getting green by 3pm, you can make your 50% off offer redeemable from 3-4pm. Yum.
But here's my problem with Groupon. Isn't it training customers to look for a deal? If you're a florist, well, there are other florists. You may get customers into the store with a loss-leader, but will they just go around the corner or web-buy from 800-Flowers next time. Then what did you accomplish?
If you're a Groupon user, it feels a little like crack (not that I know what crack feels like).
I want a deal. I am playing the Groupon casino to see if I get it. I got it! Adrenaline rush! I don't really want that artisinal olive oil, but it felt really good to win it. Now I have to chase the Groupon dragon and get that deal feeling again. How about a Bikram yoga session? Sure, anything!
I'm sure Groupon works for many small businesses, and you can't get hurt too badly by trying it. But small businesses are often looking for the next shiny object/silver marketing bullet to solve their new customer acquisition problem. Maybe some other, more boring, tactics can work better. Like:
- Make customers your extended sales force: In my catering business, after we do a job for a consumer, we send them three postage-paid postcards to send to their friends to tell them about how great we were, and we offer a $100 coupon. Now, some people want to use that $100 for their next job with us. But that's fine, too. (I got this tip from John Jantsch in his excellent book, The Referral Engine. He has a ton more -- check it out.)
- Try in-store promotions: If you're a retailer, the best time to secure a future purchase is when the customer is in front of you. Anytime you don't make an offer for an up-sell or for a next purchase is a wasted opportunity that has a real cost. If you own a gift shop and you don't chat up the customer to find out what other people she's going to be shopping for soon, you may as well plunk down a grand in the Facebook casino.
- Accept nothing less than 100% customer satisfaction: A long-time customer of mine last week had a less-than-perfect experience with us. My crew was held up in traffic and therefore started serving late. Then, because of a miscommunication on my end, they stopped serving a half-hour too soon. As I always do, I contacted the customer right after the job to ask how it went, and heard the story. She said she felt she should not pay the full amount, even though everyone enjoyed our service and we served everyone at the event. I told her, "Not only should you not pay the full amount, but I'll give you a choice: don't pay anything at all, or pay this time and receive the next event completely free." The customer was shocked (in a good way) by my offer. I explained that out of literally thousands of jobs in nearly 10 years in business, this situation had happened exactly four times; she didn't sign up for "pretty good" service. She expected great, because that's what we've always delivered in the past.
- Email is old-fashioned but it works (and so does text messaging): When you make a sale, try hard to get customers to opt in to you email list or for text message promotions. I use Constant Contact for email blasts on a regular basis. It's fascinating to send out a promotion and then be able to see who opens it...some people open the same email dozens of times. Those are the ones you call, casually saying, "Hi, I'm just calling to follow up on the email promotion we sent you." This technique works.