A growing trend shows that consumers are using deal and coupons sites to help them save money and find businesses. The number of such sites is increasing at an alarming rate. With the offer to save money and read reviews about a company who wouldn’t?
So here are a few of the major deal style websites that consumers use when looking for a moving company
Groupon.com — Groupon is a deal-of-the-day website that features discounted gift certificates usable at local or national companies
Living Social — Living social is similar to Groupon it’s billed as an online and mobile service for group or crowd sourced discounts.
Tippr.com — is another know company that has some of the same offerings
I would have to agree with most experts and say that using these different types of companies can certainly increase your business.
Things to watch out for.
Groupon, LivingSocial, and other deal sites aren’t all they’re cracked up to be for some businesses.
Here are some questions you should ask yourself.
- Can you handle the large volume of work?
- If you get 200 calls in one day what will you do?
- Do you have your sales people in place to handle the swarm of calls or emails?
- Do you have enough truck and staff to make the moves?
- Most importantly, Can you afford it?
The Economics of a Deal Site
Keep in mind you are going to take a hit on profit margins tied to any sales you rack up via the service, as you have to offer at least a 50 percent discount from the normal price and filter another 25 percent to deal site in order to be considered for their site.
They do this by charging the client a share or percentage of the sale price. Often it can be up to 50% of the sale. For example, if you are selling a service for $50 they might charge you $25. So if a service is being offered at $50 instead of $100 and you have to pay Groupon $25 you are left with only $25 at the end. Not much is left over to pay your movers, staff, overhead, etc. In fact you have lost money. Guaranteed.
For many companies such as restaurants they know they can make money via backend sales, such as ordering something from the menu not part of deal, or bring friends along. That’s how they make it work. What can you up sell them on?
Damaged Reputation
The most valuable marketing source for a moving company is their referrals and reputation. You put that all on the line if you can’t handle the sudden and temporary growth that a deal site will bring.
How to make it work
One way that moving companies have seen success is to use hourly pricing and discount first two hours with additional hours being at regular price. You are also well off to add terms that give them a limit to your least busy days of the week, and for a short window of time.
Another way is to offer the deal on a secondary service such as Storage. Save 50% on your monthly storage when you move in with us.
In the end online deal sites are structured to be good for them and their users. They expect you to figure out how to make it profitable given their rules. So be careful and make sure it’s a profitable marketing effort.
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