Small Business Service With Groupon

Groupon is enduring some well-deserved criticism this week for its edgy Super Bowl commercial featuring actor Timothy Hutton that made light of Tibet’s struggles with China.  American consumers overwhelmingly rejected the ad while continuing to use the service (herein called The GoDaddy Effect) and the company best known for being the startup that earlier spurned $6 billion of Google’s money created another head-scratching moment.

But what impact does this company have on a small business, maybe your small business, when one of those 50% offers launches?

Almost all Groupon customers ask for a second promotion according to a video on the company’s website.   Local merchants now receive mobile applications, free marketing copywriters and tools like a capacity planner. But business owners often go online to complain about margins or are cautioned about exceeding capacity and cutting into margin.   WebProNews did a splendid piece about Groupon tackling the capacity issue head-on and suggested that Groupon should be able to help a small business plan for lots of new customers.

Capacity was the issue I experienced with local merchants.  The worst was a camera store with an offer that swayed me to convert some old film to DVD .  My son picked up the order and paid with the Groupon, which was about $6 more than the cost.  The cashier did not offer a store credit or offer to sell a second conversion an apply a $6 credit.  Nearly half of the $15 savings evaporated so I called the store.

Pause and reflect.

Groupon brought me in when I wouldn’t have looked around for that old birthday party footage.  Then the store had a chance to wow me with their services anf pick up a second conversion plus who knows how many more future orders?

Instead the clerk said no.  The manager went further, telling me that “Not everything is free just because you have Groupon”.  Those frustrated line staff comments are common on web complaint boards.  But now I had a mission so I called the small chain’s headquarters and was told there was no customer service department and “these questions”  were best handled at the store level.  But now I was more focused on the store manager’s attitude and I ended up in the voice mail of someone in store operations.  That person never called back even after a second message was left.

So the fallout for the store is even worse.  Now I’m not only dissatisfied, but when someone comments on the DVD, I tell them to buy online because the local chain has “awful service”.

That is the essence of a merchant’s Groupon dilemma.  The company says all will be well if the merchant is “honest” about their ability to handle big volumes and convert casual consumers to long-term customers.  Your takeaway as a small business leader is to think strategically, not about cash flow or other tactical matters, when considering any coupon service. If you don’t have an upselling, customer-centric culture and your business has tight margins, inviting a horde of discount-loving customers who have no loyalty to your business is an ineffective strategy.

Source:  ”Groupon.com“, ComplaintsBoard.com, 1/26/2011
Source:  ”Hey, Ellen, Should We Do Groupon?” Restaurant Intelligence, 9/18/2009
Source: “Groupon Talks Managing Capacity…“, Web Pro News, 1/17/2011
Source: “Groupon Rejects $6 Billion Offer From Google“, MSNBC, 12/4/2010
Image:  Eugene Peretz via CC 2.0

Search Share Shrinks To Two

With respect to Ask (Dr. Pepper) and AOL (fruit juices), the duopoly created by the Microsoft/Yahoo search alliance makes U.S. search a tussle between Google and Microhoo for supremacy.

comScore’s August data was released tonight and shows a minor fluctuation with Google dropping 0.4 points in market share, which were seemingly picked up Yahoo and Microsoft. If anyone you know says 4/10ths of one percent feel free to heckle them for weeks until they conceded that the change was actually 0.6%.

In the soft drink world, Coke (40% plus market share), Pepsi (30% plus) and Dr. Pepper / Snapple (15% plus) effectively control the market. Except that the companies carving out a niche in the gaps often grow profitable or threaten to and are gobbled up.

That’s the payday Fuze and Odwallla hit when Coca-Cola bought them for a combined price of more than $400 million within a relatively short 6 year span.

Your takeaway as a small business leader is that you better decide whether you like Coke products, Pepsi products or both for your business. For you that means Google AdWords and Microsoft’s adCenter if you’re doing any kind of search advertising.

But there are new players out there. Bottled water (aka Facebook) is all the rage and smart companies are starting to see profitable direct response results from the social network.

And the comScore data also shows that Ask and AOL combined for 964 million searches in August. As a marketer I call that number “nearly one billion” and despite the manner in which we toss around large numbers, one billion of anything in one month is big business.

So have your Coke or your Pepsi or switch between the two.

Try some bottled water when it’s appropriate.

And if Dr. Pepper, 7-Up or fruit juices are on sale, you may want to stock up on some of those.

The comparison is overly simplistic, but the point is valid. Search advertising is now a Google-Bing world that will control more than 80% of US search engine actions this fall and winter. Other options exist, but they may not be direct substitutes.

Try them all. Don’t get in a rut.

US Search Engine Market Share

comScore Explicit Core Search Share Report*
August 2010 vs. July 2010
Total U.S. – Home/Work/University Locations
Source: comScore qSearch
Core Search Entity Explicit Core Search Share (%)
Jul-10 Aug-10 Point Change
Total Explicit Core Search 100.0% 100.0% N/A
Google Sites 65.8% 65.4% -0.4
Yahoo! Sites 17.1% 17.4% 0.3
Microsoft Sites 11.0% 11.1% 0.1
Ask Network 3.8% 3.8% 0.0
AOL LLC Network 2.3% 2.3% 0.0

Chart: comScore qSearch analysis

Delighted By A Doctor

If you can make a customer look this delighted, your business will enter hypergrowth

A doctor asked me to obtain a medical record from another doctor who had seen one of my children in 1997.  A toddler then, my son is about to enter his senior year in high school.

Leave the flowers and “blink of an eye” stuff to Father’s Day.  1997 was a long time ago.

First I had to find the doctor.  I found him practicing with someone else in another town.  He was on vacation when I called, but had private voice mail so I was able to detail the situation for him.

His follow up and his recall were the stuff of service legend.

His first call buzzed my office phone at 9 a.m. on Monday the day he returned.  I had started work, but had gone for coffee.  We played phone tag and he called me a second time before 10:30.

Vendors I pay lots of money to don’t follow up that fast.

“I don’t have easy access to records that old,” he told me, and I immediately began thinking about how I could meet the new doctor’s requirement.

Then the original doctor astonished me.

He told me where I had worked when he first saw my child.  It was a new job, he remembered, and I groaned because I must have really gone on a lot for him to remember that. Then he told me about my two other children.  He got their sexes and approximate ages correct. When he told me we had been house hunting, I almost accused him of having a chart there.

Nope.

He got a couple of facts close but wrong.  But he clearly remembered his patient from 13 years ago.  He placed my life in context then–something I hadn’t been able to do as well in the new situation.

And then he offered to write a letter describing his original impressions and confirming that he had treated my son. That letter arrived less than 3 days after we spoke.

He did all of this–the lightning fast phone calls, the letter writing–free. There is no hope for repeat business, little chance of a referral that far away and certainly little upside in making these return calls a priority on his first day back in the office.

Your takeaway as a small business leader is to consider what it would take to delight people so much they write a blog about you.

Our world continues a frantic pace of interconnected information.   What used to be called “user generated content” in the dark days of two years ago is now simply one of thousands of local review sites.

If you delight people, not just customers but anyone interacting with your business, your business will grow faster than any other way imaginable.

And you get to like what you do.  Because only people who love what they do can pull this off and not burn out before next Thursday.

This is more than word-of-mouth.  It’s delight.

Size Matters For YouTube

The axiom of recall and comprehension rising when more senses are engaged has a factual basis.    A Harvard Medical School publication urges subscribers to actively engage, stating “The more senses you use when you learn something, the more of your brain will be involved in retaining the memory.”

That’s one reason why YouTube clips go viral more than plain HTML pages.

You may read something you want to share, but when a video plays and engages you with video and sound, the effect is much more pronounced.  And experts say that’s what helps boost memory and retention.

Now YouTube has announced that the new limit for videos is 15 minutes.   Five extra minutes of video is huge.

Success stories surrounding video are all over the web.

A company selling $400 blenders for the home market made its case with a funny viral series and laughed all the way to the bank.

The debut album from an amateur singer pushing 50 years old outsold Lady Gaga and Rihanna on both sides of the ocean.

A teenage and her friends began uploading makeup videos.  Their tutorials go viral and a19 year old becomes Lancome’s video makeup artist.

Your takeaway as a small business leader is that you are probably not doing enough video outreach.   How-tos are big.  So is anything entertaining.  An entertaining how-to is a ticket for success.  Consider these examples:

  • A catering service could shoot video on how to frill up a table for an intimate dinner for two.  How do you get the napkins to do that?  What about the candles?  And, of course, the food.
  • A towing service might show a series of simulated roadside problems and how to deal with each.
  • A consultant can upload past talks that they’ve given to public audiences.
  • Any retail store can give product demonstrations of any merchandise.

We know that big television networks used pretty people, but YouTube has the been great democratizing force in video.  If you have something worthwhile to say, there’s an audience for you no matter what you look or sound like.

And now you have 5 minutes more to get your message across.

Are You Ready For Your Close-Up?

You, your customers or your business has a shot at being in a Kevin Macdonald film to premiere at this year’s Sundance Film Festival.   The film is being executive produced by Ridley Scott and sponsored by Google and electronics maker LG.

Called Life in a Day, the film will be a “cinematic experiment” to demonstrate what life in 2010 was like according to Google’s official film announcement last night.   Finding partners with better pedigree would have been harder.  Macdonald’s directing credits include The Last King of Scotland, and you’ve likely seen anywhere from a couple of pieces to much of Ridley Scott’s work, including Blade Runner, Gladiator, Alien and TV shows like The Good Wife and geek-police show Numb3rs.

Google’s plan for the film is brilliant.   Whip out your camera and start shooting video on July 24.    Upload the content to YouTube by July 31.  If any of your footage makes the film, you’re a co-director.  Even if you don’t make the film, you’ll be one of the kajillion entrants.

But this really could be a home run for your business.

Who knows what image the director is looking for?  Sure, there are 6 billion people out there, but how many do what you do?  Great.  Now how many are submitting a video?  And what if something magical–a twinkle in someone’s eye, an unexpected smile or frown, a small piece of daily living–exactly fits whatever thing the director is looking for right then?

You know the worst thing that happens?   You submit your video, don’t make the cut and have lots of footage for video on your site, television commercials and even a training video.  Video is not hard.  Editing video well is hard, but you pay someone to do that.

They don’t do what you do either.

You can find out more about the Life in a Day project at the Google blog or watch their nifty video below. Oops, I mean trailer. Welcome to Hollywood, baby.

Seasonality Also Means Events

If you’re an American small business leader, you can probably rattle off the major events impacting seasonality. Let’s try it together:

Don't rely on fireworks by others. Make your own.

January  - New Year, winter weather much of the country, Dr. King’s Birthday, post Christmas blahs

February – Valentine’s Day, President’s Day, still winter weather much of the country.

March – Spring is coming, pre-Easter and Passover for much of the country

April – Likely Easter and/or Passover, spring in full bloom

May –  Memorial Day, gateway to summer, Mother’s Day, college grads

and so on.  You know this drill.  There was a florist in our family, and I can tell you now, decades later, when those flowers were going to be flying out of that store.

But events make up seasonality just as much as the calendar, and you ignore their potential to your own detriment.

This idea comes hot on the hot on the heels of Hitwise’s Heather Doughty writing that Word Cup searches are starting to spike.  Of course they are, you grumble.  That sports thing is really big now.

But read Heather’s piece in its entirety and learn a couple of things about this event that apply to many similar events.   She writes that there are 68 different queries related to the word “schedule”.  There are also many queries related to the top 50 players.

How can you use this information?

Be imaginative.

You don’t need to run a sporting good store or bar to capitalize on this kind of intelligence.

If your website includes hours, include a World Cup schedule.  Better yet, include a World Cup schedule with some value added property like when games are on in your area and on what channel.

[quote]

If your site has anything to do with books, run the same schedule, but include nice beautiful links to books about the players.  Promise overnight shipping for nominal fees.  Would you rather have a lower margin customer on a sale and a new name on your house list or stick to your guns for $5.95 shipping?

Brainstorm the World Cup.  There are geography applications, television schedules (different from game schedules), cultural pride issues and countless others.

Your takeaway for today is that the World Cup is a huge global event and traffic surrounding that event impacts your seasonality perhaps more than the thermometer.  Think about the other events in the next two years just like we did with seasonality to start:

The Summer Olympics start in London in July 2012.  That’s just about 2 years.    It’s still too early to plan, but not too early to put on your seasonality calendar.  Start planning July 2011.

The Academy Award nominees are announced at the beginning of the calendar year and the show takes place in late winter.   Count on tens of millions of American viewers plus international audiences.    Figure out what applies to your business as we did the World Cup and start planning.  But remember that the event is when the focus happens.  Maybe you’re doing your own event in the buildup to to the event.

March Madness–the NCAA Men’s Basketball Tournament–should be on your calendar every year.  Bookend the festivities with St. Patrick’s Day and either spring or a religious holiday depending on your business.

Super Bowl Sunday is February 6, 2011.  Start before the NFL season.  Let your customers pick their favorite teams to go all the way and have a drawing based on who picks the game’s winners.  If you run a local business, the extensions are endless:  house cleaning, catering, babysitting, lawn care and appliance sales come immediately to mind.  There are dozens of others.

The issue here is not to say as one client recently told me that “This is our low season.”   Sure, there are seasons that are better, but by engaging in the world’s events, the water cooler events, you can catapult your small busines into relevance year ’round.

But these aren’t events that you should plan as they’re happening. Get them on your calendar now.  Buy a pizza or three and brainstorm later this week.

How can your business participate in four major events in the next 12 months?

Now what time does Greece open against Korea in the World Cup?

Exposure to Pharma Advertising Drives Patient Demand

Prescription medicine bottleSpeaking with some young entrepreneurs last week, I kept circling back to the point that thinking something was far different from knowing something. The issue for these really smart guys was how they could leverage smart analytics analysis to better understand their business.

Today, they are in thinking something mode.

Also today, I believed that big pharma DTCA (direct to consumer advertising) must have at least a branding impact because big pharma is great at two things:  marketing and its lobbying sibling.

I was in thinking something mode too.  Thanks to a study of DTCA pharma campaigns in the current issue of The Canadian Pharmacists Journal, I know at least one study that corroborates my assumption.  The work by Dr. Michelle van den Engh and pharmacist Lori Bonertz shows that exposure to advertising creates patients who ask more often for medications.’

Some numbers that jump out at me from their study:

  • Almost 40% of subjects had recall on at least 10 pharmaceutical ads in the past year.  Go ahead and test yourself now. Can you name ten? Twenty?  Even more?
  • The study was conducted in a remote Canadian area.
  • People under the age of 50 were more susceptible to pharma ads.
  • The “low exposure” group that had recall of less than 4 ads did not ask for any advertised medications by name or type during the study.
  • The “high exposure” group asked for medicine by name in 1.6% of cases.

Pause here.

Going from zero to a measurable percentage in anything is huge.  To put a number on the notion, there were about 157 million adults in the US between the ages of 18 and 55 in 2008.   If the 1.6% number in the Canadian study held for the US, the incremental number of people asking for a medicine by name grows to more than 2 million.

That’s worth some advertising spend, isn’t it?

The researchers’ biggest finding in my opinion is that low exposure individuals asked for a medication just under 5% of the time in the study.  Those in the high exposure group asked for a prescription medication 10.2% of the time –even if the medication wasn’t one they had seen advertised.

One important takeaway from the study is that pharama DTCA effort grew direct sales and the industry as a whole.  That number is big.   Simply advertising the category helps all boats rise together sometimes even if the payoff isn’t in direct sales.

Photo: Dani Simmonds

How Much Webmasters Make From Ads

coins with clock

Pennies and dimes add up over time

This morning’s announcement that websites keep 68 cents of every dollar spent when visitors click Google ads is the latest salvo in the company’s scramble to woo webmasters.    Google has a seemingly insurmountable lead in search.  We’ve written before that Google’s lead mirrors Microsoft’s software lead a decade ago and IBM’s hardware lead a decade before that.

Something will come along.  There’s already a shift led by Facebook which provides entertainment and Google which provides utility via search.   That’s not to say that Google is going anywhere… yet.   And I’m certainly not ready to proclaim this the Facebook Decade.

But Google VP Neil Mohan writing in what he calls the interest of transparency disclosed a number that has been hotly debated for years.  Even if the number isn’t exact or there are extenuating circumstances, one has to look at the intent behind the disclosure and ask what has changed.

The difference is the fragmentation in ancillary markets.   As a small business, you may choose to earn money on certain pages of your site (please don’t do this on your pre-sales pages!) with Google’s AdSense program.  As Mohan points out, you’ll get 68% of the earnings and if someone promises you 80%, how much more are you going to get from the trust created by the industry leader and its partner companies?

Mohan’s argument is compelling, and the number is important.  Because here is the math he hopes that you do:

Assume you have ads running on your website and that those ads generates $4.00  for every thousand pageviews.   Google’s announcement today would tell you that its advertising network receives $5.88 in advertising for those thousand views.   At 100,000 pageviews, the number is $588.  So if those pages are generating that much, couldn’t you just sell them for $600 at that level?

Sure.  But you can’t find a buyer at that level because you’re a small business and those 100,000 pageviews are your week or even your month.  That’s why there are other advertising networks:  AOL’s Advertising.com, Chitika (which works with Google and Yahoo!) and niche marketplaces like Glam Media.  In all, there are more than four dozen active ad networks.

Google’s announcement today of its revenue sharing percentages just may be the company’s recognition that this area of the business needs to be protected.

Mainstream Media Improves Online Ad Results

Not so fast in writing off mainstream media as you move your small business online.

The graying of Facebook can continue as it soars past 400 millions and its average age nearly doubles.  More than a million iPads can be sold in days as music and books continue to be consumed in digital formats.   Cable television can continue taking viewers away from network while I remain the only person in North America without a television show on a 4 month old fledgling network.

But consumers consistently prove how much mainstream media acts as a credibility enhancer for online advertising.

We had a wonderful opportunity to test this when one of the big three network’s local news operations ran a story on one of our clients in a major market.   The station is often known by a combination of its network and channel number.  Every ad we ran in every category had better CTRs and conversions no matter where we positioned the media outlet in the ad.

Think about Google AdWords for a minute.  With 70 characters in the body of most text ads, using even 5 or 10 characters is a big commitment.   But in every situation and in every market segment, doing that lifted performance.

Our long established baseline saw these changes

Network identified on line #1 – winner
Network on line #2 – 14% decrease
Station (channel) identified on line #1 – 17% decrease
Station (channel) identified on line #2 – 26% decrease
Baseline tested against credibility enhancer – 28% decrease

Because this is a service business and conversion is a function of the person answering the phone, the conversion rate remained stable as did the percentage of leads generated.  The biggest change was in the number of clicks, and with the conversion percentage remaining stable, this drove profitability.

There were some regional differences and one can read all sort of demographic influence in that data.  The bottom line, however, is that using a mainstream media story as a credibility enhancer for a small business beat our baseline in 9 straight tests.

Readership, viewership and listeners may continue their decline and fragmentation, but the power of a mainstream media brand can substantially change your small business’ profitability.   If you have been covered by local media, try testing that mention in your messaging.  If you haven’t yet received local coverage, work with a local agency to find the most newsworthy story in your business.  When I talk with media professionals, they tell me the issue often isn’t finding the story, but getting the business to agree to publicize the issue.   Stay on the good side of your clients, customers and partners, but work with a pro to get some coverage and another pro to advertise that coverage.

Google Analytics Improves AdWords Reporting

Google’s quest to be the one stop shop for anyone advertising online takes another leap forward today. That’s because the company announced robust reporting changes in Google Analytics that intuitively define how AdWords campaigns are performing.

Without running highly detailed analyses, you’ll be able to click through the Google console and essentially cross-tab different advertising dimensions. Everything from day parting to the URL in placement advertising is now available in Analytics’ easy to use drill-drown menus.

The enhancements look like Google’s best improvements to Analytics in a long time.  The AdWords information that has appeared in Analytics for a while now seems rudimentary.  These bells and whistles are shiny and loud.;

As always, there are a couple of caveats.   The feature is rolling out to accounts over several weeks.  You may not have it yet or even for a while (that’s okay, there’s a nifty video below).   And if you’re working on a closed platform (some of Yahoo and GoDaddy’s site builders come to mind), you’re not going to be able to sneak Analytics code on there.

And, of course, the functions work best with aut0-tagging turned on.  If you’re running your own few campaigns, auto-tagging might work best for you.  If you’re using a third party tool, maybe not.  But if you’re using a third party tool, that shouldn’t bother you, right?

This is a nice step forward for Google Analytics. I’ll always recommend someone using Google Analytics also use something that provides clickstream data, but this extra layer of data is going to make small business PPC a lot easier to manage on accounts that use primarily Google AdWords and track their site on Google Analytics.  I like this move a lot.