How local business owners should use group buying sites

Local business owners get lots of people calling them to sell them advertising. If you are a CityVoter business, chances are you operate your business in a city where "group buying" advertising companies are growing quickly. There are really a lot of these companies out there. I chose to highlight a few above for your reference. They are: GroupOn, BuyWithMe, and LivingSocial. My goal is to give you a simple overview of how they work, but it's not that simple for business owners who aren't familiar with the opportunity. If you're interested in doing one of these deals, be sure to spend a lot of time on the phone with the sales rep so you fully understand what you're signing up for.

Here's how group buying deals are designed to work for businesses.

1) A sales rep will call you and ask you if you want to create a fantastic deal to drive customers to your business.

2) If you say yes, they will guide you through creating a really compelling offer. This is not a coupon, it's a one-time ridiculous deal...like half off a service or a buy one get one free or a new customers free. Think "free" or "half off". For example, lots of spas give 50% off spa services. Dentists charge only $5 for all new customers.

3) The group buying site will negotiate with you a cut of the deal. These sites make money on the "spread". For example, if you normally charge $200 for a new patient office visit and the deal you set with BuyWithMe is $50 for a limited time only. BuyWithMe will take a % of the $150.

4) You will also work with the sales rep to determine how many people are allowed to take advantage of this deal and when it is available. Once you know what the deal is, you'll have a better sense of how much this promotion will cost you. Since it costs you no cash up front, you'll need to think about how many deals your business can afford to offer.

5) Finally, the group buying site runs "deals of the day". They will email thousands of local consumers the day you want your deal to run. They will collect payment and advertise your deal on other sites. If it sells out, they will process consumers payment.

Advice:
1) These companies all vary in size and they all need to grow fast to keep consumers interested in their deals. You can negotiate and you should.

2) These are promotions. Think of these as promotional dollars. Use them WHEN it is appropriate for you business, not just when a sales person calls. Is back to school a good time? Is the New Year? Mother's day?

3) Create your own email list. These businesses solve a problem for a lot of businesses who cannot direct market to their own customers because they don't have their customers' email addresses. Collect your customers' email addresses. They can be a great source of new business. Offer them a ridiculous deal for referring new customers. You can afford to do this more often.

4) Use CityVoter free "Insider Deals" when you're not using group buying promotions. We want you to be able to offer deals all year that help grow your business. CityVoter's Insider Deals are a great way to promote your business. If you need extra promotion, check out GroupOn and the companies above.

An Esquire Magazine That Talks? That's just crazy.

In 2005, I called on Boston Magazine repeatedly and tried to convince them that their magazine needed to not only go online with more content, but become part of the local conversation by engaging consumers to contribute their voice to the publication. The web could make that happen.

As we approach the dawn of 2010, we see Esquire making big noise about their new interactive magazine. The cover actually reads: "A living, breathing, moving, talking, magazine?" "WTF?!"
If I were publishing Esquire, I wouldn't say WTF. I would say "hold on we're just getting started", and I'd release a flurry of new ways to engage my readers and get their feedback. They seem to have surprised themselves. In the age of social media, their audience and advertisers expect this and more. It's not augmented reality, it's media's new reality.

Hats off to King5 and Best of Western Washington

Last night, our media partner in the greater Seattle area, King 5, began announcing their 2009 Best of Western Washington (BOWW) winners during their Evening Magazine television program. King 5 is using CityVoter to make its BOWW annual promotion bigger, and this year it was simply huge. More than 300,000 unique visitors visited the King 5/CityVoter BOWW website in a 6 week period. These visitors spent an average of more than 6 minutes on the website browsing local businesses, voting for their favorites, and recommending places. In fact, the site accumulated more than 90,000 recommendations from voters in just 6 weeks.
This is enormous free promotion for local businesses at a time when they need it most. We very proud to be part of this success, and we're grateful that King 5 has the vision to integrate this program with its core programming. It is a best practice.

We've got a lot of exciting changes coming to CityVoter shortly. New ways to make our best of programs even better. King 5's success is a great motivation for us. It is clear local communities love this promotion and really get involved. Awareness is key, and there is still no better megaphone than local TV.

Rating Points? Local Media Means Local Engagement

I talk and write a lot about how "local" is about brand and connection to a community. We've been fortunate enough to work in some cities now for more than 3 years, and we've built impressive brands in places like Sacramento, Denver, and Detroit. "A-List" signs are in windows around the city, and people know to vote every year.

Our media partners are starting to really benefit from the investment they've made in developing new brands and advertising products in their markets. Recently, we had one partner tell us "out of the more than 50 vendors I've seen this year, [CityVoter's Best Of] is one of the best opportunities I've come across." This is a city that has made more than $300K from our "best of" program.

We have also seen the fruits of McGraw-Hill's local brand start to play out in their markets. For more than 3 years now, they've been collecting votes for their A-list and running fun promos like this.
Now, they've capitalized on this brand to help promote local businesses with a new kind of advertising product. This is a great way for them to diversify their dependence on national advertisers as well as help local businesses develop new online videos that can drive business through new channels like search engines and YouTube. Read more about their approach here.

Local business contests do have winners

I am not a big fan of hearing about contests, joining, and then never finding out who won (because I never do). A couple of weeks ago, we announced a contest Office Depot was running to help local business owners. As part of the prize for submitting a winning video, business owners would receive thousands of dollars worth of prizes. Sounded great, so we told all our local CityVoter business owners about the opportunity. A few weeks later, I got a very nice email from Absolute Abstract in Philadelphia telling us they won a prize worth $2000 from Office Depot. Very cool.


We also announced another contest in Dallas where CityVoter was giving away iphone gift certificates to consumers and businesses who downloaded our new "best of" city app. Today, I sent out winners' announcements, and I'm very happy to congratulate Circle Park Bridal in Dallas. They had the most number of customers download the app and email us on their behalf.

While it's fun to compete, not fun to lose, I hope it is at least a little nice to know these contests do have real winners and they're local business owners just like you. See Circle Park's Banner to the right. More fun stuff to come...

More local email newsletters at CityVoter

Once we finish voting in a city, we give businesses who competed a chance to reach back out to voters with special offers to thank them for their loyalty. We've been doing this now for years, and a number of business owners are getting the hang of email marketing.

Many business owners sign up for Constant Contact each month so they can begin their own dedicated email marketing. If a business owner doesn't have an email marketing list, we help them create one with product giveaways, but also with dedicated emails to local consumers.

How well do they work? Open rates of hover around 20% and CTRs are above 3%. Since these are consumers who live in the area and who have voted on CityVoter, the engagement stays consistently high until voting begins again.

Here is one of my recent favorites: 20% off a Studio City Tattoo in LA "doesn't hurt a bit". Classic.

This holiday season and catalogs

The Wall Street Journal today posted a story about how retailers continue to rely on unsolicited paper catalogs to drive sales. This is a very important observation for us at CityVoter since catalogs are local, measurable, and image based. They also tend to be themed for geography and season.

As the article points out, catalogs are a huge environmental issue and will likely start to weigh on consumer sentiment and perception of brands. I live in hippyville Cambridge, and as a result, I have already have begun to actively block catalogs sent to my house by using: http://www.catalogchoice.org.

Smart brands and web marketers will migrate some of these direct marketing techniques online and use social media to help. We see this as our local opportunity as catalogs tend to intersect in usage and demo with glossy city mags.