Deal Providers: Be in the Merchant business, not just the Deals business

Deal Providers: Be in the Merchant business, not just the Deals business

Although we do not write about Groupon all that much, they are and they do impact the industry…even in Canada. We would actually like to highlight one strategy that we believe Groupon is getting right and doing well at. A strategy that we have discussed before and have been championing for years throughout our network and interaction with the small business merchant community.

Over the past year, Groupon has acquired a number of companies. More importantly though, they have acquired several product features and functionality that enables them to become a service provider or a platform for small business merchants to rely on for years to come as opposed to simply being another service to promote a deal.

What Groupon is doing well, or rather, trying to accomplish is becoming an indispensable partner to the small business merchant; a technology partner and a marketing partner. They have understood that if they want merchants to continue to do business with Groupon, if they want to continue to have strong relationships with local merchants, then they must offer these same merchants a reason to have a relationship OTHER than a vehicle to promote deals. Promoting deals is not a full time relationship or revenue generator. However, providing merchants with crucial small business services or technology is. Groupon is striving to be both a merchant’s marketing partner and their key technology provider.

Here is what Groupon recently launched for their small business merchants:

  • A Calendaring solution. (acquired OPencal in 2011). This enables merchants with scheduling needs to easily adopt a scheduling system in their process for free. (salons, spas, professionals, etc)
  • Restaurant reservation solution. (Groupon recently acquired the popular Restaurant deals provider Savored.) Along with the purchase comes with Savored’s high profile restaurants plus Savored’s restaurant reservation system. Look for Groupon to launch that shortly and possibly compete with Opentable.
  • Restaurant POS system. Groupon also acquired the company called bread crumb pos. Look for Groupon to roll out this restaurant POS across the US and then other countries in order to further establish deep relationships with the restaurant industry.
  • Rewards Program: Yes, Groupon also launch a rewards program enabling merchants to leverage features to help with repeat business. This is something merchants could do on their own but it would not be as effective or as inexpensive as using the solution from Groupon.
  • Credit Card Payment system: In it’s latest attempt to have merchant’s fall in love with it, Groupon is entering the mobile payments space with its own offering, Groupon Payments. The service facilitates credit card transactions for small businesses but at cheaper rates. Does that makes sense? You bet it does! If they can save merchants 1-1.5% on their credit card fees over all, then merchants will flock to Groupon just for this reason alone. If they make it simple to register, to use and to understand, then Groupon will certainly be a top payment system on the market competing directly with Paypal, Intuit, Square among others.

 

This post is not really about Groupon. It is about all the other Deal providers that want to compete in this very crowded market. Deal providers are not just competing against other deal providers. They are competing against ALL other marketing and advertising vehicles that approach the local merchant. If you think about it, or even better, ask local merchants, they are approached by atleast a dozen or so advertising solutions in any given month, some as much as 20. Small business owners simply do not have the time for all this. One way of competing and making sure that local merchants are in attention is by offering them what most other advertising or marketing service don’t; and that is a true value add partner. Offer them more than a way to distribute deals and it will be a lot easier for them to say yes to your deal promotions.

What Groupon is attempting to do is certainly diversify their revenues from just deals to merchant services. More than that though, they are becoming a small business partner.

The point for Deal providers in Canada: Become a needed service for the local small business and they will never stop buying from you. Small businesses need a marketing and sales partner. They don’t need another advertising expense or another sales rep calling them from the 30 reps that are already calling them. If, however, you become their trusted marketing partner, their sales agency, their supplier of marketing technology or small business technology, then they will trust you, they will want to do business with you, they will NEED to do business with you.

For those deal sites that truly want to stand out, that wish to cement a long term relationship with merchants, simply offering them a Deals campaign is no longer going to be enough. Become their small business technology and marketing partner and you have created a customer (and revenue source) for life.

So what are the opportunities in Canada and which technologies or marketing services should you offer?

Well, the answers to these questions are certainly valuable ones. The answers really depends on who your customers presently are, or rather, you you want them to be. It also depends on whether you focus on a set of niche industries.

Restaurants have their unique requirements: online reservation systems, online menus, food ordering system, resource management systems, POS etc. The processes within the restaurant industry in any given city in Canada can certainly be improved. The biggest opportunity is probably in Montreal where French must be infused within the technology. Something that established competitors are just poor at doing. Groupon will probably not offer any French based services in Quebec as described above for a while.

Spas and salons: A major focus here is on scheduling and product sales. Every single Salon should be using a scheduling system. If they are running a daily deal, then having the customer book their appointment immediately with purchase on the daily deal site will significantly reduce returns, customer service issues and charge backs.

Professional services: Scheduling is also key. How many times have customers tried to make an appointment and then just cancel their purchase simply because they could not reach the merchant. Essentially I urge every Daily Deal provider in Canada to have a scheduling system in place for professional service deals. There are many scheduling solutions available, some even available in French and other languages. Have a look at Setster. We highlight them because they have an API making more easier integration. Having a scheduling system will save the Deal provider money and offering it to their merchants (perhaps for free) will build a favourable relationship with said merchant.

All merchants: Many merchants, especially small ones, professional services, travel, restaurants, etc simply do not have any online presence at all or a very poor one. A nice online experience significantly impacts how consumers feel about a merchant and increases the buy rate of any deal promoted on the daily deal site. There are several ways to help merchants with their online presence.

 

Now, the larger sites in Canada; Teambuy, Wagjag, Tuango, or Dealfind can easily adopt some of this strategy and truly have it pay dividends. Some are actually working on a few scenarios. However, all the other deal sites across Canada should take a hard look at this strategy and determine how they can approach it. Doing so will help them compete with more power as opposed to competing as a commodity.

Bottom line: Provide merchants with tools and services they can use to help with their marketing, sales and operational challenges.