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Many businesses and retailers are evaluating one-day discount coupon services like Groupon and Living Social to figure out whether they make sense to include in their overall marketing strategy.

Like any marketing effort, there are pros and cons.  And with the coupon services, there are many factors to consider and small business owners should not make a decision blindly without doing their research on the financial metrics or consulting with an experienced marketing professional. 

Discounting your products or services can wreak havoc on your brand image as well as to cut into profit you may already receive from current customers, thereby devaluing your brand over time.  On the flip side, taking advantage of these collective-buying-power coupons may get you an infusion of cash that your business sorely needs.  With any marketing effort there is risk but there’s also the chance that the potential benefits far outweigh the risk.  Bottom line is that you need to weigh all the facts in order to make a decision of whether utilizing discount couponing is right for your small business.

There’s a great article that appeared recently in the New York Times about “Is Groupon Good for Small Business?”  And yet another that appeared in Inc. Magazine about “How Groupon Can Boost Your Company’s Exposure.”  It is important to do the math and compare with other marketing efforts. 

Equally, it is important to realize how consumer buying habits have changed, mainly due to our sluggish economy and also to advances in technology brought on by social media, smart phones and iPads. If you’re still spending gobs of money on yellow pages advertising, then you might want to rethink that strategy. 

Here’s how 1-day discount coupon services like Groupon work for the consumer:

Click here to view the embedded video.

How should the business owner view these direct response offers?

These discount coupon offers should be utilized as part of a business’s overall acquisition marketing effort and businesses should understand the metrics behind how much it costs them to acquire a customer based on all the other similar efforts they have tried.  In addition, the coupon offers could activate previous customers to purchase again so that you can increase share-of-wallet.  Ideally, you don’t want all your Groupon or Living Social business to come from current customers, as there are better ways to reach them to thank them or give them offers such as email marketing, text message marketing or simply the old-fashioned personal phone call.

The small business owner also has to understand and plan for various scenarios:

1. If you run a coupon offer and the minimum quantity is not met, there is no charge to the small business or retailer.  But there are benefits and perhaps residual business just because of generating awareness and ad impressions of your business name.  There’s no downside if this were to happen and, for anyone who has run a traditional tv, radio or print campaign, you know there is value in that piece alone.  Be sure to find out how many people are on the Groupon or Living Social email list for your market beforehand, so you know how many total unique impressions are possible.
2. If you run a coupon offer and the minimum quantity is met, then that’s where the charges kick in.  First, there is the fact that you’ve developed a deeply discounted offer.  Second, you will pay a large fee to the discount coupon service – we’ve heard the fees can range from 20-50%.  You can try to negotiate that fee but small businesses aren’t as likely to be able to make much headway there unless they can demonstrate the potential for large sales volume.  Third, there may be credit card fees.  And fourth, if you’re selling product versus services, you have the cost of the product so be sure to negotiate a better price with your supplier before you run the daily deal – get the supplier’s buy-in.  Understand that you may take a hit on profitability in order to gain X amount of new customers.
3. Be ready for a deluge.  We’ve heard that many times the business got more coupon purchases than they could handle effectively and this caused many problems for them.  While getting a slew of new customers is a very good problem to have, be sure that operationally you have instituted a back-up plan if this were to happen.  If you’re concerned, be sure to set a cap on the number of coupons that can be purchased and carefully write any exclusions to the deal in the fine print.

In addition, the small business owner has to understand that they won’t receive 100% redemption of the coupon deal.  The reports we’ve been hearing is that redemption rates runs 80-95%.  This, interestingly, helps your profitability in a good (but odd) way so keep this in mind as yet another metric that has to be part of the mix.  It is important to measure every aspect including coupon redemption rates.

We’re very concerned about helping our clients protect the value of their brand and ensuring that offering an occasional deep discount doesn’t devalue the brand’s equity as so often that can happen.  If you test a coupon offer and find that discount coupons work for you – or they have potential to work for you, be careful about running them too often.  Once or twice a year – Spring and Fall – might be enough. 

So figure out what is optimal frequency for your type of business without having negative impacts that damage your brand.  The last thing you want is for customers to frequent your establishment or online business only when there is a discounted deal.  But even long-time customers appreciate that once in a while, and they often think of it as an extra-special thank-you for their repeated business over the years.

Lastly, if the discount coupon does brings in a lot of new customers to your retail establishment or online business which would be the best-case scenario, don’t think that it stops there.  Just like any other acquisition marketing effort, it must be immediately followed with a customer retention and upsell/cross-sell strategy. 

It doesn’t make much sense to put a bunch of new people

 in the bucket if you’ve got big holes in the bottom, does it? 

So add them to your customer database and treat these new customers as if they have been a customer for a long time. 

Anyone hear of Carl Sewell?  The then Cadillac dealer who wrote a book about Customers for Life?  He treated every customer as if they had spent $300,000.  Because that was, back then, the average amount one customer would spend with his dealership during their lifetime.  I’m sure it’s way more now – he has multiple dealerships and runs them with high customer service to this day.

So if you test a Groupon or Living Social discount coupon and it seems like a lost leader initially, be sure to ask yourself what you are doing to upsell or cross-sell those new customers or to encourage repeat business next week, next month or next year.  If you don’t have those things in place, you’re likely to have these new customers come in for a cup of coffee, but never buy a latte, a Frappuccino, a bag of coffee beans or a scone.  I mean, really, when was the last time you walked in to a Starbucks and simply bought a cup of black coffee and walked out?  Very few people do that!

The bottom line?  Use one of the most fundamental principles in direct marketing:  test, test, test.  Plan effectively, set up metrics, and use what you learned to make the offer better next time. 

And you might just have to be prepared to hire staff, which would be a very positive thing considering our present economic situation.

Related articles:

• LivingSocial Success Story (degashouse.com)
• Sold Out: A Groupon Success Story (trilixgroup.com)
• When a Groupon Promotion Went Wrong (entrepreneur.com)
• Bing Announces Deals (bing.com)
• Some Retailers Eat Losses via Discount Sites (businessweek.com)
• Groupon, LivingSocial offering bigger coupons (sfgate.com)
• Should My Business Be Running Deals on Groupon? (blogs.constantcontact.com)
• For coupon overreachers, a chance to recoup (boston.com)
• How Amazon Could Shake Up the e-Coupon Market (dailyfinance.com)
• Why Groupon Sucks (zacharyadamcohen.com)
• As Daily Deals Go National, Will They Get Less Generous? (mint.com)
• Groupon coming to cash registers as coupons get technical (slashgear.com)
• Gowalla to Launch “Groupon or Living Social-type” Rewards at SXSW (fastcompany.com)
• Quite A Deal: ‘Groupons’ to Earn $4B by 2015 (clickz.com)
• How to Plan and Execute a Successful Deal on Groupon (blogs.constantcontact.com)
• Billion Dollar Market Forming Around Groupons People Wish They Hadn’t Bought (businessinsider.com)

If you own a small business, then you are aware that people often buy your services or products based on the relationship they have with you — the small business owner — or with your new business development manager or other key team members on your staff.

That is why building your own personal brand — along side your business brand — it so important.  I have to remind business owners all the time:  people buy from people, not companies.  Personal branding adds another layer — an effective layer — to building your company’s brand.

There are plenty of exceptional blog posts about how small businesses can benefit from integrating personal branding into their overall marketing strategy.  There’s a great post on Small Business Trends that talks about how you can become a trusted expert and be more memorable that way.

But the article doesn’t cover a few other important tactics that you should be sure to incorporated into your personal branding strategy such as:

1)  Protect your name on the internet.  Go to GoDaddy.com and see if the domain name for your own personal name is available.  If you have a name that is unusual, like mine, chances are it is available.  If you have a more common name like John Smith, you’re going to have more difficulty but you can try combinations with your middle name, a nick name or even using words in front or after such as “thejohnsmith.com” or “johnsmithonline.”  Eventually, you may want to build a more extensive website — but initially you can “park” the domain name, add a free one-page site, or even a simple 5-page site.   Keep in mind that it’s very easy and inexpensive these days to build a simple site on your domain with WordPress (with or without a blog) so be sure to check in to that.

2)  Complete your LinkedIn Profile.  Be sure you have an active LinkedIn account that you not only keep up-to-date but that has a completed profile and that you periodically update your status.    If you need more info, just go to the LinkedIn Learning Center.  I addition, be sure to create your company page to LinkedIn.  Also, if you are a Microsoft Outlook user, you might want to dowload Xobni (inbox spelled backwards) to help you increase your LinkedIn connections without ever leaving Outlook.  Remember that you can upload a database (if you have one) of your contacts and/or you can download your LinkedIn contacts and add them to your email marketing database, if you use one.

3)  Network in your Community or Industry.  Most small business owners know the value of one-on-one networking to make connections and to get referrals.  Building deeper relationships with people in your community and industry pays off in the long run.  Just remember to do the proper follow-up (connect on LinkedIn, send follow-up email or call, etc.) so that the people you meet remember you and the value you add to them and their business.  Very few people incorporate a good follow-up program when networking.  And then they can’t figure out why they never get much out of the extraordinary amount of time they’ve invested.  So follow-up, get to know them, invite them to connect on LinkedIn, follow them on Twitter and “like” their company page on Facebook.

4)  Invest in Good Photos of Yourself.  People often think in terms of pictures.  If you want to be remembered, then you have to have a selection of good, candid photographs of yourself, and have new ones taken every two years at minimum.  It pays to have a relationship with a photographer you like.  Use your pics — and change them up occasionally — on your LinkedIn, Facebook and Twitter profiles.  And any other social media account that you set up.  It’s best to have some consistency of the photos you use so that people begin to remember you by your photos.  We’re coming up on our two-year anniversary so we’ll be scheduling a new shoot for ourselves in the next few weeks.

5) Give Away Great Content.  I met with a very successful lawyer last week and he told me that he built his large international practice using the “favor” method.  When he first got started, he would come to work each day with the intent to do as many favors for other people as he could.  Well, you can imagine that word spread and he got quite a reputation for helping others so when those same people needed legal help with their business, who do you think they called?  That’s right, the person who gave them value before they even asked and without charging for it.  That philosophy is still carried out in their business today.   I suppose it is equal to today’s common practice of paying it forward except in the business sense.

People tell me that I give away too much information but I disagree.  I’ve had clients tell me that not only do I know a lot about social media and digital marketing, but that I am one of the few who gives it away.  I know, just like my lawyer friend, that that effort will come back to me tenfold.  I mean, has anyone looked at Mashable.com lately– talk about being helpful, yes?

So don’t be afraid to give away really good and indepth content in the form of blog posts, white papers, handouts, webinars, presentations or social media updates.  That’s the reputation you want, for sure.  Pete Cashmore (founder of Mashable.com) has created a content generation machine and he has applied a business model to it.  Your business model may be different but the idea of adding value above and beyond what people expect is always a solid strategy.

What other small business tips do you have for creating your personal brand?  What has worked for you based on your own personal branding experience?

One of our favorite SEO (search engine optimization) tactics go relatively unused by most small businesses and that is to write a comment on a blog post that someone else has written that is relevant to their own content.

There are four key reasons why this is important for a small business from an SEO standpoint:

1. It will get your name or company name associated with other experts in your field, perhaps one that is more well-known than you or your company
2. It will often generate a link back to your site from their site so it is a win/win – they get an outbound link - you get an inbound link.  Search engines love both.
3. If the page rank on their site is higher than yours, this is a plus as this is desirable for increasing your off-page SEO.
4. That link will often stay indexed on the search engines for a year or more.

For example, I made a comment on a post that appeared on management.fortune.cnn.com in April 2008, and that comment is still there.  It featured a client of mine, so both of us are getting traction on that one simple comment that is being still being indexed by the search engines nearly three years later.  It is not as prominent now (i.e. it doesn’t rank as high in the organic search as it did originally) but it is still active.

Because the search engines may index your comments for years, it is very important to take a few moments to learn how to make appropriate comments that will benefit you in the organic searches.  Here are a few of our Rules of the Road when it comes to commenting on other people’s posts:

1. Only comment on a post by a reputable blogger or website.  Your name and/or company brand will be associated with theirs so, as they say, be careful who your friends are.  For example, it would be appropriate for me to post a comment to a blog that appeared on Mashable or TechCrunch.  Or to comment on an article on mobile marketing that appeared on the Wall Street Journal or the New York Times.  So please think through your best industry sources because if you’re going to spend the time and effort to write a comment, be sure the source article is highly credible and well-read.
2. Write a quality comment.  What you write doesn’t have to be long — could be a sentence or two — but be sure it specifically references a point in the article and add your own opinion.  You don’t have to agree with the point – perhaps you’re offering a different point of view — but please be sure you write something that the post author and subsequent readers feel you took the time to read and digest their original post.  Don’t just post something to make a comment without adding any real value to the discussion.
3. You can ask a question.  If it is appropriate, you can comment and/or also ask a clarifying question about what the author meant or what his or her intention was.  Questions continue dialogue and conversation from both the author and readers.
4. Don’t stuff your comment with keywords.  Keyword stuffing or being overly deliberate that you’re trying to promote yourself and/or your company, especially for the direct purpose of generating links back to your site,  is not appropriate whatsoever.  If someone does that to me, I often do not approve the comment as I consider it a form of spam.  However, I may be commenting on a post regarding digital marketing case studies and if my website is about digital marketing for business, then it would be appropriate to ensure that the appropriate keywords are in my comment – but only in a very natural, conversational way and not repeated unnecessarily as it would just come off as being redundant.
5. Do use your name and/or your company name.  Some comment services like Disqus will let you create an account and then it makes it easier to comment each time as Disqus will remember your name, title/bio, email address and company name.  That helps to garner better and more consistent mentions with the multiple search engines.

Once you get in a habit of leaving comments on other blog posts, it becomes easier and takes less time each time.  Most of us are already reading blog posts or we subscribe to the email or RSS feed in which we can just simply click through to the original article and add a comment. 

For those of you who are working hard to develop your online brand whether that be your personal brand or establishing your expert status on a specific topic or range of topics relevant to your business, writing comments on other people’s blogs can be a very effective part of your ongoing SEO strategy that doesn’t have any additional cost other than your time.  If you’re reading the article anyway to stay on top of your industry news, then it only adds a minute or two per comment to post your expert opinion.

Try it for a month or two and see how easy it is.  Then be sure it gets to your weekly or monthly “to do” list so that you don’t forget about it.  This SEO tactic is really one of the easiest ones for any small business owner or freelancer to implement.

Here are our top 10 best ways for you to get more mileage out of your small business blog:

1. Write an effective blog title. Your blog’s title is its billboard. It is what piques peoples interest enough to stop and read it. Don’t be vague – blog titles are no place for story lines. If it takes people more than a glance to figure out if it has any relevance to them, then you’ll lose your target audience. Quick.
2. Write with enough substance but not too long. Ideal blog posts are 350-500 words in length. They can be shorter or longer. If shorter, be sure you’re covering your subject with enough detail. Sometimes posts that include photos or videos can be shorter as far as number of words is concerned. If longer, be sure you’re making enough new points within the article that you won’t lose your reader, or graphically break up the copy with photos, bullet points or numbers as we’ve done here.
3. Add a call-to-action. We usually prefer that the post is closed in some way, either with contact info to get more information or a next step for your reader. Don’t just leave ‘em hanging, as if the post writer was lazy and left an unfinished piece. Your readers are looking for you to sum up your points in some way or lead them to the next step so they don’t have to guess at your intention.
4. Review your keyword list. All blog owners should be working with a keyword list that includes 5 main key words or phrases that you want to really own in the search engines, along with other keywords that are relevant to your content and what your target audience is searching for. Revising your blog posts to ensure a proper density of your main key words as well as any ancillary key words or phrases is critical to your blog’s success.  Tip: If you do not have a keyword / keyphrase list, don’t write another post until you create one!  This is critical to your blogging success!
5. Ping your blog. Be sure to ping your blog each time you post new content. This helps the search engines to know to look for updated content on your blog. Technorati, the search engine designed for searching blogs, is still valuable as is using Weblogs.com.
6. Blog Communities. Taking the time to list your blog in popular blog directories not only helps you gain new followers by making your content appear elsewhere but increases your search engine rankings because these sites have more SEO power than your site by itself. One of my favorites is NetworkedBlogs, which integrates directly with Facebook. NetworkedBlogs keeps a ranking of the top blogs in each city based on local followers so it is particularly important for local businesses. Other blog directories we feel are a must are BlogCatalog, Blogged and MyBlogLog.
7. Blog post sharing.  It is critical to make it easy not only for your readers to comment on your blog but also for them to share it. Popular sharing services such as ShareThis, which also provides results tracking, and TweetMeme make it very easy for others to share your posts with their audiences.
8. Outbound links. Can’t tell you how many blog posts we see that utilize zero outbound links. Blog posts aren’t book pages so don’t treat them that way. The whole idea is that your post provides an interactive experience and a way for people to learn more about a company, product or service that you mention in your post. Plus, it’s just common courtesy to refer out because that is exactly what you want others to do for you.
9. Write well and often. Ideally, you should be posting two to three times per week on your blog. More often if possible. Google, Yahoo and Bing tend to find your blog easier and more often when there is fresh content posted that includes your blog’s main key words and phrases. Building repetitive use of keywords and phrases over several entries, plus creating a history or backlog of posts (duration length) aids your overall ranking. Always add relevant photos, YouTube videos, SlideShare presentations or other graphics to make your posts more visually appealing.
10. Tag you’re it. Don’t forget to take the time to include your category and post tags for each and every entry and be consistent with matching the tags to the post itself.  This includes the custom title tags, meta description and meta keywords.

Effective blogging can take time but it’s worth doing if you’ve made the commitment to your blog. If you have created guidelines for your blog’s content, including your keyword list, then you can have guest bloggers add content if frequency of writing is a problem for you. If you own a small business, appoint several people to be part of a blogging team so that you as the business owner don’t have to be responsible for creating all the content. Or sometimes you can find a virtual assistant or intern to help write and/or edit and post with the proper tagging sequences.

If you’d like to know how to get more steam out of blogging for your small business, please tweet us @TractionGroup or call 804.402.0804.

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