Bill Hanifin
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Local merchants, the small to medium businesses that represent the core of the US economy, have never been more empowered to market smartly. At least that’s what “we” have been telling them. In this case, “we” is the collective tech and marketing community that has created an entirely new set of options for smaller merchants to reach their customers, deploy offers and hopefully generate additional sales.
The new playbook that has been created urges merchants to set up a Facebook page, establish a location in Foursquare, or tweet its brains out, with promises that customers will notice the activity and flood their doors. This recipe for success seems simple enough, but most local merchants have their hands full with the daily “to-do” list mandatory to keep the doors open. Deciphering the nuances of digital marketing can be lost in the process.
When too many choices are available for the brain to process, a system comes in handy to provide confidence and make marketing execution more efficient. Groupon, Living Social, and the rest of the daily deal clan have provided local merchants a protocol that is easy to follow and promised big results. The two most meaningful participants in the category (the only ones left that matter?) have taken steps to address flaws in their models with Groupon launching Groupon Rewards and Living Social announcing that it will issue a co-brand credit card with JP Morgan Chase. Each new tactic is created to drive repeat sales and introduce more solid measurement disciplines into the daily deal mix.
In the midst of the social shopping phenomena, how is it that the simple coupon book continues to survive and be an effective tool for local merchants? I came home the other day to find the latest version of the coupon book, packed cover to cover with coupons that tasted like the equivalent of “comfort food” for small to medium business owners. The offers ranged from 10 or 20% off coupons for purchases within specific time frames or threshold offers like $10 off purchases over $50.
There had to be a reason merchants fall back to the simple coupon in the midst of higher tech options and I came up with a short list of the pros and cons.
On the positive side, the lack of any technical barriers is reason enough for merchants to use coupons. No changes at point-of-sale are required to accept a paper coupon and the smaller the merchant the greater the chance that simplicity rules. Coupons are a medium that all merchants understand and there is no reason to expand or impact the acceptance network to accommodate a coupon.
On the negative side, coupons are not dynamic and can only be changed as often as the coupon provided publishes a new book. Coupons are also difficult to track and reconciliation takes massive willpower on the part of a business owner. When I asked a friend who owns a restaurant what he does to track coupon activity, he pulled out a trash-bag full of coupons that he would have to sit down and count if he was to make sense of how his promotion went and what it cost the business.
There are more pros and cons that I could list, but you can get the idea. The takeaway for me is that technology and marketing innovation can benefit local merchants, even “mom and pop”, but we have to make solutions practical, they must be easy to understand, and adoption can’t come with infrastructure changes and added cost.
The small business owner wants to move forward and wants to engage the digital consumer. They just don’t have too much time to learn and are not brimming over with money to fund what they might view as experiments. Marketers who not only create new methods for small business but also keep it simple and easy to execute will be rewarded with success in serving local merchant markets.
