Is that a Groupon in your pocket (or are you just happy to fleece me?)

Australia certainly has seen a boom in growth for the online group buying schemes in the last 12 to 24 months. Along with it, the mixed reviews of just how much of a bargain the group coupon experience can be. So why is group buying so appealing and what can we do to make sure what we buy is the value item we are looking for?

Let’s pick up the group buying phase and gives it a little shake to see what falls out.

Why Do We Do It?

Ten years ago, that person with the coupon book was embarrassing on a night out as generally, those little books spelt “cheapskate” in big block letters. Nowadays, group buying sites are more popular than Paris Hilton at a frat party after a bottle of tequila and an unhealthy dose of rohypnol as we line up to grab the latest bargain online. So why have things changed?

First of all, we should have all learnt from eBay or Boxing Day sales when we have to compete for an item, it seems that much more attractive. Take me for example. As Weird Al Yankovic implored down the radio “tell me why I need another pet rock” I was struck with the absurdity of being surrounded by 120 Vintage ties and 80 1950’s Dinner Suits begging to be uploaded to eBay after I had decided to make my “fortune” reselling auction house Vintage stock. It never eventuated- not to the level of me being able to retire to the coconut and bikini encrusted island I was dreaming of anyway. But I did see firsthand how ferocious people, especially women, can get over the simplest item of clothing on eBay if there are more than a handful of bids. If you’ve been stabbed in the back of the head with last season’s high heels in the mad scrabble that is the Boxing Day sales only to win the fight and have the same shoes sit idle in the cupboard for years I am sure you can relate. We humans do not like to miss out, and the more we have to “fight for it”, the more attractive it seems. Just ask any of the Playboy Bunnies that competed to cuddle up to Heff as he got more and more powered by the blue bombers from his doctor’s prescription pad. If someone else wants it, it looks so much sexier.

Secondly, we are primed with ‘monkey see, monkey do’ and ‘safety in numbers’ psychological responses. Take fashion for example- Emo and Indie boys everywhere persist in wearing stove pipe jeans with loose seats at the arse that make them look like giant anorexic spiders who need their nappies changed. Why? It’s not because they enjoy the denim driven friction hoisting up their trousers at 3 minute intervals can bring, or need to show their mummy they did indeed put clean undies on that day despite looking at though they are in need of a decent sandwich. They do it because some model somewhere looked hot doing it and now they think they do too. We are suckers for a trend, so in group buying, we see numbers of people aligning themselves with something and it becomes more attractive. We think because 1456 people have bought a bargain it has to be the real McCoy and really push hard to be that last 4 lucky individuals among the chosen few.

Thirdly, Aussies love a bargain. We love wowing our friends with awesome stories about what we bought for a fraction of the cost and cannot help ourselves when someone says “that looks nice on you” shouting “$7.50- bargain eh?” as though we’ve just discovered something akin to the genius of electricity in our latest purchase. Take that passion for a bargain and put it in a boiling pot with social media, online accessibility and email and before you know it, everyone is getting a “bargain- eh” too. But when is a bargain not really a bargain?

How Can Businesses Make It Work?

The single biggest problem with group buying is businesses underestimating the demand for their offering or simply getting too greedy. There are businesses out there that have actually disappeared before the deal is done, or who have created themselves a backlog of work with absolutely no profit margins which has lead to worker resentment and bad customer service as a result. Businesses need to work with the provider they choose and calculate just how much of their business they can afford to give at much lower profit margins, but they also need to think about the human and non tangible elements too.

Firstly, if you are going to offer a group deal, make sure your frontline staff has the right attitude. Train them so they understand just how much it has actually cost you in real terms to get that client through the door, and share with them your vision as to why you have made that decision. There is no point in offering a deal if your customer service sucks and your staff is not on board.

Secondly, bargain hunters can sometimes be like a bunch of hungry devouring the deal and not give anything in return. So make sure you take control of your value equation right from the start. Offer an initial visit discount and team it with a second purchase offer. Give an in-house special on the fly which is independent of the original deal which makes the business seem more loyal. Think about what you are offering and make it as “sticky” as possible so the locusts don’t flock but the genuinely curious do.

Finally, creatively use group buying to your advantage and don’t just offer the same old, same old. Group buying is a marketing campaign, just like any other. Don’t just slap it together and hope the people roll in.

How Do I Spot a Lemon Deal as a Consumer?

The single biggest problem with group buying is businesses underestimating the demand for their offering or simply getting too greedy and spraying it around quicker than a Rottweiler during mating season. There are businesses out there that have disappeared before the deal is done, or who have created themselves a backlog of work with absolutely no profit margins which has lead to worker resentment and bad customer service as a result. So how can you avoid being on the receiving end of those experiences?

1. Google the same deal on offer using the business name, the word deal and some keywords from the offer itself. If the same business is double dipping across a few sites or is loading in the deals month after month, chances are they will suck or at the very least be breaking under the pressure.
2. Do your research. Don’t go with companies that have poor reputations or are not established. Read reviews about other people’s experiences and check Customer Underground for the businesses feedback levels.
3. Use your noggin and avoid buyer’s remorse. I mean, we all love a bargain, but a bargain isn’t a bargain if you regret what you bought. After all, a giant pet Octopus valued at the GDP of a small Caribbean Island but bought for $40 that you cannot stand now it’s living in your bath tub is not a bargain in the end, is it?
4. Take a leaf out of Goldilocks’ book and aim for “just right” in terms of timing your deal. You will be hard pressed to get the best experience straight away, and forget trying to squeeze it in just before it expires. Aim to space your deal redemption somewhere in the middle ground.
5. If you get stooged, let the provider know. Group buying sites do value your feedback and contrary to popular belief, don’t have a crystal ball or a psychic on staff. So you telling them you are having a poor customer experience is the best way to fix it.

Finally, when group buying, be nice to the business who is giving you the deal and come back to them if you enjoyed what you experienced.

That business put their bum in the wind to get you through the door and probably lost money doing so. Help them know it is worth it by sharing some love!

Happy group buying!