Was the Groupon Business Model ever sustainable?

Avatar_DM_MoneyvsToolsI read a news item on the BBC’s website today about the Chief Executive and Founder of Groupon losing his job after the on-line voucher company confirmed another quarterly loss which resulted in a 24% slide in its share price last week. In total, Groupon’s shares have lost 77% of their value since the firm was floated on the Nasdaq in November 2011. It seems the biggest concern for investors was that its business model (offering bulk discount deals) was unsustainable.

I have plenty of discussions with clients about the benefits (or not!) of offering discounts as a means to attract new customers. I have always recommended against this type of strategy as 1) it reduces your margins for sales that should be able to stand up to their own value and 2) it attracts customers whose prime focus is cost-saving.

Business owners often believe – mistakenly – that customers only buy on price. Whilst this may be true for commodity type products, more typically there is a whole range of factors that contribute to buying behaviour, from the customer’s perception of the brand to their expectations of what the product/service can do for them. The key factor is ‘value for money’ and this does not mean ‘cheap’.

This is particularly pertinent to businesses who provide services rather than products, as the value proposition is influenced by many aspects, of which ‘low cost’ is usually the least important. If you do wish to use offers to attract new business, then always make them ‘add more’ to your usual product or service, and never let them ‘cost less’.

If you’d like to know more about how Dangerous Marketing can advise you to use this approach to grow your business, contact us now.

Grants to Kick Start your Business Growth in 2013!

2013Avatar_DM_££If you run an SME (Small & Medium-sized enterprise, typically with less than 250 employees) looking to kick start your business growth in 2013, then you’ll be glad to know there is money available to help you do this!

If you’re based in the south west and south of England and meet a set of initial criteria, you can access a grant to help with utilising a Business Coach and accessing training. The organisation Oxford Innovation has developed a programme called the Growth Accelerator to enable high-growth businesses and start ups to access the key knowledge and advice they need to grow by at least 20% year on year.

The programme is split into 2 parts (and you need to be accepted onto part 1 to be eligible for the funding available in part 2!):

  • Coaching for Growth that focuses on either business development, commercialising innovation or accessing finance, and 
  • Leadership & Management Training.

The Part 1 Coaching for Growth gives your business access to an experienced business coach for 7 days of coaching time. The topics you cover and the approach to be used will be up to you as you identify at the start of the programme what are the key barriers that need to be overcome.

The full cost of this coaching programme is £3,500 + VAT (£700) – a total of £4,200. Depending on the size of your business, you only have to pay a contribution to the overall cost, ie:

  • between 1 and 4 employees, you pay £600 plus the full VAT (total of £1,300)
  • with 5 – 49 employees, your contribution is £1,500 plus the full VAT (£2,200)
  • with 50 – 249 employees, you pay £3,000 plus the full VAT (£3,700).

This amount is payable up front but once you have paid it, there is no further requirement as the coach is paid directly by Oxford Innovation.

Part 2 is a funding programme for Leadership and Management Training, which provides 50% matched funds up to £2000 (ie you get back 50% of any training costs up to £4,000). Unlike previous funding programmes, this one is applicable for each senior manager (owner/director) within your business. There are limitations on the type of training topic you can do (ie cannot put it towards technical training to help you do your job!). Again, you need to pay up front in order to get the funding but if you have a number of managers who require training, the payments can be spread across a number of months and you will be able to claim back against anything you have paid already.

This is certainly the most generous funding programme to date so use it to kick start your business growth today! Use the form below to contact us for more details and we will connect you with the right people to get your application started.

Top 10 Twitter Campaigns of 2012

2013Avatar_DM_Top102012 has been a memorable year for the British, so I was interested to see what had been the top campaigns on Twitter in the UK too. I’d assumed it would be linked to the Olympics/Paralympics – but I was wrong (although two out of the top 10 were linked to the Olympics).

As this article from Marketing shows, the top product campaign (based on the number of engagements, reach and impressions) was by new 4G operator EE. It was voted as the best promoted product campaign for the approach it used to reach the widest audience on Twitter. Not only did EE use Promoted Trends and Tweets (paid for) and targeting based on location and interests, it also integrated the Twitter activity into its overall advertising campaign by including hashtags and @ handles in all its other media channels.

Your business may not have the multi-million £ budget of EE, but the principles remain the same – know your audience and relate your promotional activity directly to them. So if you need any marketing ideas, click on any of Top 10 list below to see what they are doing on Twitter and learn from the best!

  1. @EE - brand launch campaign in October
  2. @StarbucksUK - #FreeStarbucks campaign in March
  3. @Puma - Usain Bolt’s 100 metre final campaign in August
  4. @DairyMilk - sample give away for puzzle solvers in September
  5. @EASportsFifa - promoting the launch of Fifa13 game in September
  6. @EnterTheCabinUK - film launch of ‘Cabin in the Woods’ in April (temporary account set up just for the launch)
  7. @CokeZone - #freecocacola trend in September
  8. @AdidasUK - Olympics closing ceremony campaign in August
  9. @NowTV - Sky’s launch campaign for its new channel in August
  10. @AssembleLive - film launch of Disney Pictures’ ‘The Avengers’ in April

How Safe is Your Twitter Account?

2013Avatar_DM_HackingWith the recent notifications by Twitter that many of its accounts may have been hacked, it continues to beg the question of how we keep our social media accounts safe. I find that I still regularly receive ‘Have a look at this’ or “Have you seen what this person’s been saying about you’ tweets from twitter followers. If I didn’t know the people behind the accounts (and know they wouldn’t send me this type of message), I know how easy it would be to click on the link and then have my account hacked too!

There are some simple common sense ‘rules’ that will keep your account safe but I’m amazed at how often people don’t follow them – when was the last time you changed your password for example? And how easy is it to work out what your password is? Are you one of those people who still use ‘password’ as their password? So here’s some tips to keep you safe and solve your problem if you do get hacked (plus there are more tips and ideas from Twitter themselves):

  • How strong is your password? It is recommended to combine upper and lower case letters, numbers and symbols. Ideally it should be random letters but that isn’t easy to remember so try and use something memorable but mix the cases up – for example, instead of ‘mydogrover’ use ‘mydOgroVer2!’.
  • Keep a note of your passwords in a safe place – ideally handwritten in a note book or if you need to keep it on your laptop, list them in an ‘unusual’ programme eg in a PowerPoint file rather than Word or Excel.
  • Change your passwords on a regular basis – but try and keep the timings of these changes different ie not every 4 weeks or a month but changes after 3 weeks, then 7 weeks, then 30 days etc – in other words, try and avoid a predictable pattern.
  • Be mindful of the apps you use – are they from a trusted (visible) source. If in doubt, do not link with them. If they are promising you something for free, then it’s highly likely it’s a phishing scam!
  • Also be mindful of links you click – look at the URL in the address bar of your browser – does it look right or are there odd letters in it?
  • And most vital of all, when did you last update your virus checker? It’s worth the (usually minimal) cost of buying recommended anti-virus software rather than just relying on free versions.

And what to do if you do get hacked? Luckily the solution is simple:

  • DO NOT click on the link in the ‘dodgy’ tweet (if you’re lucky, one of your genuine followers will let you know that you’ve been hacked!)
  • Delete all the hacked tweets.
  • Revoke all your connections (unlink) your apps (this can be done through your Settings in Twitter).
  • Change your password (ideally using the recommendations above).
  • Update your new password in your trusted 3rd-party apps.

Prevention is better than cure but luckily the cure is also relatively simple too!

Using Psychology to attract attention on Twitter

Dangerous Marketing’s specialists employ an understanding of human behaviour to develop innovative approaches to get our clients to “punch above their weight” and beat the larger corporates to win business. One of our key services uses our experience of social media, in particular Twitter, to raise a business’ profile, so here are some tips we’ve applied that increases the likelihood of getting YOUR business noticed.

A key starting point is having an emotionally intelligent style when writing about your business (if this term is new to you, look up Wikipedia or the originator of the term, Daniel Goleman for more detail).   Emotional intelligence (EI) is about your awareness and use of your own emotions and behaviour to perceive, understand and manage emotions in others. Social media is about interacting with people (known and unknown) in the virtual world, but the same social and cultural rules apply as if you were in a room of people.  How do you want YOU (as the personification of your business) to be perceived by others? Someone who talks (or shouts!) at others but doesn’t listen? Someone who wants to engage? Or someone who is just desperate to sell something now!

Therefore write your tweets with an individual in mind, rather than trying to appeal to everyone.  Picture your ideal customer: what do they do? How do they behave? What type of information would most interest them? Put yourself in their shoes and make this the basis of what you tweet. You are engaging people in a conversation to build a relationship. Remember – it’s not about what interests you, it’s about what interests them!

Only tweet/retweet when you have something relevant (and current!) to say. People get particularly interested if they think you are giving away useful information! Don’t worry – only having 140 characters means you only have the space to impart the bigger picture (the “what”) rather than the detail (the “how”). Natural human curiosity will entice others to start a conversation with you to find out more.

Be genuine - relationships happen much more quickly when people believe it is a real human being behind the tweets. The only accounts that send out hundreds of automated messages are spam accounts, so keep your tweets participative and reactive to replies and retweets (always helps to say thank you!). You’ll be much more likely to be re-tweeted or get invited to engage in conversation.

If you want to have a conversation, invite interaction by using calls to action. For example, ask a question or request an opinion on a situation from your followers. Active tweeters like to engage and conversations on Twitter often lead to e-mail exchanges and telephone calls when people want to know more about what you do.

Don’t get hung up on the number of followers you have – quality is far more important than quantity! Twitter is a great communications channel for small business but it only works if you engage with other Tweeters most likely to have an interest in the products or services you provide. Your tweets are about creating connections – and humans only want to connect with like minded people.  Humans crave similarity and compatibility – not something that applies to a mass audience.  The virtual world is the same as real life –  you get a much better response when engaging in depth with a few people rather than shouting “sound bites” to an audience of thousands.

Stay in control with a plan for why and what you tweet – have a social media strategy that is part of your business and marketing strategies. If humans feel out of control, they get stressed. When we are stressed, we are more likely to say things we did not intend or the meaning is unclear. Having a plan maintains the balance between remembering Twitter is one communications tool among many and getting caught up in the social media frenzy (Twitter can be highly addictive!).  Remember – everything you tweet is in the public domain, so every tweet must be for a reason as this defines your audience’s expectations of what it will be like to deal with your business.

And finally, a fairly obvious statement but one that gets ignored frequently: be professional at all times. This means conforming to the expected standards of your profession or business sector, eg avoid tweeting using language or content that could offend; think about the reactions your words might create in others. Whilst other tweeters set out deliberately to provoke to grab attention, it is unlikely to engage people’s interest for long as constant provocation is very draining. Develop your professional “voice” in your tweets that sums up what it is like to deal with your business, eg friendly/formal, chatty/to the point, generally informative/specifically technical etc.

We are always keen to hear from others who have used psychology to attract attention on Twitter, so contact us and let us know how they work and what response you typically get.

(This article is an update to an article we wrote and published originally in March 2010).

New CIM Role

Great to say I’ve got a new (additional!) role – I’ve just been appointed as the Chartered Institute of Marketing South West Region’s Social Media Ambassador. The CIM’s ambassador programme has been established for several years and our main role is to improve engagement and develop partnerships with members and businesses across the south west peninsula. The ambassadors are a network of Chartered Marketers and Fellows of the institute (and who are members of the regional board) who volunteer their time to share marketing information, advice and knowledge for our specific sector, so with my experience of using social media from both the marketer’s and the customer’s perspectives for some years now, I’ll be helping to spread the word as to how valuable social media is for business.

Of course you can still engage with me on Twitter via @DangerousMkting but I’ll also be part of a team supporting the CIM South West on @CIM_SW and our Linked-In group. We’ll be spreading the word about the great CIM events that are going on, as well as providing the latest news from the world of marketing. We’ll also be hosting some tweet forums where you can join in to discuss the big marketing topics of the day! You can also access what the CIM does in the south west at our new website where you’ll find loads of information about marketing, including events, news and our quarterly newsletters.