Using voucher code sites to promote your business

cuddlymarm

Hi

Has anyone used voucher codes, wowcher etc to promote their business ? If so, how well did it work and how expensive was it please. I'm in the process of setting up a new business and am looking at all the options to get myself known.
Thanks in advance for any advice
Cuddles

paddyrg

Voucher sites profit at the cost to the advertiser. They will often only promote deals of 50% discount to the customer, then they themselves keep 50% of the voucher price. That means at best you are providing a service for 25% of your usual charge. Unless you're in some high margin vanity market (tooth whitening, cosmetics, fad diets) you have real costs and lose out financially.

Is it worth it to build customer base? Also, unlikely. You do not attract good customers, you attract bottom-feeders. People for whom price is the only consideration. They have no loyalty (they came to you from someone else because you were cheaper in the promotion) and will be off again in a heartbeat. You also get a generous share of whiners, despite the fact you're probably subsidising their session once you factor in cost, rates, wages, overheads but still only getting 25% of your fee). Read this site for examples of people who get stroppy that they weren't royalty for £2.99 with a voucher scheme.

Remember the old gag "We're losing £1 on each customer but making it up with volume" - suddenly seems quite real. The discount customers fill your order book, leaving no space for potential real, valuable customers. If you find you can for in some real customers, the discount/voucher customers can potentially be unable to book for their favoured time by the end of the promotion, and will go back to the voucher company whining, and get their money back, which is/can be clawed back from you.

These voucher schemes also look desperate. Look at the other businesses on there, they're either vanity products with margins so wide they can make a profit on 25%, or companies selling a single product (eg headphones) with a lot of hyperbole (and the company set up 3 days earlier, dump shoddy stock on the market and close the company), failing businesses trying to hold on with bleeding fingernails, or naive startups. You don't see Curry's offering 50% off a laptop for instance or Waitrose discounting some quality food, it's always a bit marginal.

All the above is my opinion only of course, you might have a business model where it works for you. Just go into it with your eyes wide open and ask all the right questions before you sign anything. Remember the voucher companies will be your best mate whilst they're trying to hook you as a customer, so check everything they say is backed up in the paperwork you sign.

By all means run your own discount voucher scheme where you discount by a healthy but attractive amount and you manage the terms carefully. If you're online most shopping cart systems can handle different voucher types - personally I'd suggest single use codes as you can track which promotions yielded results and you don't get the codes posted on sites like this for world and dog chasing cheap at any cost.

Percy1983

As above I wouldn't consider such sites as a use them occasionally and have never been back to any of them at full price.

My business is more service based to which I offer discounts on the first show, so far I have 100% retention as they have all booked again, I am now moving to stage 2 and have just launched a referral program which will give further discounts to my current customers and get more new customers, my business was all ready getting out there on word of mouth, I am just going to start paying them to talk more!