“Deals” are the current trend and they won’t be leaving us soon.
There is a growing sub-category of social media known as social commerce. The group is dominated by the popular buying sites, Groupon and Living Social which promote daily deals in specific cities through e-mails and social network.
Most of the deals are very appealing…even sexy. I read where they actually employ comedy writers to write the copy for the ads. I have bought some very good deals myself…like 5 Yoga classes, a car wash with detailing, and numerous meal deals.
Let me tell you about one…a charming little restaurant in my town that is known for good food. I bought the deal which entitled my wife and I to two fixed price meals for half price. Normally the meals cost $80 but we paid $40.
We arrived to an unreasonably crowded restaurant, and as instructed by the deal, revealed our coupon at the start.
Everything went downhill from there. The place was being served by one waitress, who was the owner, helped out by a busboy. Totally understaffed. My first thought was to feel bad for them until I realized that I was being treated like a second-class customer. I could feel the chill in the air.
The courses were served in an arrhythmic fashion but actually were pretty good…but the service and the cold shoulders ruined the experience. The waitress actually threw the check down at the end of the meal…I didn’t know how to interpret this behavior until I went home.
I definitely left angry…and you know what they say about angry customers…they will tell 25 people.
At home I immediately checked out this particular Living Social deal. They had sold over 550 of them. They had to be fulfilled in 4 months. My bill that night was $8.50, not including the $40 that I prepaid…it was for coffee and taxes.
I did the math. Five hundred and fifty quality 4 course meals served by an overworked waitstaff over 4 months for $20 per meal (the social commerce group gets 50% of the deal), is a formula for disaster. No wonder we got the cold shoulder.
Old Model New Tools
The model that these social commerce websites are using has been around for many years. It is known as “buy first then sell.” For example, say you had a group of customers that you knew were in the market for certain products or services, and say you had a place to procure (good word) these products or services at a very cheap price…and you sell them fairly cheaper than the marketplace…in other words you could make a deal. That concept has been around since the dawn of man.
You would be in a pretty good position if you had the customers, or could buy the goods at great prices, or both.
Okay…what’s this got to do with dentists?
Well, insurance companies, HMOs and PPOs having been making these deals for years. Now with the new tools of social media we have new players in the game.
Actually people who “fence” stolen goods could be considered using this model. Think about it. I know that poor waitress entered into the deal with her own free will…but it was pretty seductive to get all those new patients…er, customers.
I Want to Be Honest With You
I ran a Living Social deal. (more…)