Would You Pay Full Price Later after Using a Coupon to Get You in The Door?

saxlady on 30/12/2010 - 22:15

I was just reading the article here
- http://www.smh.com.au/business/media-and-marketing/daily-dea… about group buy discounts etc and was interested in the comment that ….

"As the popularity of these websites increases, they acknowledge the danger of attracting ''deal junkies'' - people who move between sites and deals taking advantage of the discounts. But they admit they do not know quite how big the danger is.''We think it is a small minority, perhaps 1 per cent or less, but it is not going to have an impact,'' Rigby says.

Surely 1 per cent is greatly underestimating things? I always look for discounts for many items, and I'm sure I'm not the only one. For example I do not have a particular hairdresser but look around for specials when I'm going to get a cut/colour etc. And then next time I'll look again - not go back to the same place to pay full price

What does everyone else here think? Would you become a regular loyal customer at full price if you loved the service/food/whatever?

General Discussion

Comments

  • Mikinoz on 30/12/2010 - 22:20

    1% hmm looks like someone will be eating those words, poor Rigby.

    I nearly fell asleep reading the smh article though, thank you for summing it up nicely :)

  • h4lcyon on 30/12/2010 - 22:41

    I've bought a few group deals over the last 3 months, and most of the purchases are for services I would normally not use because they are too expensive, or I don't feel they provide value for money but am happy to give it a go if cheap enough ;)

    A couple examples where I would not use the services again are whale watching and & fishing charter, surely these business don't expect too much repeat business but are reducing their margins for increased volume.

    I've bought massages & beauty spa appointments for my wife, so far all have been good experiences, but she has said that at their normal price it's just too expensive.

    So I'm with you, and perhaps most of the other ppl here who will take advantage of the deals.

    I guess if you are already interested in paying for a particular service, and stumble on a deal you would be much more likely to take up the deal and continue paying afterwards.

    • SomeGuyOnOzB on 07/01/2011 - 17:06

      I think a business needs to have reasonable prices for me to go back after trying on discount.

      Some of the takeaway meal discounts etc it would work for.

      But yeah, normally overpriced or expensive prices won't get me back in the door (without something being incredibly good about the service or something)

  • samfisher5986 on 30/12/2010 - 22:43
    +1

    I'm definitely a deal junkie, like many others I bet.

    The problem is that I don't find the regular prices of these business's very appealing, so I often won't return and pay full price.

    Seems like these business's are about to find out that customers don't become loyal very easily :)

  • issh on 30/12/2010 - 22:46

    really depends on the loyalty between business and customer

  • h4lcyon on 30/12/2010 - 22:48

    The other article on that site is interesting

    "Groupon is also taking Scoopon to court in its home state of Illinois, claiming federal trademark infringement, unfair competition and deceptive trade practices, even though Scoopon's business is limited to Australian shores."

  • scotty on 30/12/2010 - 22:50

    the danger of attracting "deal junkies"…

    Is he talking about… OzBargainers?!

    Back to the topic. If you have paid half price for the same thing before, how willing will you be to pay the full price? Or how good the product/service needs to be to compel you to pay the full price?

    • samfisher5986 on 31/12/2010 - 01:01

      I think thats exactly it.

      For example if I need Olive Oil, I'm going to wait until its on special for $20-25 instead of paying $50.

      I would have thought most people would be similar.

  • bluedufflecoat on 30/12/2010 - 22:54

    I would go back to Crepe Mania in South Yarra and Table Talk Cafe in Glenferrie. :)

    The other "service" type ones like massage - maybe, if I can get my healthfund to cover some of it.

  • zhenjie on 30/12/2010 - 23:13
    +1

    That article, while welcome in increasing awareness of group buying, really let itself down by allowing the group buying reps to state inflated or just totally inaccurate figures and stats. Only 1% shop at more then one group buying site? They've got to be joking, I'd like to see the research behind that.

  • zhenjie on 30/12/2010 - 23:19
    +1

    Oh and yep, I've returned to places (mainly the Gelato and cafes) that I've enjoyed.

  • Davo1111 on 30/12/2010 - 23:45

    "deal junkies"

    lol, it sounds…. illicit. I know ozbargain is addictive, but not that addictive.

    • johnn on 31/12/2010 - 00:15
      +4

      Not that addictive?! Last time I went off Ozbarg-aine for a few days, I was shaking and came down with a bad case of FullPrice-itis!

      • scrimshaw on 31/12/2010 - 00:59
        +2

        Lol, I remember going overseas to Asia and then went to a net cafe just to check on Ozbargain, only to realize that I could probably get things from cheaper there.

        • scotty on 31/12/2010 - 01:07
          +1

          You could still check into OzBargain to brag about it :)

        • AntMan76 on 31/12/2010 - 13:52

          Surprised you didnt try the singaporean ripoff site

    • altomic on 07/01/2011 - 09:33

      oh man, you got a spare bargain?

      I missed me train to me mums house and need a bargain to get there.

  • retiredfeline on 31/12/2010 - 01:06

    A couple of the eateries I tried I would go back to because the food was good. The rest, forget it.

    Really, the spend should be regarded as an advertising cost by the business. So it really only works well when they are unknown or obscure. If they are trying to rescue the business, it's probably too late; there are probably reasons they are not patronised.

    • SomeGuyOnOzB on 07/01/2011 - 17:14

      Agreed. It's great for advertising and getting people to try you out. I've heard about so many businesses that I never would have heard of before.

      Though, some of the deals look a bit risky.

      There was that romantic heart winery thing … I forget the name. I calculated they had sold so many 2 day stays and dinners:
      - come time to book, 2/3 would not be able to get a weekend stay
      - people would have to book within a month of buying (despite a 1 year expiry on the voucher) or risk being told there is no availability to use the vouchers

      • 7Alice7 on 07/01/2011 - 17:41

        I bought a voucher on 29/12 and phoned today (7/1) - first available appt. for beauty treatment is a Tues. 15 March at 4pm. Voucher valid till 1 June. I'm guessing lots of people won't be able to use their vouchers.

        • SomeGuyOnOzB on 07/01/2011 - 18:11

          I'm hoping people make all their bookings soon-ish giving them plenty of time to sort things out.

          From what I read on one deal :( one company was not forth coming in helping people who could not book to use their vouchers.

          More time allows for more time to talk to Consumer Affairs and lodge a complaint if need be.

  • pauly on 31/12/2010 - 01:17
    +1

    What does everyone else here think?

    On OzBargain, most opinions you get will probably be biased and likely to support your hypothesis about the 1% figure being inaccurate. Add me into that statistics. :)

    In all honesty, I wouldn't mind paying full price if the price is reasonable. But I think the way most group buy sites are marketing for businesses can be a double edge sword.

    For example, how many times do you see these sites advertise "pay $x for $xxx value", where $xxx are normally over-inflated? Posting the 'normal' price of $xxx gives the impression to people that the place is expensive, and you're getting a bargain using coupons. Realistically, how many people who purchased the said coupon would be returning if $xxx is an indication of the full price?

    And let's not forget, most people that are normally willing to pay full price will not be visiting coupon sites. In fact, I'm guestimating the opposite - around 1% will be returning and pay full price and most of the 1% were probably given the vouchers by someone else.

  • samfisher5986 on 31/12/2010 - 02:20

    Lets also not forget that a lot of people I know that classify themselves as "upper class" don't like using coupons at restaurants etc as its cheap and stingy.

    Another reason why they are attracting the wrong type of people.

  • WaywardOne on 31/12/2010 - 11:45

    I have been tempted to drive halfway across Sydney for a cheap meal. However there is no way I'd ever go that far for a full priced meal. My advice? Repeat business comes from locals. Advertising your services to everyone in the world is not a good idea. Somehow restrict coupon buyers to those within a 5km radius of the business.

    • retiredfeline on 31/12/2010 - 12:09
      +1

      Unless you are offering specialty cuisine or some attraction, like a good view, then customers may be non-locals.

  • andy19363 on 31/12/2010 - 12:02
    +1

    I guess the 'old style' versions of this, ie the Entertainment book, shopper dockets, etc has been running for years, so one might imagine that the concept has had some success in attracting custom.

    I suppose the important thing is…Are the companies losing money when they offer these deals?….if not, then the 'deal junkies' are really just extra custom. It really doesn't matter if they go back or not…. on the particular day they use the deal, they are extra 'bums on seats'.

    • zhenjie on 31/12/2010 - 12:54

      Most deals are definitely loss leaders.

      • andy19363 on 31/12/2010 - 13:01
        +2

        I'm not sure about that…..tis better for some salaried hairdresser/masseuse doing someone for half price than to pay them for sitting around doing nobody.
        I think, in general, businesses that are booming with full paying customers are unlikely to use a coupon approach.

        • scotty on 31/12/2010 - 13:19

          Often what the business get is a lot less than half-price, when you factor in the amount Groupon/Scoopon/JumpOnIt/Cudo/etc is also taking.

          And in some cases they might even need to employ extra hands to take on surge of "deal junkies".

        • zhenjie on 31/12/2010 - 15:41

          Trust me, I'm sure about it. Even if its service based the deals will tend to be loss leaders after you factor the commissions paid to the sites.

        • SomeGuyOnOzB on 07/01/2011 - 17:19

          I'd second andy19363

          If you have salaried staff who are providing a service such as hairdressing or massage, it'd be better to keep them busy and get in 40% than have them sitting around chatting and get 0%

          (I'm thinking of Doncaster Shoppingtown, where some of the massage places often just have the masseurs sitting around chatting. Though I'm not sure if they are salaried or commission based)

          -> Scotty
          I went to one place that did not take on extra people to handle the surge :(
          The service was abysmal

          -> Zhenjie
          With the example I gave of a massage place that is say, not busy all the time, and they advertise the vouchers, and when people ring up they only get the times the business is normally slow … would that still be a loss leader?

  • ESEMCE on 31/12/2010 - 14:02
    +1

    I'm definitely a deal jumper when something is planned (especially as an Entertainment Book owner), but if it's an impromptu event, I'll often suggest a place that I've had a deal at nearby (if the experience was any good)… So in that respect, I guess it works out for them that way..

  • samfisher5986 on 31/12/2010 - 18:50
    +1

    If these business's aren't making a profit, why do we have ozbargainers being treated badly?

    I would have thought if they were losing money they would do all it takes to make sure they come back?

  • huntress_love on 01/01/2011 - 01:52

    yea found it odd that ppl with coupons r treated badly, considering they meant to offer u great service so you'll return.
    i think some businesses make money, as i c some of the same companies just take turns with different coupon sites.
    personally haven't returned to any i've used but most of them weren't that great.
    with the coupon sites dont think i'll ever go back, cause it'll be cheaper to try the next new place.

  • cloudy on 02/01/2011 - 11:24

    from reading that i can't help to think I should try to support the smaller players in the market. I worry that once the big players get a stronghold business and customers will be the ultimate losers. My friend told me that he asked zoupon as a prospective business how much it would cost to go on the site. At first they offered 30% take of the sales rev, but then lowered it to zero. The small players will be getting desperate whilst the bigger spreets, living social, scoopon would prolly squeeze the business providing the services of any cash and hence why we hear so many bad experiences from the business' offered by the larger group buys, they would be taking up to 50% cut of the revenue.

    • voter1 on 02/01/2011 - 20:15

      interesting that they would lower it to zero - not enough deals to put on a site hence willing to do free advertising? interesting.

      I would refer to a comment from mad men that is also very interesting - creative is free window dressing that comes with the media buys. Media buys pays for creative, not the other way around.

  • 7Alice7 on 02/01/2011 - 23:41
    +1

    A physio business wasn't able to deliver on remedial massage vouchers and so took on a recently qualified masseuse. She didn't have the experience and skills to entice me to return and pay full price. Similarly, the quality of some beauty treatments I've received has been poor/mediocre. I think I'll only purchase vouchers from newly established businesses in future, there is a reason the others are struggling to get customers.

  • tomo88 on 02/01/2011 - 23:42

    very interesting topic, understandably as stated already most opinions on this site would be biased.

    At first I thought, well they're getting customers that would never otherwise pay for the service. Overall, it's an increase in revenue, even though profit margins may be lower. Never thought to think some would be running as loss leaders. I mean they say 'worth x amount of dollars' but tell em they're dreaming…clearly inflated.

    I mean majority of my decisions between alternative products/services comes down to price, which has had it's ups and downs, however I'd definitely be willing to be a return customer/consumer should the product be exceptional. However, I can only recall ever doing this with one certain clothing label after buying some of their sale stock I loved the cut and quality and was willing to pay for full priced items.

    Like most have said though, it's more marketing and getting a name out. For instance, my old man found a surf lesson group that had a daily coupon thing, I missed out on it though but I went on to google the company and had a look into it. But yea, once you've seen how cheap you could've gotten it, you're sort of reluctant to spend the full retail. Had I just seen an ad in the paper, I may have just went with it, but when they do something ridiculous like >65% off, there's no justifying spending full retail. The only thing I can think to do is google other alternative services and find one with a better deal and good reviews.

    The main point I just wanted to say was that if anything, it's making the consumer spend more than they would've intended anyway, so surely even if they do it so that the profit margins are fairly thin, the volume will have increased and overall revenue increases. There's also the added bonus of word-of-mouth; more people goto the place, say good things about it and encourage others to try it out (at full price). My folks have gotten quite a few of those restaurant "pay x dollars for x amount worth of meals" deals which they would have otherwise never, ever, ever thought to goto.

    Win-Win for business and consumer?

  • compingqueen on 03/01/2011 - 14:00
    +1

    I'm a deal jumper - isn't that why these sites are around, so that we don't have to pay full price? There are certain things at the supermarket that I only buy when they are on special.
    I've bought a few deals over the last few months - for eg. why would I pay $500 for a full leg of laser when I can pay only $80. I just wait for there to be new laser deals so that I don't ever pay full price. It's just too expensive otherwise.
    When it comes to food/restaurants then I would def return and recommend it to others if I was treated well and the food was good.

    With the cost of living as expensive as it is, I'm glad these sites exist.

    I think these businesses may get something out of it. I've bought restaurant deals for places I would never have visited otherwise. I've also bought deals for places that I already frequent.

    I always do research whenever I buy a deal. I check how much it is, and see if they're running any promotions on their website…

  • Craze on 03/01/2011 - 15:12
    +1

    A definite "deal junkie" here- I think price is the first factor when it comes to these group sites, and even with their massive discount the true value is probably only 30-50% from the clearly inflated prices!

    I'd bought about 5-6 deals from different sites so far, and sad to say I haven't had really good experiences with any of them, none that I'd recommend to family and friends even! The most recent example was a deal from Sizzle India- $24 for $80 worth of food. I made a reservation 2 days prior and we were the only ones when we arrived at the restaurant..there was only one front house staff who served us and wasn't very familiar with the menu. Service was ridiculous, we placed our order first but another table who arrived after us received their food first! Adding to the insult our food came our cold- but another "full paying" customer had their food out piping hot.

    All I'm saying is that these companies gotta step up their game if they're trying to get more customers in through these coupons- with restaurants I'd gladly return and pay full price if they are proven good with reasonable prices. Unfortunately none of my experiences so far has managed to impress me, and I'm really baffled at how some discriminate the coupon users as opposed to their full paying customers!

  • cloudy on 03/01/2011 - 22:11

    I think what you'll see is less and less food deals, all the talk of inflated prices of places and win for business applies mostly to service business. IE, $90 hair cuts and blow drys or massages etc. but for food places,i've been to plenty of food places i woulda paid full price had it not been for the coupon and the amount of food i received for the coupon i wouldn't be able to buy at costco, let alone make and clean up and rent etc etc. Especially when you know the large coupon sites take cuts up to 50% of the revenue, resturants will fade away and become unsustainable.

  • altomic on 07/01/2011 - 09:45

    the hair/beauty/massage/laser treatment coupons are good for the business in terms of demand for that business and the view by consumers that it is a popular business and in demand and therefore very good.

    Other patrons (non-coupon) ringing for an appointment will be told "oh, we are really bookedd out, we can fit you in 2 weeks next friday at 8am". Non-Coupon patron thinks "holy moly, this business must be great" and tells friends.

    So from a business reputation point of view it can be very positive.

    It also books out their appointments for months ahead so they do have a guaranteed income.

    So a bit of a win/lose situation though in that they are not charging full price.

    but ask any business owner if they would rather be half full and breaking even or booked out and breaking even. As a business owner I would rather be seen as extremely popular and extremely busy (because no one but me knows then finance side of things) than having a so-so run of customers with down time.

  • moooooooo on 07/01/2011 - 10:03

    I've picked up a few restaurant deals over the past year. I have gone back to a couple of them and paid full price for food there.

    I also know that friends who I took to a different restaurant using a coupon have returned to that restaurant and paid full price because they liked the food (whereas I was not such a fan).

    Overall though, I'd say that I tend not to go back to the ones with the coupons because their prices are too high for the food quality. I might have enjoyed the food at the time and known I was getting a low price but then, without the coupon, if the restaurant bill would be 50% more than their opposition and I don't think the food/location was 50% better, I won't return.

  • llama on 07/01/2011 - 13:17

    If you get crap food or service when you go using a coupon, there is absolutely ZERO reason to return and pay full price. If it was crap at 1/2 the price, why would you risk it at twice the price?

    Those coupon places would do a LOT better to offer a "limited menu" of really REALLY (like better than normal) quality, but not the full menu choice.

    I mean, by almost giving away a simple but totally excellent meal, the couponer might walk out thinking "geeze, that was the best toasted cheese sandwich that I have ever eaten. I want to come back next week and see if the lobster is just as good".

Login or Join to leave a comment
Login Join