My Competitor Made Some Quick Cash Today!

[Carl]

I'll admit this frustrated me bigtime! But what can I do? Business is business. I have to not worry about it and just continue to concentrate on running my own carwash as best as I can. The nearest express wash hooked up w/ Groupon today and gave this outstanding deal:

50% off their $12.00 Wash ($6.00 all day today)

But it's the second "deal" that blew me away and worried me that my car count might drop substantially over the next two months since this wash is the closest express wash to my site? Here's why:

Their second deal, good only today until midnight if purchased through Groupon:

$20.00 FOR TWO MONTHS OF UNLIMITED CARWASHING?!!! Gimme a break! I can't compete w/ that! (this is usually $40.00 for a two-month unlimited wash pass) but today, 297 people bought the $20.00 two-month unlimited wash pass and 107 people bought the $6 specially priced wash that's normally $12.00. That's 297 x $20.00 or $5,940.00 + 107 x $6.00 or $642.00. A nice quick fast cash payday of $6,582.00! (sigh)

How can businesses run like this and was it really worth it for this business owner to make such a deeply discounted offer? I guess if he wanted to get his car count up and earn some quick cash, the answer is "yes"?

Time to break out my archived Self-Service Car Wash News issue on Marketing Ideas and do something to counter such a huge marketing success strategy as my competitor did today...or maybe was he foolish to do this "Groupon" today and over the next two months, he'll be regretting this day? I wonder if Groupon gets a huge "cut" of that $6,582.00 he made? I'm not sure how exactly Groupon works if you as a business owner "signs up" w/ them. (gonna go research that now)

I know, I know...stop worrying so much about your competitor and worry more about giving the best service that you can, selling a great product at a fair price. Well, it's obvious my nearest competitor got in MY head today, huh?!!

~ Carl

 

[Bill Manke]

When you do groupon they usually charge half of your asking price. So basically instead of $6 for each wash they are actually getting $3. I think it is more of a marketing tool just to give people a chance to try the place. I was going to do the groupon deal using washcards as my promotion but when it got down to doing the deal the add looked to corny I decided against it.

 

[Carl]

Learned More About Groupon from the Internet

It's interesting, this "Beast" called Groupon! Just finished researching more about Groupon and small business, and now I'm understanding more why a small business would use them.

It's more about "advertising" then how much cash you make that day of your Groupon's sale. I think my competitor did a great job "getting the word out" that he has those "unlimited monthly carwash passes" through Groupon. As his competitor, I'd known about that availability from his website, but I've never really heard it advertised at all on TV or on the radio so I'm sure the word wasn't getting out about that "great money saving deal" which they always have available. But now using Groupon, he was able to get the word out there ALL ACROSS THE CITY through people's e-mail inboxes!

I also learned this tonight: If you sign up w/ Groupon, I think if your product normally sold for $10.00 then you use Groupon and they would market it at 50% off or $5.00 then Groupon gives you 50% of that income or $2.50 for your product which usually brought you in $10? But you gain all that advertising exposure and hopefully many new customers who will become return customers? Nope...I can say that I'm not comfortable ever signing up to use Groupon to help market my business! I just don't think it's for me but now I understand better the motivation of some small businesses to try this! - Carl

 

[Carl]

Yup!

Bill - I personally think you were wise not to do the deal especially if it ended up looking "corny". To me many times I kind of look at some of those Groupon deals and I say to myself, "Desperate!" "Gosh, I wonder if that business is hurting so badly right now that it needs the fast cash?" I also don't like how, IMO, it "devalues" your product or service but I might be wrong about that since it is after all only a "one-day sale". Thanks. - Carl

 

[Whale of a Wash]

While the ads did get the word out about the unlimited wash passes, Those come ons always attract the bottum feeders. The guy that will wash every single day to prove it was a great deal. The real test would be the converts to stay on the program, a low percentage. The bottum feeders never pony up any money. It would make more sense to target the customer with that deal as you have them coming thru the wash, and hand pick the good ones.

 

[Carl]

Bottom Feeders Drag You Down!

Whale of a Wash - Those are great points. They remind me of when I used to work at a medical clinic setting. In my position, I was aware of what type of insurance each patient had. What I couldn't help but notice was that THE PATIENTS WHO WERE ON MEDICAID were the least friendly, most bossy and who conducted themselves as if they were kings/royalty and they made the most demands (many of them unreasonable, arrogant and bossy) upon the doctor and staff that was a very caring group of people? It was as if they were "entitled" to more than anyone else. Makes me wonder if these "bottom feeders" you mention, will be of the same ilk and will really cause this carwash owner a lot of headaches as they possibly frequent his wash every-other-day! And lastly, it'd be a big bummer if the carwash owner noticed that most who purchased that 50% off, $20.00 2-month unlimited wash passes WERE ALREADY HIS GOOD PAYING CUSTOMERS WHO NOW ARE "SCREWING HIM OVER" since he put out "too good a deal". Actually, I just read the fine print again over there on his Groupon's rules and it says, "New Clients Only!" C'mon! How is he going to be able to police the fact that many who buy the two-month pass AREN'T ALREADY his customers and aren't "new clients". Can you imagine him going up to a new unlimited passholder and saying, "Hey! I've seen you wash here before! You're not a new customer. This deal was not meant for you. Unlimited pass revoked!" He can't do that so he'll have to "live w/ less" these next two months coming in from those passholders. UPDATE: Get this...he's carrying over his Groupon deal to a second day? It appears he likes the attention he's getting so at present, at 9:00 am on the 2nd day of his Groupon his count is now up to: 114 - bought the $12.00 Wash for $6.00 and 322 - bought this $40.00 Two-Month Unlimited Wash Pass for just $20.00 w/ 15 hours left of this sale. Apparently he's not at all looking at any possible negatives from this "sale" 'cause he's carried it on over to a second day? One thing's for sure, his lot's going to be very full these next two months, possibly full of "bottom feeders" which I'm sorry, but they are the worst type of customers to have "hanging around", I agree.

 

[Carl]

What Do I Know?!!!

Okay...I take back some of what I've said negatively about Groupon 'cause just for fun I Googled, "Car Wash" "Groupon" and "Carwash" "Groupon" and wow! SO MANY carwashes love using Groupon and they love what it's bringing them for their carwash business so what the heck do I know!

I saw one carwash in Austin, Texas that put out a $39 Groupon special for services which usually will cost the customer around $100 and get this...THEY SOLD 2,723 of the $39 Groupons in one day! (go ahead and you do the math!) GROUPON TRULY IS "THE BEAST"!

Kudos to those risk-takers out there who are more brave them me who embrace the latest the Internet has to offer then by way of the new Social Media. I'm not so brave just yet.

 

[Washmee]

Okay...I take back some of what I've said negatively about Groupon 'cause just for fun I Googled, "Car Wash" "Groupon" and "Carwash" "Groupon" and wow! SO MANY carwashes love using Groupon and they love what it's bringing them for their carwash business so what the heck do I know!

I saw one carwash in Austin, Texas that put out a $39 Groupon special for services which usually will cost the customer around $100 and get this...THEY SOLD 2,723 of the $39 Groupons in one day! (go ahead and you do the math!) GROUPON TRULY IS "THE BEAST"!

Kudos to those risk-takers out there who are more brave them me who embrace the latest the Internet has to offer then by way of the new Social Media. I'm not so brave just yet.

So the operator got $19 for a service that he gets $100 retail. He still has to provide that service, so I hope he costs are less than $19. Also, did you know that if one of those customers that bought the Groupon is not satisfied, groupon gives them a 100% refund and the wash owner is on the hook for another $19 to groupon? I guess I'm not that desperate yet.

 

[rph9168]

Deep discounts can be a double edged sword. Does it increase volume? Usually. Can you keep much of that volume without continuing the discount? Questionable. I was General Manager of a well established wash chain where for a long time we dominated the market. We had an individual open up two washes that started deep discounting from the very beginning. We did experience a drop in volume when the discounting started but gradually most of the lost customers returned. They felt that the discounted washes were simply not as good as what we offered. Eventually the competitor raised prices and we returned to normal volumes or better. Within a year both washes were sold at a reduced price.

Why did this happen? I felt he discounted himself out of business. In addition, his wash was inferior to ours as far as quality. We heard many complaints about poor service or a lousy wash. We redoubled our efforts to make sure our wash quality and service was excellent. It also helped that we were financially sound and could absorb some of the short term drop in revenues. Rather than trying to get into a price war I would suggest that you make sure you are putting out the best quality wash that you can. One phrase we seemed to use when people would ask why our wash price was higher than our competitors was that "They know what their wash is worth. We know ours is worth more." That sounds a bit smug but it was true.

 

[easywash]

Groupon Works

Carl, maybe he's not trying to make money on the 2 month unlimited.

Maybe he's just trying to steal your customers away and make sure they go to him.

If he sells a two month package on Groupon for $20 he is only making $10 so it's $5 a month.

That is definitely a loss leader to pull customers from surrounding carwashes and build his customer base. It's actually a very good move.

The Key with Groupon is you MUST do something to retain the customer once the promotion is done.

Our first time on Groupon we made about $6K in one day.

When each Groupon is redeemed we offer the customer a FREE Wash on their birthday and sign them up to our Rewards (loyalty) program so we get them on our mailing list.

Then we immediately offer them the same deal they just bought through Groupon but we sell it directly to them for the full Groupon Discounted Price and take 100% of the proceeds.

Just tripled my take on 1 Groupon Customer


There are hundreds of Groupon style competitors out there today.

Some take a much a 50% of the discounted price to as low as 20%. Most also charge 3.5% for credit card processing and a $20 fee it there is a chargeback.

The KEY is getting the customers details so you can market directly to them and bypass paying any sort of revenue split.

 

[pitzerwm]

If getting rich were easy, everyone and their mother would be in your way. You will have some sort of competition everyday. You must learn from it and adapt because it will not change.

Groupon, spawned a number of competitors but being first and maybe the best just sold for billions. I think that easywash, is making it work for him. If you also use Groupon, you will be able to cancel some if not all of the advantage that your competitor has.

 

[Greg Pack]

I was just going to comment that as a user of groupon and self-proclaimed tightwad, I have found it an interesting way to try new restaurants at a discount. 50% off is typical, sometimes it's even better. The place must be convenient to me to get me to purchase one, though. From the owners perspective, I can see where it gets new people in the door.

My slow season is Summer, that might be a good time to try groupon. My biggest enemies are dry bays that time of year, not tightwad customers. It wouldn't hurt to have some customers coming in using the facility. Perhaps we could retain a portion of them with a little discount.

Oh, and I like their quirky ads. It's a great way to trick someone into reading something they normally wouldn't.

 

[Carl]

Great Benefit to Customers!

Groupons are dangerous!

Ever since the date that I first started this topic, I've not been able to resist A BUNCH of Groupon's that have come into my e-mail inbox -- they are just too outstanding of deals to pass up!

~ bought 2 Domino's large pizzas which I can put up to 10 toppings on for just $8 each!

~ bought 1 - $10 coupon worth $20 value to a steakhouse restaurant just down the street from the carwash!

~ bought 4 - $6 coupons worth $15 each which allow me four visits to this new supposed "healthy" way to burn calories called "infrared sauna" (30 min sessions/each)

~ bought 4 - $5 coupons which give me $10 off my final meal ticket at a very good quality Mexican restaurant the other direction from my carwash!

I might need to "unsubscribe" from Groupon 'cause it seems like I'm buying more stuff now that usually I might not be spending on but actually, w/ the deep discounts that they are offering, it truly seems to become irresistible so one thing's for sure - Groupon's are a great benefit to the buying public! (and I'm sure they work great for certain businesses that know how to wisely implement them so that they help increase revenues in the "big, long-term picture")

- Carl

 

[MEP001]

How many of the Groupons that you bought took you someplace that you'd never been before, or might not have ever visited without the discount?

Of those that you tried for the first time, how many do you think you'll visit again?

 

[Carl]

Exactly!

MEP001,

Exactly! It's all about creating new opportunities that might blossom as very fruitful over having done nothing at all to create such a 'buzz' and 'excitement' and increased traffic to one's business.

Relieved to have quieted down my trigger finger and have opted to skip today's Groupons and copycat Groupon offers to today's mailbox inbox 'cause they're too far away on the other side of town for me to be as interested to purchase. But there's always tomorrow and new deals to come, I know!

Thanks,

Carl