Online deal vouchers frustrate
Business owners are being asked: What price do you put on exposure?
It was reported September 22 that an Auckland pizzeria’s GrabOne offer had gone sour for customers who tried to redeem their vouchers.
That has prompted experts to warn that businesses need to fully understand the financial implications of running a potentially high-profile online deal. The deal websites take a cut of the price of any vouchers sold. There are a number of them in the market, including GrabOne, TreatMe and Groupon.
Jaswant Singh Minhas, the operator of the Shiraz chain of Indian restaurants, said offering a deal usually meant taking a loss. ’’GrabOne takes 20 per cent plus GST but a credit card processing fee, and then what you offer has to be at a discount of 40 per cent. I did it a number of times but found out it was a losing game.’’ He said he might usually make about $6 on a $20 main. But if he offered a GrabOne deal and had to sell it for $10 instead, then paid $2, plus GST and processing fee to the site, and his own GST on the sale, he would end up losing money.
Minhas said it worked well for a new business starting out, which wanted to quickly reach a lot of potential customers, and build its database. He said he would only recommend it in cases where there was an opportunity to upsell customers who came in with a voucher, or where a business had been able to get a supply of stock at a particularly low price, to make the deal pay off.
University of Auckland marketing lecturer Bodo Lang agreed it was something that had to be carefully navigated. ’’Small business owners are often not fully aware of the financial consequences of their alliances with voucher providers. Unfortunately, they then treat users of vouchers as second-class customers,’’ he said. ‘‘The lesson for business owners is simple: only sign up to voucher providers if you fully understand the financial implications. Treat customers who use vouchers as well as you would treat other customers. After all, these customers may become long-term, profitable customers to your business.’’
Tim Glatt, NZME head of sales eCommerce said GrabOne has been extremely successful for a huge number of clients, particularly in creating awareness and building business.
Frame grab from GrabOne’s website of deals advertised by Nelson Marlborough Institute of Technology.