On­line deal vouch­ers frus­trate

Central Leader - - YOUR PAPER, YOUR PLACE - SU­SAN EDMUNDS

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.

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