Here are a few things I have to say about Group Buying websites.
Many people, friends, family members, clients and colleagues have asked me why CMS hasn’t gotten into the so-called lucrative marketing technique yet, that gets you tons of exposure for next to nothing. For the longest time, they couldn’t understand why I was adamant about never doing a group buy deal. Stubbornness can be a blessing and a curse, however my thoughts about this as a business decision will never change, and now, people are starting to understand why.
I’ve used group buying websites before, let me tell you what I have purchased. I just got married on August 14th, and my wedding wouldn’t have been the same without my veil, which I happened to purchase from a lady named Martha who does veils as a hobby and decided to offer up a great deal, $24 for a $60 veil. I snapped it right up! Now, when I went to Martha’s website, I could make any veil I wanted, but if I wanted to add piping to it, there was an additional $26 fee. Heck, I got a deal I figured, so I went for it. The veil did it’s job. If someone asked me where I got it, I’d tell them, and maybe Martha would get a new client out of the deal for full pop. But I won’t be using Martha’s services again, because I only plan to get married once and quite frankly, she wasn’t looking for repeat buys. She was looking for exposure and word of mouth referrals, coupled with up sell sales to her coupon offer. That was a good decision, both Martha and I won.
I have also purchased a 30 class pass to bootcamp located about 10 minutes away from my house, that expires in October. I paid $30 for it, and it’s supposed to be valued at $400 some-odd dollars. My girlfriend and I purchased it together, thinking we would get in shape, but we’re both busy, a little demotivated and great at making excuses. So, the owner of that business wins in 2 ways: he gets buys with no shows (or drop off rates), meaning I basically gave the guy $30 as did my friend, or, he gets people so hooked on the experience that they have to go back for the full pop once they can fit into their sexy jeans. This makes sense for him. If you don’t show up, he wins. If you show up and lose one inch or half a pound, he did something right and you’ll be back for more. He can’t do anything if you eat bigger meals or don’t come as often, he’s just offering you bootcamp.
I then purchased a restaurant voucher for a local joint in my area that had everyone’s pants in a knot. So, my husband and I went with a couple of friends and we tried this place out to see what the buzz was. I don’t drink but my friends do, and we ordered an appetizer. We paid $20 for a $50 voucher, so we thought we got a great deal, but because we ordered regular menu items that cost almost $50 themselves (and of course you could use one voucher per couple), we ended up forking over extra cash, so the restaurant won (and liquor wasn’t covered, which is a cash cow for restaurants). The restaurant won again, they got bums in seats but still got more money than what we originally paid for the voucher. I am sure most people who ate there would go back again, but I found the food to be nothing special and wouldn’t go back, even if the deal was 90% off! However they are still quite popular and my opinion hasn’t seemed to slow their roll.
And then, there’s the cleaning industry.
I’m a member of some forum sites that discuss our industry, best practices, what to do in certain situations etc. And it is unanimous on these forums that group buying is an industry plague. In fact, sadly I have read many business owners actually having to shut their doors for good because of the exhausting effect of a group buy program they ran.
Cleaning is a different beast. You are going into someone’s home, their castle, that they see every single day. Every imperfection – every un-straightened lamp shade, every crumb, streak and dusty baseboard is noted. When someone buys a group buy deal for cleaning, they expect that someone will come in and clean their entire home, top to bottom, for about $40. I’d believe in fairies quicker than I would believe in that statement! Everyone’s home is different, size, contents, level of organization, etc. A sweeping statement such as ‘3 hours of house cleaning’ means something different for everyone, however the expected outcome is always the same. A clean house. When I started this company, I did the cleaning myself. Clients were never happy with a surface clean, we won people over with our attention to detail. There is no possible way that we can satisfy someone in 3 hours for a first time visit, you need to spend the time to impress someone. When someone purchases a group buy cleaning voucher, they think their whole house, no matter the size, can be tended to in 3 hours. And if you even try to let them know that it could take longer, they will feel mislead since they purchased a voucher that entitled them to a housecleaning. If you don’t do housecleaning, you don’t understand why 3 hours is not enough time.
I’ve seen a bunch of companies in my industry do this. Quite frankly, I have no idea how they are making it work. It’s unlikely that a client who has someone over for 3 hours and gets a basic surface clean at best (if their house is already clean), would ever feel that their cleaning was so spectacular that they want to book a regular appointment with that company (which is of course the initial draw that the sales people use to get companies to sign on). Our clients are more discerning and sophisticated than that. They look at everything we do and let us know if anything, no matter how small, was missed. My idea of clean is different than yours. And we have had experiences in the past with clients who expected a miracle in 3 hours, and despite us telling the client at time of booking as well as putting it in our client service policy, people still expect perfection from you. So, for companies that offer these deals, I am sure they are fraught with stressed out employees who are overworked and overbooked, upset clients who expect more than what they got, and major cash flow issues, because unlike the restaurant, it’s hard to up sell a cleaning.
I’ve read reviews online of other companies that use this method frequently, and their quality has gone down and this experience has marred their reputation. We want a fabulous reputation and know our clients want to deal with a company that values them more than a quick deal.
CMS clients won’t see us on a group buy website, but they can always expect terrific, detailed service at a slightly than higher industry average price. We feel that our clients who choose us and retain us feel the extra money is worth the piece of mind and satisfaction they derive.
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