By the way, wouldn't it have been nice if Shop.org partnered with Groupon and offered you, the loyal marketing executive, a sweet 50% discount off of the Shop.org conference registration fee? ... and did I see that Brett Michaels has a keynote at the DMA conference ... wow ... maybe the DMA will partner with Groupon and give you a sweet 50% discount so that you can hear that one on the cheap).
Well, I wasn't in attendance, so I cannot vouch for this fact ... but I'm told that it was said that losses on Groupon transactions are "made up for" on the next purchase.
This "truthiness marketing math" concept can work. Let's work through an example:
- You lose $3 profit on your Groupon transaction.
- You make $10 profit on the next purchase a discount-oriented customer places.
- -$3*(1-x) + $10*(x) > 0.
- -$3 + $3*x + $10*x > 0.
- $13*x > $3.
- x > (3/13).
- x > 23.3%.
- NOTE: The first posting had a rate of 42.9%, which was corrected by multiple readers.
Here's the problem, dear retail and e-commerce marketing experts:
- It can be a challenge for a retailer or an e-commerce business to get 23.3% of first-time buyers or discount buyer to repurchase.
If it is appropriate for your business, good for you!
But if it is not appropriate for your business, then question why the marketing punditocracy are shoving this business model down your throats lately ... stand up for yourselves and make sure that the marketing punditocracy share profitable ideas and tips!