from the editor’s desk: July/August 2011
Laura AikenFeatures Business and Operations Finance
Time is money
There have never been so many free ways to market your business.
There have never been so many free ways to market your business. As free as anything can be, that is. Your time is involved and sweat equity is as real an investment as money in the bank. Consider counting every hour you spend dealing with something that is free, just to be sure its benefits are in line with the time it takes to use it effectively. Net-savvy columnist Diana Coutu has done a great job of keeping Canadian Pizza readers abreast of the many digital sites out there that can spread the word on your business. In this issue, she gives us the scoop on Foursquare (page 12).
There are social sites and then there are the “deal” companies, who’ve faced a mixed reaction. Total digital donkeys to some; big-time customer grabbers to others. If you convert some new customers to lifers, that is a win-win, as Coutu has touched on in a past article about Groupon. You obviously don’t want to lose money, but it can be tough to decide how good a “deal” to make. I get Groupon and Dealfind e-mails daily, and on occasion have purchased a daily deal. I can’t recall one pizza offer in the past year, so general observations tell me that, at least in Toronto, pizzerias are not really jumping on the deep discounting bandwagon through these companies. There are a lot of restaurant coupons showing up in my inbox but more and more of these spamming specials are coming from other types of businesses, such as spas or car cleaning services. I bought one coupon for a Mexican restaurant and remember eating and trying to figure out how the place was making a dime off the deal they’d made, assuming they worked off the same slim margins as most others. Point is, be sure you’re making a fully informed decision looking at all angles including how much of your time is involved versus the reward.
Shouting slash-and-burn prices from the rooftops has its drawbacks, even if it offers initial benefits. Specials you don’t take a total bath on, and that reward customers and encourage them to return, are obviously better. I have a hard time believing that practically giving it away will get people to come back, mainly because it never works for me. There is always the danger of devaluing your product. If you make a great high-quality pizza and you’re proud of it, shout that from the rooftops. Price is the focus for value products, in general. One need look no further than Wal-Mart versus Holt Renfrew to see how each defines its niche. Wal-Mart tells you that by saving money you’ll live better. Holt’s is positioned as spending money to live better. Are you a Wal-Mart or a Holt’s? Mark Derbyshire, president of Holt Renfrew, was recently quoted in the Globe and Mail as working to wean shoppers off of the sale-only recession buying mentality, and will be offering fewer discounts. Food for thought, if you consider yourself more of a Holt’s type of enterprise.
A mass coupon can’t replace a customer loyalty program, but perhaps may be an avenue to find some new customers to convert into loyal ones. I just go back to my favourite places, whether they’ve ever given me a deal or not. But that’s just me, and I’m not every demographic. Part of deciding whether or not using these deal companies is right for you is knowing who you want for a customer and what you expect to gain from the relationship. Same goes for social sites like Foursquare. Getting a positive result requires formulating a strategy. And then treading very, very cautiously, if you choose to proceed at all.
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