Here’s a cautionary tale about the potential problems using a service like Groupon…
…and how having too many customers can be a BIG, business-threatening problem…
“Groupon demand almost finishes cupcake maker”
In brief…
“Rachel Brown, who runs the Need a Cake bakery in Reading, Berkshire, launched an offer via the money-saving website in the spring in which she offered a 75 per cent discount on 12 cupcakes, which normally cost £26.
However Mrs Brown vastly under-estimated the popularity of the deal and was besieged by 8,500 people who signed up for the £6.50 bargain.
She ended up losing between £2.50 and £3 on each batch she sold. She also had to pay £12,500 for the extra costs of hiring staff and sending the products out, wiping out profits for the year for her business.”
Ooops!
My heart goes to Mrs Brown who I’m guessing is a decent, well-meaning person who is making a great product and like the vast majority of business-folk is doing her bit to create wealth and keep the economy going.
However, I’m guessing that she’s never read “The E-Myth” or any of its variants and she probably has never really studied marketing.
Big mistake.
“Rich Dad, Poor Dad” author Robert Kiyosaki likes to say…
“People think that financial education is expensive. Try financial ignorance.”
…and I suggest that the same applies to marketing and business education, if not more so.
So, what could Rachel Brown have done to turned this promotion into a profit-maker rather than a near-death experience? Some suggestions…
…send “Thank You” cards at “Thanksgiving instead (with an OFFER of course).
…over at “CopyDoodles”…
It’s time for our monthly look ahead at events that can be used for marketing promotions and campaigns…