As business owners and marketers, we’re looking for ways to create a solid cash flow.

Everybody likes a good deal so it’s worth taking a closer look at something like Groupon, right?

But if all you can come up with is a sorry-ass excuse for a daily deal, then the economy isn’t ruining your business.

You are ruining your business.

Don Corleone wouldn’t approve if that happened, so let’s look at how you can make an offer that nobody can refuse.

The Cold Hard Truth behind Groupon Deals

Groupon is huge. The company saw its revenues sky-rocket from $33 million in 2009 to $760 million in 2010.

Unfortunately, merchants haven’t experienced the same level of success.

It wasn’t even close.

Roughly one out of three merchants failed to make a profit.

Between 10% and 77% of merchants would run a deal again, a far cry from Groupon’s claim of 97%.

What if customers return to become loyal customers?

That would make running a deal worth it, right?

Yes, except customers aren’t coming back.

Groupon has become like a railway network.

Each train represents one day with fresh offers.

Each station has merchants offering deals.

Customers get off the train at each station and don’t stick around.

They board the next train and ride to the next station.

Add in the finding that 82% of merchants are unsatisfied.

As well as a couple of bad experiences here and there.

Suddenly, marketing on Groupon sounds like a bad idea, right?

Not so fast.

Groupon Doesn’t Run Your Business

If you fail at a Groupon deal, it’s not Groupon’s fault.

Groupon doesn’t run your business.

You are responsible for your business.

You are your own Godfather.

Like the Godfather, you know what’s in the best interest of your business.

You know what makes your customers tick.

The Psychology behind a Good Daily Deal

Everybody likes a good deal.

It’s getting something at great value.

It’s something worth sharing with others so they can get in on it as well.

When you offer a good deal, you’re triggering people to take action.

At the same time, you want to impress.

You’re looking to make people feel special for taking you up on your offer.

You’re aiming to provide people with such an amazing experience that—even at the regular price—your product or service is a steal.

That’s how you create loyalty and encourage word-of-mouth promotion.

When you only focus on attracting new customers through deep discounts, you’re diluting your brand, your product/service and—in some cases—even your entire industry.

Imagine you’re running a nail salon and you’re offering a manicure/pedicure deal at 50% discount.

Where does that leave you once the deal ends?

Potential customers might not even consider visiting your salon (again), because their value perception of a treatment has changed.

Don’t treat a daily deal offer as a quick way to make money.

Your daily deal offer should be compelling to both new customers and existing customers.

Remember who your existing customers are.

Your best customers are among them.

It’s up to you to not alienate them or make them feel cheap.

Focus on creating a deal that triggers action and creates loyalty.

How to Make an Offer Nobody Can Refuse

Here are three considerations to help you create a Godfather-worthy daily deal offer.

1. Create Excitement

Offer a deal that people can genuinely be excited about.

Make it go viral by giving it personality and making it special.

Make your offer so unique and remarkable that people have to sign up and share it with their friends before it’s gone.

2. Deliver Value

Everybody wants a good deal.

Nobody wants to feel cheap though, especially not your existing customers.

Give people at least one good reason to want to come back.

Make your offer (and delivery) worth even more than the regular price.

Focus on proving your worth and creating loyal customers.

3. Offer a Bonus

Discounts are evil, because they change your customer’s price perception forever.

Consider offering a bonus.

Try offering something like “buy one, get one free”.

It works out to be the same as offering a 50% discount, but with two key differences:

• You won’t dilute your brand or your product/service. People will still pay the full amount for the first time, but they’ll get the second time as a bonus.
• You’re guaranteeing repeat business. Even if the second time is free, people are going to come back and you’ll have a second chance to stay top-of-mind.

Bonuses work well because people perceive them as things that would normally cost extra.

The only condition is that the bonus has to be something your customers would actually want.

It could be a second treatment, a free gift, a free trial, a month’s membership, or a related product or service.

As long as it offers true value to your customers.

Bottom Line

Offering a daily deal should be about more than just slapping a discount on your products or services.

Your business deserves better than that.

Work hard on creating the right offer and your customers will come. Again and again.

Technology has humanized the user experience by making it easier for people to communicate and share information.

Meanwhile, many businesses have used technology to go in the opposite direction, to dehumanize.

Look at customer service, which has sadly become a (near) robotic experience at many companies. Look at email marketing where companies send emails from an email address like “please-do-not-reply@we-hate-getting-email-from-you-com”.

Put aside all the usual stuff about social media offering great opportunities to promote your products, overturn negative experiences and build long-term relationships.

First and foremost, social media is a call for humanization in how you communicate. Social media has humanized interaction, technology has humanized the experience, but only you can humanize your business.

Here are 30 questions to ask yourself to help you humanize your business:

• How do we communicate?
  • Are we communicating in a human way?
  • What do our customers think of the way we’re communicating?
  • Are we consistent in the way we communicate?
  • Are we speaking the same language as our customers?
  • Are we enabling our customers to engage with us in a community or a dialogue (as opposed to a monologue)?
  • How do we go about transparency, authenticity and accountability?
  • How does our company culture support the humanization of our business?
  • How can we change or improve our business processes?

• How do we turn experiences into relationships?
  • How do we define our customer experience?
  • What are the things that truly matter to our customers?
  • How well are we communicating compared to other companies within and outside our industry?
  • How can we involve our customers as part of our brand?
  • In which ways are our customers sharing experiences and information about us?
  • Why are they sharing those particular experiences and pieces of information?
  • How can we promote positive interactions?
  • How do we deal with negative interactions?
  • How can we scale our communication to deal with a growing amount of customer interactions?

• How can we create value for both our customers and our business?
  • How can we leverage customer interactions for the benefit of our business?
  • How are we measuring our success in customer engagement?
  • Are we recruiting the right employees to help us humanize our business?
  • How can we empower our (first line) employees to represent our brand?
  • How are we rewarding our employees and our customers for contributing to our brand?

• How can we innovate?
  • How can we build or strengthen our customer community?
  • How can we match our products and/or services to the demand, expectations and values from the market?
  • Can we work with peers and/or competitors in our industry to provide value to the community?
  • How do we integrate online and offline communication to create a better customer experience?

I also made a SlideShare presentation with the 30 questions:

What are other things businesses can think about to humanize their business?

Photo credit: Aaron Bulger

I don’t question the count, I question the messaging. It’s always been made to sound as if those 600-whatever million people are unique users. They’re absolutely not all unique and I’ll explain why.

The Effects of Social Gaming

One of the causes for duplicate account creations is social gaming. Facebook is free and the majority of the games is free, so there’s effectively no barrier for people to create multiple accounts to play social games. To illustrate what I mean, I’ve taken screenshots of people playing the game “Madden NFL Superstars”. Take a look and don’t tell me they’re dedicated personal accounts.

These probably aren't the real Pittsburgh Steelers.

Clearly, this is Cory's "gaming account".

This one's clever. Use some chick's beach photo and boom: 3,500+ friends!

Yes, we get it, Shawn plays Madden.

Facebook and Social Gaming

I don’t know how many duplicate or fake accounts there are and it’s impossible to determine that anyway. It’s far more interesting to understand why it matters. Social gaming on Facebook is huge:

• Over half of all Facebook accounts are used to play social games.
• There are over 50 million daily player accounts and close to 300 million monthly player accounts.
• Fifty percent of all log-in sessions on Facebook are for gaming purposes.
• Twenty percent of social gamers have paid money for in-game benefits. The most conservative projection I’ve found has the worldwide social gaming market exceeding $1 billion this year.
• The top 8 games on Facebook average at least one million daily players and 10 million monthly players.
• Facebook dominates social gaming with a market share of 28%. There is still potential for the social gaming market to grow within and beyond Facebook.

The Marketing Challenge

The way I see it, the rising popularity of social gaming presents a double-edged marketing challenge:

• On the one hand, the growing interest and activity in social gaming provides new monetization opportunities. With the addictive nature and time commitment involved, branded games and/or virtual goods also offer opportunities for frequent and intense brand engagement.
• On the other hand, the low barrier for playing social games renders a portion of the player base unmarketable. Demographic profile information is often incomplete or incorrect and this makes it difficult to understand the player population accurately. Moreover, underage children are also part of the player base and that makes monetization more difficult.

The Bottom Line

Don’t fall in love with the sheer volume or the absolute numbers. Get an understanding of the make-up of these numbers and how they apply to your business and your customers.

Let’s take a closer look at Facebook advertisements, how well they perform, what you should be doing and what you definitely shouldn’t be doing.

Three Forms of Exposure

As a brand, you can achieve three forms of exposure on Facebook:

• Advertisements These are ads with a link to either a landing page or a Facebook Page.
• Social Impressions These are ads with a link to either a landing page or a Facebook Page, but with the addition of the names of friends who like the ad.
• News Items These are items from a brand that appear in a person’s News Feed.

Facebook Advertising Effectiveness

According to data from Nielsen, having only an ad doesn’t result in very high recall, awareness or purchase intent. In fact, the numbers are awful for only “paid media”. Social Impressions and News Items can be considered “earned media”, because your friends have liked the ad or you have liked the brand’s Page to receive news updates. The addition of Social Impressions and News Items boosts recall, awareness and purchase intent of ads.

It is also important that Social Impressions and News Items appear frequently. Recall, awareness and purchase intent of the ad increase with the frequency of Social Impressions and News Items. This is encouraging, because it infers that active engagement with fans results in higher ad effectiveness.

However, caution should also be exercised. Recall, awareness and purchase intent say nothing about someone actually performing an action. Data from Webtrends and Chitika reveals that Facebook ads have horrible click-through rates.

There are multiple theories as to why Facebook ads suck in performance. In talking to people, their thoughts included “advertising simply doesn’t work”, “people don’t notice the ads”, and “brands don’t take the right approach to advertising on social networks”. Personally, I think the ads’ performance sucks because the ads themselves suck.

What Should You Not Do

With a growing number of advertisers and advertisements, there’s also increasing competition in the “war for eyeballs”. If you choose to advertise on Facebook, the ads need to be conspicuous, relevant, valuable… and correctly spelled.

Thanks to Rich Harris for letting me use some of his screenshots!

Getting the Most out of Facebook

Here are 5 steps to help you gain more effective exposure on Facebook:

1. Gain Organic Impressions Get people to like your brand’s Page. Whether you employ offline methods, online methods or Facebook ads to get people to like your Page, having those Fans will increase your exposure through News Items.
2. Engage Frequently Post at least once or twice each day on your Page to gain frequent exposure. Buddy Media conducted research on Facebook Wall engagement by businesses, but your mileage will value. Evaluate the feedback you get to understand the effect of frequency on your brand’s exposure. Remember that people can still hide your updates if they’re annoyed by them.
3. Drive Engagement Use Page updates to acquire feedback on your products/services as well as your social offerings. Engage actively to understand how Facebook makes the most business sense to you.
4. Relate Ads to Behavior The limited space and attention span of an ad makes it difficult to be compelling. Unlike Google AdWords that target users who are actively searching for something in particular, Facebook ads are often displayed based on a person’s profile information. The lack of immediate relevance is an important cause of lower click-through rates. Instead of targeting people based on demographic information, focus on an action someone is performing inside Facebook. For example, if they’re playing a game that’s similar to your game, you can increase your click-through rates by advertising when people are playing that game. Another example is to advertise your shop when people are visiting the Page of a brand you sell products of.
5. Create Natural Transitions When possible, create natural transitions from an ad to the eventually desired action. One way to do this is to have the ad direct to a specific landing tab on your Facebook Page. From there, you have more space and time to drive action, e.g. signing up for your newsletter or going to a landing page on your website.

A panel of judges determined the top entries and the eventual winner. This is where the campaign fell flat. The entries that were chosen as best entries sucked. They lacked edginess and creativity (some slogans had already been used by other airlines). The winning slogan was “That makes you happy”. That’s not just bad, it’s pathetic.

The way I see it, there are two outcomes. First, there’s a short-term outcome: Transavia are stuck with a sucky slogan. The long-term outcome, however, may be even worse: fewer people will be inclined to participate in the future now that their mental image of the brand has been affected.

When you set up a clever campaign like this and employ the wisdom of the crowd, you expect it to deliver some clever outcomes. When you intervene in the process, it’s because of something unlawful or because of something that’s out of character for your brand.

How you do things as a brand is determined by who you are and what you do. In the case of Transavia, that’s being lame and unexciting.

The extent to which social business is going to work out well for you depends largely on what you aim to achieve with it. Take the time to develop comprehensive goals and objectives. Use the results from the Analysis phase to establish a baseline which you’ll use to formulate goals/objectives and measure them against.

Here are some questions to ask when you start thinking about goals and objectives:

• Which goals/objectives need to be achieved?
  • What are the expectations of your customers?
  • What quantity is expected?
  • What are the levels of quality that you’ll distinguish between?
  • What levels of quality are acceptable?
• What is the time-frame?
• What is the available budget (for people, training, technology, et cetera)?
• What are the expectations in regards to ROI?
• Which KPIs are important to your stakeholders?
• How do these goals/objectives tie into existing corporate goals/objectives?
• How are we going to compare social business results to “traditional” (online) marketing results?

Remember that social business is just as much about “social” as it is about “business”. Your goals and objectives shouldn’t only aim at your business but also at your customers. What is your social business manifesto going to look like?

Here are some guidelines to help you develop goals and objectives as well as a social business manifesto:

• Focus Know what matters to you. Be where you need to be. Don’t talk to a void.
• Brand it Make sure your social business efforts are well-branded so they’re recognized by your community.
• Be consistent Manage both your community’s expectations as well as your own in terms of interaction (form, frequency, tone, et cetera).
• Go beyond Social business should be an extension of what you’re already doing. If it was the same, then there wouldn’t be any added value. Look at what social business can do for you what other activities cannot.
• Provide value Give to your community, this could be physical (e.g. samples), emotional (e.g. relationship-building), financial (e.g. discounts), intellectual (e.g. white papers) or anything else that is of value.
• Be human Remember the social aspect and incorporate the human aspect.
• Leverage Your social business efforts should focus on leveraging the strengths of social media and communities.
• Drive action Make sure your efforts move people to do something. Whether it’s a click, a comment, a purchase or something else, point them in the direction that makes business sense to you.
• Measure While some aspects of social business are difficult to measure, strive to establish metrics for everything you do.

I’ll be back with an announcement next week. Until then, comments and questions are welcome as always!

Social business is not a “marketing shortcut”, i.e. requiring low time and money investment while paying high dividends in branding and sales. For social business to be effective, an investment proportionate to it will be required.

But how much should you invest? The short answer is “That depends”, but I’ll try to give you some direction here with a number of examples on three levels:

• High-Level Strategic activities such as social business strategy. customer/brand planning and integration with corporate (marketing) activities.
• Mid-Level Operational activities such as organizational roll-out, presence management and brand monitoring.
• Low-Level Day-to-day tasks on platforms like blogs, Twitter and Facebook.

High-Level

Social Business Strategy: $20,000 – $200,000

Includes:

• Analysis of the company’s social business position
• Determination of goals/objectives and related metrics
• Mapping of goals/objectives to strategic initiatives
• Aligning of strategic initiatives with current company activities
• Plan for internal approach (required people, technology, policies)
• Training and coaching

Obviously, the range is huge but you can imagine that it really depends, for example on your company’s size, your current social business position, the existing expertise and what you’d like to achieve with social business.

Mid-Level

Community Engagement: $10,000 – $40,000

Includes:

• Training and coaching in social media monitoring
• Training and coaching in social media presence management
• Training and coaching in social media communication and engagement
• Training and coaching in content creation
• Training and coaching in social media measurement

A lot of the cost here will depend on your strategy and things such as your current knowledge, the complexity of your market, the amount of corporate branding that needs to be aligned and the extent to which external parties (such as agencies) are involved.

Low-Level

Blogging: $10,000 – $40,000

Includes:

• Creation and styling of blog
• Creation of content
• Interaction
• Search Engine Optimization
• Training and coaching

Facebook: $6,000 – $30,000

Includes:

• Creation and styling of Facebook Page/Profile
• Creation of content
• Interaction
• Training and coaching

For both blogging and Facebook, the investment will depend on whether you’re building something from the ground up or whether you’re looking to restructure something that already exists. In addition, the amount of content and the decision to create or outsource content will play a role.

Let me be clear that these figures are purely indicative and a result of my own experiences and that of people I asked. However, I think these figures are realistic and should give you a rough idea of what it would cost to go into social business.

If you have questions or remarks, let me hear them in the comments!

The Fundamentals series continues the analysis phase with a mini-series on assessing the value and effectiveness of social business. This mini-series will cover the following aspects:

• Reasons to participate in social business (covered in parts A, B and C)
• Internal considerations (covered in parts A and B)
• Debunking myths (covered in parts A, B and C)
• Social business in B2B environments

Today, we’ll look at social business in B2B environments.

There’s one more misconception that I haven’t mentioned so far and that is that social business is more for B2C companies that B2B companies. While B2C companies and products gain more traction in social media—they have more customers after all—it is blatantly untrue that social business wouldn’t work in a B2B environment. I’ll explain why and give you some pointers on what you can do to make social business work in B2B environments.

They’re Everywhere!

In B2B environments, the business is also conducted by people. People are increasingly on the social web and the social web spans across all age groups with increasing adoption by 35+ year olds. And why wouldn’t you expand your efforts on trade shows and in trade publications to finding your customers online?

More importantly, social business allows B2B companies to focus more strongly on some of the key factors that really matter in B2B environments:

• Trust B2B sales typically require a higher investment than B2C sales and as such, deeper consideration. Trust plays decisive role in these considerations and the eventual decision to make the purchase.
• Relationship Social media enables people in B2B environments to have constant contact, building a relationship to establish rapport and trust. When dealing with long sales cycles, the effect of using social media can be profound.
• Information A relationship takes time to develop but information can be provided instantaneously. Providing the right information and/or high-quality content online—and distributing them through social media—helps improve your image and facilitate your prospective customers in their purchasing process.
• Loyalty What about after the sales? Social media gives you an opportunity to improve your after-sales relationship with the customer. Grab this opportunity to build loyalty and drive repeat sales.
• Protect I always advocate this and it applies to any business environment: protect your brand. You can decide not to engage on certain social media platforms, but do register an official account. You don’t want to have your brand hijacked on, for example, Twitter and causing you enormous damage.

Moving Forward

What can you do to help make your social business efforts more successful in B2B environments? Here are some pointers to get you in the right direction:

• Observe your customers Get an idea of what’s out there and what’s currently being said by your customers. If they are already sharing their opinions and/or experiences online, this is valuable feedback for you.
• Ask your customers Find out what your customers think about social media and how they’d like you to engage with them. This can be done with a survey or with one-on-one interviews.
• Work with your customers Include the right customers in your social business approach by “promoting” them to an advisory board. This gives you a foundation to work from and makes them feel rewarded for being your customer.
• Let your customers work for you Ask your customers to share their experiences with your company. This can be in the form of a media interview, a case study, a blog post, et cetera. You’ll generate interesting feedback and they’ll be able to take center stage by sharing their success stories.

The most important thing to remember, however, is that there is no single off-the-shelf approach that’ll work for everyone. Social business is still largely uncharted territory and the truth will reveal itself only through taking action.

If you have questions or comments, I’d love to hear them. Next week, we’ll start another mini-series as part of analyzing value and effectiveness by looking at caveats and pitfalls. See you then!

The Fundamentals series continues the analysis phase with a mini-series on assessing the value and effectiveness of social business. This mini-series will cover the following aspects:

• Reasons to participate in social business (covered in parts A, B and C)
• Internal considerations (covered in parts A and B)
• Debunking myths
• Social business in B2B environments

I’ve divided social media myths into three categories:

1. Adoption and Diffusion related myths
2. Engagement-related myths
3. Business-related myths

Today, we’ll look at social media myths related to your business.

A great number of myths and misconceptions circulate around social media. Here’s my attempt at clearing the air to show where we truly stand:

• Small businesses need to be on social media Social media can provide value for small businesses but they need to realize where that value can be gained. Is it Twitter or Facebook? Or maybe Foursquare is a better option?
• Social media is only for “cool” brands Again, social media can provide value to any company as long as you focus on the right people, the right topics and the right platforms.
• Social media can be done by interns Your younger employees might be more versed in using social media but are they also able to react to crisis situations as adeptly as upper level staff? Are they also able to tie the use of social media to the company’s business/marketing objectives? In my opinion, top-down support throughout the organization is needed to be successful internally.
• Anyone can do social media While there are no high barriers to entering the social web, there are professionals that have experience in applying social media in businesses. Find these people and let them help you. It’s very similar to SEO and web design; you could do it all in-house, but there’s expert help out there. We’ll get more depth into what matters when you’re considering the services of social business consultants at a later stage.
• Social media is cheap While many social media platforms are free or low-cost, creating accounts will only get you so far. There are more resources (time, people and money) needed to successfully create and implement a social business program.
• Using social media causes you to lose control over your brand Whether you’re using social media or not, people are out there and in control. They can talk about you whether you’re involved or not. Be happy that people are talking about you and embrace the fact that you can monitor—and act on—these comments and conversations.
• Social media ROI cannot be measured This statement’s not true either. Social media efforts can be measured, but do realize that the metrics involved are different. We’ll talk more about how social media measurement when the time is right.

If you know any other myths related to business, I’d love to hear them in the comments! Next week, we’ll look at social media in B2B environments, see you then!

The Fundamentals series continues the analysis phase with a mini-series on assessing the value and effectiveness of social business. This mini-series will cover the following aspects:

• Reasons to participate in social business (covered in parts A, B and C)
• Internal considerations (covered in parts A and B)
• Debunking myths
• Social business in B2B environments

I’ve divided social media myths into three categories:

1. Adoption and Diffusion related myths
2. Engagement-related myths
3. Business-related myths

Today, we’ll look at social media myths related to communication and engagement.

A great number of myths and misconceptions circulate around social media. Here’s my attempt at clearing the air to show where we truly stand:

• Social media is for broadcasting messages If this was true, it wouldn’t be social. This doesn’t mean that you can’t broadcast if it’s relevant to your network.
• Social media is about conversations It can be about conversations, just like it can be about broadcasting. The “social” in social media relates more to the content than the method of transmission.
• Consumer engagement is always the right thing to do There’s difference between doing something that can’t hurt and something that’s right. It can’t hurt to engage with your consumers, but is it worth it? If they’re wondering where they can buy your product, do you reply by chit-chatting about the weather? Be conscious about what you’re using social media for and you’re not using social media for.
• Social media is informal Twitter might come across as glorified text messaging, but not all social media is informal. There are bulletin boards, professional networks (like LinkedIn), and blogs that require more formal behavior and communication. In addition, the tone with which you communicate in social media shouldn’t deviate too much from the tone with which you communicate in your current endeavors (e.g. website, brochures, emails).
• It’s impossible to build relationships online I’ll admit that social media has changed the definition of “friend” to a certain degree, I don’t think it’s impossible to build quality relationships. On the contrary, social media enables you to build relationships with people you wouldn’t otherwise get in touch with in the first place!
• Set it and forget it You can’t create a Twitter account and expect people to come to you immediately. It’s like moving into a new house, telling nobody the address and expecting people to drop by. Fact remains that you need to put your presence out there.
• Social media is about quick wins While it’s possible to make a big splash quickly, there are many more long-term benefits. Social media is more about rolling a snowball down a hill than about making a big splash in the pool.
• Content is king I love this one. How many great books do you not know about? Probably plenty, right? How do you know they’re great if no-one tells you? My point is that content isn’t everything, it’s just the start. Distribution is the bridge with your audience that will make your efforts successful. Put your efforts into both content and distribution.
• Viral marketing is king This is a fun one too. Here the focus is on distribution but it’s always hard to predict virality. How do you exactly create a viral video? You don’t; the community decides whether your content goes viral, not you. Yes, there are factors that give you a better chance at success—and we’ll discuss some of them later this year—but there’s no such thing as off-the-shelf viral content.

If you know any other myths related to communication and engagement, I’d love to hear them in the comments! Next week, we’ll look at business-related social media myths, see you then!