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Grouponitis

My friend Ralph and I were having a discussion a while back and he said something profound that made me think about it several times since then.  He pointed out the problem with using Groupon to market your business.

He explained that when consumers use Groupon for a product or service, they may feel good about the deal that they just received, but they also will likely associate that good or service with the price that they paid.  Here lies the problem.  If you get a nice meal for your family for $30 at a restaurant you've never been to before, you likely won't feel good about visiting that restaurant again at a later date and getting the same meal with a bill for $50.  So, in essence, by offering your goods or services at a discounted rate, you are inevitably setting the value in the minds of the customers that take advantage of this rate.  So, while you may certainly generate some extra business at a minimal profit, you won't likely gain any repeat customers.

And, he's right.  I have personally experienced this where I have not returned to a restaurant after our first visit with a Groupon in hand.  It was at ReRico Brazillian Grill. Well, actually I did return but only with another Groupon in my pocket and I haven't been back since.  And, my failure to return has not been for any lack of quality or quantity.  With excellent food and all of it you can handle, they have both mastered.  It's because I'm in no hurry to go drop $50+tip for a meal.

Contrast that with my experience of having first shopped at Devo (olive oils and balsamics) before I knew of Groupon.  Yes, it's pretty expensive but we loved the quality and it opened us up to new recipes and some fun experimentation in the kitchen. One day I bought a $25 Groupon for $50 at Devo. Score!  But, I've shopped there since then, too.  The difference?  The Groupon didn't set the value since the value had already been set in my mind.  And, that's just it.  This is a matter of perceived value.

So, since this initial conversation, I've given this much thought and wondered how this may apply to other areas of our lives.  For example, teenagers with new driver's licenses might "peel out" in their cars, "power brake", skid to a stop, or otherwise quickly ruin their tires.  Make that same teenager purchase his/her own set of new tires and you'll find that same young driver all of a sudden with a new found sense of content with driving responsibly.  The teen simply didn't value the tires until they were made to shell out the $500 +/- it takes to replace them.

Worse than the tires, is when people fail to value services.  Failing to value goods can have detrimental effects, sure.  However, services have people directly tied to them.  So, it's even worse because now it's not just a failure to value something.  It's a failure to value someone.  And, sadly, it's not usually the intent of the person to offend or to fail to value a person, it just works out that way due to how they have been taught (or taught themselves) the perceived value of a service.

Allow me to use someone with a Bachelors in Information Technology (computer guy/gal).  It doesn't take long after people finding out what they do before they're asked "Will you look at ______ for me?  I've been having trouble with it?"  The only problem here is that usually this is being asked in the sense of doing a favor for a friend.  In other words, there is no intention of paying the person for their work.  Never mind the fact that they literally paid thousands of dollars and spent hundreds of hours on training to be able to know what they know.  Sure.  Go ahead.  Ask them to do it presumptively for free.

IT professionals are not hardly alone in this phenomenon.  This scenario plays itself out all the time across all kinds of different skill sets.  Artists get asked to help with painting projects, hair stylists get asked to cut/color hair, mechanics get asked to perform auto repairs, people get asked to babysit, musicians are asked to entertain, people with trucks get asked to help move, etc. (I realize that owning a truck isn't a skill, but I think it still qualifies to be in the list of things you get asked to do for free based on something you have that others may not.)

So, can we not ask our friends and acquaintances for help when we need it?  Of course, you can.  But, recognize the actual value of a good or service (not just your perhaps flawed sense of perceived value) and be prepared to pay for it.  Offer to pay for it.  If the friend wants to discount his/her own service/goods then that's another thing entirely, but certainly don't suggest it yourself.  Also, be prepared for the person to decline.  Your relationship is more valuable than the good or service for which is being asked.  If asking a friend for goods or a service, try to provide a reasonable way out.  Keep in mind that it's difficult to say no to a friend even if there is a multitude of perfectly great reasons for declining.  If they seem reluctant to accept, it's because they're probably searching for a good way to decline without hurting your feelings.  Take the hint, don't pressure them, and let them off the hook without applying any guilt.  And for crying out loud, do NOT take offense because someone won't do something for you.  What a lame and self-righteous reason to have an issue with someone.

I recently had an epiphany about value.  I used to believe that the value of something was set solely by what the market was willing to pay for it.  I no longer believe that.  While this is true to some extent, the value of something is also, if not primarily, set by the owner's reluctancy to sell the item.  For example, there is no "blue book" value on a 1942 Buick with no engine.  However, if the owner won't sell it for less than $2,000, then the value is $2,000, regardless of what the market is willing to pay.

The cost of failing to recognize value in goods in the marketplace may result in having to needlessly replace them or simply having to go without them.  The cost of failing to recognize value in services in the marketplace will make you a bad customer or not a customer at all.  The cost of failing to recognize value of goods or services among friends is loss of friendships.  It can become a wedge in the relationship that eventually, if not immediately, ends it.  Nobody wants that.  Don't let Grouponitis invade your relationships.  Value things.  Value service.  Above all, value people.

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