Referral Marketing: What’s Left After the Deal of the Day is OverVouchFor!

Referral Marketing: What’s Left After the Deal of the Day is Over

Posted on September 26, 2011 by John Stewart

At Vouchfor!, we get asked a lot to compare the ROI of our product to that of daily deal sites, like Groupon and LivingSocial. We always answer this question very simply: there is no comparison.

We’re still in a recession and, understandably, most businesses are looking to get the most bang for their buck when it comes to marketing expenditure. And, as the industry becomes more and more saturated, it’s hard not to be influenced by the constant TV ads and aggressive sales tactics that many daily deal sites employ. But what value are these sites really adding to your business? Not much, if you ask actual business owners.

While you may see a short-lived spike in sales, daily deals may actually harm your company’s reputation and growth potential in the long run, according to The Wall Street Journal. A recent study from researchers at Boston University and Harvard found that Yelp reviews of businesses posted prior to Groupon offers changed little from month-to-month. The average rating was 3.71 stars. However, the average rating after the companies offered Groupon deals was 3.59 stars. This is very likely because discount offers attract consumers who might not otherwise be interested in a particular product or service, thereby leaving Groupon customers less satisfied than other customers.

In addition, consumers tend to view companies that offer coupons of any sort as less valuable brands vs. companies that do not. Have you ever seen a coupon for Google or Gucci? You may have also noticed that after a string of articles like this appeared in the mainstream media recently, this convenient study popped up. Our thoughts? Crisis management is an important part of any PR team’s job.

So, how is Vouchfor! different? For starters, it harnesses social media to promote referral programs to already loyal customers. And, because the new customer was referred directly by a friend, they’re four times more likely to buy and keep buying.

Our CEO, John Stewart, said it best:

“Businesses are becoming increasingly frustrated with daily deal sites, which offer a quick spike in customers, with questionable retention rates and long-term business impact. In reality, 65 percent of all new and lasting business comes from real person-to-person referrals. When you combine that knowledge with social media marketing and an extremely efficient and easy-to-use cloud back-end, you’ve got a product that will show immediate ROI.”

Bottom line: be smart with your marketing spending. Choose tools that show clear, proven ROI, and will help you retain loyal customers. These are the kinds of tools that will aid in the growth of your business for the long term. Even when there are no coupons to be had.