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Groupon Marketing: 3 Lessons Your Small Business Can Learn From The Airline Industry

by Stacey Riska on April 15, 2016 1 comment

Is your small business thinking of running a Groupon?

Want to maximize the results your small business gets from Groupon marketing?

There are 3 lessons your small business can learn from the airline industry about Groupon marketing.

It wasn’t that long ago that almost the entire airline industry was suffering record losses in the wake of 9-11, with ever-rising fuel costs and ever-shrinking profit margins.

Today they are enjoying the polar opposite, with soaring revenues and record profits.

What can your small business learn from this when running a daily deal on a site like Groupon?

Here are some of the business practices that all business owners can model for their own success.

UNDER-PROMISE, OVER-DELIVER

Years ago, the airlines enacted creative measures to improve their on-time records and decrease the number of passenger complaints about late-arriving flights. A June 2009 US Today article quoted one airline operations manager as saying, “The airlines are no more on time than they used to be, but they’re better at covering it up.”

Even though the time that flights spend in the air hasn’t changed, airlines have made “strategic adjustments” (as the CEO of American Airlines called it) in their scheduling – otherwise known as “padding” flight times. That’s why a pilot can gush upon arrival, “We arrived 35 minutes ahead of schedule!”

Managing customer expectations like this is one of the key ways to customer satisfaction that you can emulate when running a daily deal.

I teach small business owners to¬†look at the long-term value of the customer relationship. You don’t want that daily deal customer to be a one-time transaction. You want it to be a relationship! The way you get that long term gain is to under-promise so you can over-deliver.

The biggest complaint from customers buying deals is that they get treated like second class citizens. Sometimes this is because the business didn’t structure their deal right and gets completely overwhelmed with response. In other cases it’s because the business sees the customer as an “expense” and therefore cheapens the experience.

Question: Do you make a habit of over-promising or over-delivering?

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CREATE UPSELLS

The airlines created billions of dollars in additional profits for themselves when they started making services that used to be standard for all passengers into “optional upgrades.” These include in-flight food and movies or wi-fi, and the two biggies: fees for checked bags and flight changes. Those two fees alone were responsible for over $10 billion in additional revenue to the airlines in 2014 alone (and since they are “fees” as opposed to being included in the actual fares, the airlines pay zero taxes on that revenue!)

By making checked bags an “optional upgrade,” that allows the airlines to use that as an incentive for passengers to purchase other services, such as “Get on free checked bag on every flight with membership in our High Flyers Club for only $300 a year.”

This strategy works so well for the airlines that they now find all kinds of “optional upgrades” to charge for, such as extra legroom, priority boarding, airport lounges, and even extra frequent flyer miles – adding billions of dollars in additional revenue to their bottom lines.

Question: What goods and/or services that are currently part of YOUR standard deliverable can you make into “optional upgrades” to bring you additional revenue from your daily deal?

USE JOINT VENTURES

The airlines reward all kinds of referral partners to help them sell tickets, including travel websites, event coordinators and good old travel agents (yes, some of them still exist).

As a small business, you could partner with other small businesses to create amazing packages and experiences¬†customers would love. Someone having their house cleaned would probably love to have a home cook meal delivered, a meal out, or a massage at the spa. These could be offered as one package with a daily deal and/or the businesses could partner together to offer specials and/or share leads to help each other’s business grow.

Question: What strategic alliances can YOU make with other businesses to encourage and reward them for promoting yours?

The airline industry figured out how to add billions of dollars in pure profits by creating “optional upgrades.” How will you incorporate optional upgrades into your daily deal package? Share in the comments below.

stacey

About Stacey Riska

Stacey Riska, aka "Small Business Stacey" is a serial entrepreneur who is passionate about helping small and local business owners get MORE: MORE leads, MORE customers/clients, MORE sales, and MORE money. She transformed her coffee and smoothie business from being $500K in debt to a 7-figure profitable business by using daily deal marketing. Now she teaches others how to skyrocket their business growth and get massive profits. When not saving the small business world, she enjoys sipping red wine, eating chocolate (who doesn't!) and spending time with her amazing husband.

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Stacey RiskaGroupon Marketing: 3 Lessons Your Small Business Can Learn From The Airline Industry

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1 comment

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  • Cath Cox - April 21, 2016 reply

    I only offer 60-minute massages in my Groupon campaigns so clients have the option of upgrading to 90 minutes for an additional $20 paid directly to me at time of service.

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