How Top Tier Hosts Dominate in Competitive Markets

I keep hearing it everywhere – Scoopon deals are killing my business but taking my customers and outing them artificially in the hands of someone who needs cash now and is willing to work for a loss.

So I thought I would respond to this general tide of gloom by pointing out that Scoopon is not significantly different from “The Entertainment Book” that allows people to get services at a discount at lots of places around town. Its not really different in over all concept to shop-a-dockets or even a “loss leader” display at the end of an aisle in a supermarket.

The idea that you can give something away at below cost and still make money over all by on selling other things at the same time is not new or novel.

So please, nobody panic. Scoopon just does on the internet what we have already been doing everywhere else since some cave dwelling Neanderthal figured out that if someone wants something more than you do you can exchange it for more of what you want so long as your smell nice.

So I thought we could look at a local case study about how a top tier host responds to this new challenge. There a quite a few good examples that I could use, but the one that stood out for me on comparison was the case of George’s on Waymouth’s use of a Scoopon deal earlier this year. I utilized this Scoopon because I was surprised to see George using the service, but once I took a closer look at what he was doing I understood why this was a great move for his business and learned a lot about how a pro host makes the most of new and challenging competitive environments.

So there are lots of subtle elements to what was done at Georges, but here are half key things that they did that very few people using Scoopons do, that made the use of this new loss leading software work well for their business.

1: Specific Purpose: The voucher was for just a few weeknight dinner times only. The offer was used to build perception and awareness to extend into a new trade window. This allowed George to confidently open I these new trading hours knowing he would have enough turnover to necessitate the staffing and stock and to make it look busy for people walking past.

2: Strictly allow customers to use the offer only during the times that are specifically designated to demonstrate the new offer at its best. I tried to book in outside the set times. No go. They strictly booked in only on the new operating nights. This created a sense of demand and momentum around the new trade window and allowed the team to focus very specifically during these time windows on cultivating a new client base to use their services specifically at night.

3: Demonstrated the venue at its best in a cost effective manner: When we went to the restaurant to redeem the offer there was a set menu that allowed us to sample the whole menu – a entrée share plate followed by main & dessert samplers. This allowed the team there to give us a very cost effective sample of the whole service, maximising the chance we would find something that was a “need match” for us.

4: Premium service: The staff created a service experience that would be worth paying many times more than was paid. The psychological effect of getting such good service when we had paid so little made us feel like we really owed it to the venue to spread the word and return.

5: Personal: The owner greeted us personally on arrival, checked half way that we were enjoying our experience and asked for feedback, and, at the end of the meal, delivered an invitation for us to return again another time. This personal care left us feeling like we had a personal connection with the visionary behind the business and thus left us far more likely to return.

6: Clearly identifiable return incentive: At the end of the meal we were provided an incentive to return another time. The voucher was designed in a way that would identify us as a returning customer that was likely to become loyal.

Result:

Return: We were left far more likely to return to the venue.

Recommendation: We were given tools and the personal connection confidence to make a personal recommendation of the business to others.

Referral: We were given an experience that we would want people we know to experience and the information required to link them to the business.

Its inspirational to see a host really embracing new technology that many people are upset about and using it as an opportunity to extend the scope of their business and the range of clients they can service.

I hope it gives you some food for thought.