Groupon knows what it’s doing. It’s no surprise they partnered with Expedia to create Groupon Getaways. I do wonder though, how the industry is faring with this. The hotels featured in these offers are surprisingly good for the consumer, and the hotels involved may fill rooms, but I also wonder if they thought about maintaining their brand’s image, and attracting the right kind of guests.
Take a look at this example of Jefferson Hotel, a Relais & Chateaux property, now seen on Groupon. This is a luxury property and even I was surprised to see this. As we know, high end hotels are reluctant to show discounting like this. Relais & Chateaux certainly pride themselves on maintaining a luxury brand. What I don’t know is whether they realized their relationship with Expedia would result in this kind of “extra exposure”. I am not saying Groupon Getaways is not a good marketing platform – for certain types of hotels it is.
Before you do your next Groupon or group buying site promotion here are some tips:
1. Know which sites your offer will appear on beyond the site you are promoting the offer with. For example, this Groupon is coming through Expedia. Did the Jefferson just work with Expedia and do they realize they are a Groupon? Perhaps it is just a way to syndicate content and the hotels are not involved in the decision. Make sure you know where your brand is going to end up. Know which sites have partnerships with others. Will your offer be syndicated or end up on other sites?
2. Know your target audience and make sure it is aligned with the site’s demographics.
3. Educate yourself on all the options. There are other group buying or flash sites that may be a better fit for your brand.
4. What is your objective? Do you want to quickly fill rooms or attract high quality guests? It is a quality vs quantity play.
5. Test small promotions on sites that fit what you want to do. All group buying sites let you cap the amount of room nights. When you find something you are happy with then offer more inventory. Do not try to go with a site that can offer mass volume because they have a lot of members when you don’t know how it is likely to perform or what quality it will create.
6. Think about your brand alignment. Does being listed on the site make my brand look better or not? The last thing you want to do is work with a site that will diminish the years of work that has gone into creating value of your brand in the consumer’s mind.
7. Think about your drive markets and which are the top cities guests are already coming from. Ask the site to give you a breakdown of subscribers by geography. I don’t know why Groupon is showing it’s Las Vegas audience a Washington D.C. hotel.
Travel industry friends, speak up on this topic. What do you think?
My back story: Creating the life you want
The highest compliment you can get is for someone to say that you inspired them to make a change and take the steps to create the life they want. Mandy Gresh and I worked together for 4 years. She was one of the people I interviewed with in 2005, and ironically she was the one I resigned to in 2010 when I decided to follow my next chapter. This year she too took the plunge and left her job to create the life she wants.
Every week Mandy features people who have inspired her and who are creating the lives they want on her blog. This week she asked me. Check out Mandy’s blog, My Six Months Off, to see the other people she has featured. I’m always fascinated by stories of what others have done to create the life they want. I’m so glad I inspired Mandy and honored to be part of this group. If you’re thinking about taking the plunge yourself, I hope I can inspire you too.
As told to Mandy Gresh for 5Q Friday for her blog, My Six Months Off
5Q Friday with Mindy Joyce
1.) Who are you?
I’m a lot of things; a marketer, idea maven, entrepreneur. I also love to travel and learn about wine. I’m definitely a risk taker. I was born in New Zealand and moved to the US when I was 21. Now 35, I’ve lived in Los Angeles, New York and now across the Hudson in Jersey City. My life during the week is in Manhattan, and I’m a Jersey girl most nights and on the weekends.
2.) What do you do/what’s your business?
First and foremost I’m an entrepreneur and like to collaborate with others to create meaningful businesses. In 2010, I created my own company, Sugarfly Marketing because I saw a need for a strategic approach to marketing using social media and PR. A lot of brands still can’t figure out how to interact with their customers through social platforms, or don’t have the resources internally, so Sugarfly was born.
Anyone who knows me will tell you I love wine, not just drinking the stuff, but can actually tell you a few things about it. And, I’ve also had a ton of years in or around the travel industry. About six weeks ago I was approached about an opportunity at a private sale site for wine called Lot18. The job was to create and build a business segment called “Experiences” (travel and winery experiences) for a community of wine and food lovers. If the stars would ever align in my career, this was it.
Now, I get the best of both worlds.
3.) Where do you do it?
My work life is based in New York. I’m also a student at the International Wine Center in New York where I’m studying for my Diploma of Wine & Spirits.
4.) When did you decide to take the plunge and “create the life you want”?
One of the toughest things to do in life (but of course all entrepreneurs go through this) is to say goodbye to a nice paycheck. I left my job in 2010 after a lot of hard thinking and finally came to the conclusion that 1. If I was ever going to have my own company this was the time; 2. I have nothing to lose/I’m still employable if this doesn’t work out; and 3. (my mantra) No regrets.
So, I resigned from my job on a freezing New York day in January and started wine school the next day. I did not have enough savings (stupid me) to fund my marketing company immediately, so I sold health and life insurance for a few months to beef up the bank account. Within 3 months I was in Jamaica as Sugarfly, and another month later I fell into another great client, the group buying site, BuyWithMe, followed by several other clients. My one piece of advice here is to really know what you are truly passionate about and be prepared to do whatever it takes.
5.) Why do you love it?
Unless you’ve had your own business this is hard to describe. It’s rewarding, it’s invigorating, it challenges you in so many more ways that a regular job ever could. I think I learned more about myself and to trust my instincts in the first year of business, than I ever have before. One of my goals was to work with people I truly respect and enjoy being around. This has happened time and time again. I just want to pinch myself when I get to meet the incredible people I do. The feeling of freedom to create your own life is probably the biggest reason to do it.
Wine tourism is increasingly being sought out by travelers. But, is the wine industry ready?
When you combine tourism with wine, what do you get? Well, it’s called “wine tourism”, “vinotourism” or “oenotourism”. It’s an opportunity for both the tourism and wine industries to connect. For this to happen, much of the wine industry may need to think about their businesses differently, as not only producers of wine but how they can enhance relationships with new and existing customers by delivering on great wine experiences.
It all starts with the consumer
Consumers these days are savvy and they want to know more about the wine they are buying that what is written on the label. Wine, is one of those purchases that tells a story, every bottle comes from somewhere and is unique to the region and place it was made. In the case of wine, consumers want to know where the wine comes from, the terroir or something about the producer.
There is nothing romantic or interesting about picking a wine from supermarket shelves – but, if that’s where the consumer wants to buy it then the wine industry should be thinking about how they can differentiate themselves by marketing the tourism aspects of their businesses and encouraging people to visit. Once they visit they will be a lifetime buyer of their wine.
So let’s take a look at the wine tourism industry:
At the global level, wine tourism is growing and is considered to be a driver for the economic and social development of many rural areas. This is a big deal. What other industry is fostering the economies in many of these small towns? It seems like an excellent opportunity for small communities to benefit from tourism dollars.
If we look at the US alone, the U.S. Travel Association estimates that 17%, or 27.3 million travelers, have engaged in “culinary or wine-related activities while traveling.” It is also good news when you factor in what they spend on travel (hotels, car rentals etc) as well as the estimated $3 billion they spend while they are in the region on wine and other items.*
In California, almost 21 million travelers visited wine regions in 2008, and Napa Valley alone received 5 million of them. What’s even more interesting is the money they spend and how the economy as a whole benefits. Napa generates over $1 billion dollars each year through wine tourism.** The potential for this to grow is strong: California’s tourism industry as a whole generates $95.1 billion per year.
Let’s look at the global situation. Last month, Great Wine Capitals Network recently unveiled the results of their global study at Vinexpo. This network represents 454 vineyards in 9 different countries and could be used as an indicator of the profile of the global wine tourism market.
Some interesting takeaways (granted, this is just an indicator as it is a survey of specific regions in 9 countries):
• The local/domestic tourism market is huge and equates to about 40% of wine tourists
• It’s still largely male dominated. Only one third of wine tourists are female.
• 75% are over 36 years old
• They travel in the best times of year: 70% of tourists come in summer, 15.3% in autumn (attracted by the wine harvest). This indicates that they may be less influenced by off season rates and more likely to spend to be there in peak season.
• People spend more in Italy and Napa: Average spend in Florence, Italy is €141 & Napa Valley, California at €131. Bordeaux was lower at €52.
So what are vineyards offering tourists?
83% offered a tasting, 75% offered a vineyard tour or a tour related to wine production, 40% offered a pairing wine with food or similar, 29% offered accommodation ( e.g. chambres d’hotes or gite).
Wineries are benefiting from tourism by selling more wine:
32% of total volume was sold by the winegrower on the premises
18% of local wine is sold in bars & restaurants, 16.8% at independent wine retailers (cavistes), 16% in supermarkets and 4.5% via online sales.
So on the winery side, for those not incorporating a tourism experience into their business, they should be. Packaging wine tastings and tours add value to vineyard visits and are what consumers want, particularly international tourists. This all benefits the winery by increasing the number of sales at the premises and increasing the average spend per visit.
The world’s wine-producing countries are taking this segment very seriously. The South African tourism industry sees the strongest growth and highest profitability in the sector of wine tourism. In 2009, wine tourism contributed €440 million to total tourist income in South Africa.*** In New Zealand, 37% of international tourists participate in wine tourism and spend more than other international travelers ($3,543 NZD compared to an average spend of $2,710 NZD). Malbec’s worldwide success has led to an increase in wine tourism in Argentina. Over 500,000 tourists went through Mendoza wineries, an increase of 68%, compared with the same period in 2009 and a 10.5% more than the national average.
Wine tourism is definitely on the rise. Wineries and vineyards need to consider what they are offering as the tourism aspect of their business and be savvy about marketing to the wine traveler. For many, this is an untapped business, but surely will help them ultimately drive more wine sales and generate lifetime customers. Regions and marketing agencies should be actively seeking out ways to raise awareness for their wine tourism infrastructure and engage with wine and food enthusiasts. This savvy audience spends more and is more interested in coming to rural areas to seek out unique and authentic wine experiences.
If you have any comments I’d love to hear them. Please post below.
Sources: * US Travel Association 2007 data, ** The Vine Route, ***Vitisphère – 20 April 2011
A year or so ago noone knew who this guy was. How did a 14 year old from a small town in Canada become a massive global brand in only a few years? I finally gave in a few weeks ago and watched his movie, Never Say Never. I have to say, I was impressed.
Then I got to thinking about the similarities between building a celebrity brand and building a startup. They both start from nowhere and there are a ton of challenges to face. There will always be people who say it can’t be done and it will never work. The truth is this stuff doesn’t happen overnight and every company that is successful has had to dig in and make it happen for themselves. There are a few things that Bieber did that if startups were doing they would see a lot more success.
Even at 14 years old, Bieber knew that uploading videos of his songs to YouTube was a way to get them into the outside world, to build a fanbase, and get discovered. Fast forward two years, and now the 16-year old has since received over 15 awards for his music, released 13 singles, been nominated for a Best New Artist Grammy Award and performed in Madison Square Garden. His videos now have over 1.7 Billion views on YouTube. He has 30 million fans on Facebook (and growing by 70,000 fans a day), and 10.5 million followers on Twitter.
Sure, it helps to have Usher on your side, and you might say that Bieber is an exaggerated case study but the messages are clear; not only this a story about talent (or in the case of a startup, a great idea), but it is about the power of social media, pure hard work, an unbelievable will to win and a ‘do whatever it takes’ attitude.
Lessons that can be applied to startups:
• Your audience dictates your success, not other people. Once you build a strong audience it becomes impossible for industry influencers to ignore you.
• Heavy reliance on social media. YouTube, Twitter and Facebook are all tools to build your fanbase and allows you to build a 1:1 relationship with each fan. Done well, this will be the most important marketing tactic you have.
• Be a real brand. Be authentic, show your ups and downs, give people the inside scoop to develop a deeper relationship with your brand. This is a relationship and you need to communicate. Even in the tough times you can build character and people will love you for it.
• Don’t just be an online brand. People need to see you in other places. They will react to the opportunity to have a deeper relationship with your brand. (i.e. Bieber’s mall appearances)
• Caring and behind honest. From responding to tweets, to giving fans surprise tickets and seat upgrades, Bieber showed us how to build buzz. What might seem like small gestures that are so easy to do, these meant a lot to fans and ended up getting magnified through social media.
• Get a great team around you that really cares and shares your vision. This is one of the main keys to Bieber’s success.
• Start by cultivating a small, loyal fanbase and using them to tell your story. The quality of your audience/fans is way more important than how many you have. Know your audience and be targeted. The quantity will come if you do this right. (Bieber is completely focused on the teenage girl segment and understands what they want)
• Take advantage of every PR opportunity. No PR opportunity is too small. To combat the disbelievers and radio DJs that refused to play his music, Bieber was on the road all the time, performing at radio morning shows, event in the smallest of towns….and of course, tweeting about everything you’re doing really helps. The city by city, small town PR approach actually does work.
• Set a big goal and aim for the top. An idea without goals or plan is just a dream. You need to set big goals and work towards them. (Bieber’s goal was to sell out Madison Square Garden, which he did in 22 minutes)
• An intense will to win. Be prepared to work 24/7..even when you’re sick.
• Align yourself with other superstar brands
• Attitude that anything is possible: Never say never
In the last few years, technology has changed the way America buys things. Yesterday’s New York Times article about Groupon’s success, Funny or Die: Groupon’s Fate Hinges on Words, once again highlights how tech companies are changing the way America buys. In only a few years, Google, Facebook, Groupon, Gilt Groupe and thousands of clones have transformed how people shop, and how businesses and brands sell products and services.
One industry that many of you know is close to my heart, is wine e-commerce. This is still very much an under developed space in the tech world, and if done right, is a gold mine of opportunity. But, why hasn’t someone really nailed it yet?
The size of the market is huge. The opportunity for wine e-commerce is estimated at between $30 Billion to $40 Billion in the US. This makes it larger than the music industry, or even larger than Hollywood’s entertainment industry, if you look at it on a global scale. In addition to pure wine sales, we can also look at sub-categories like Vinotourism. This is estimated to be a $5B business – again with no dominant players.
But despite these numbers, wine e-commerce is also known as a VC graveyard. It seems like a no brainer investment, but the industry is complicated and riddled with legal issues. There are so many companies that have tried without success. Alcohol is probably one, if not the most highly regulated products to sell in the US, and even makes the travel industry seem so easy. If we look at the most dominant players in US wine sales, Costco is at the top of the list, with 3% of the market and retail wine sales of $1.4B a year. It is interesting to see where America currently buys wine. The other interesting point here is that wineries that do have licences to direct ship to consumers in certain states, do not necessarily understand how to market themselves online and here comes the challenge for wine sites, especially flash sales sites. Just like the mom and pop merchants that Groupon has been able to educate on why they should embrace the group buying model, wineries are no different. There is still a disconnect with many wineries on how to reach today’s consumer and create demand for their businesses, hence there is an education challenge for many wine sites.
From a marketing perspective, the wine consumer is divided into three parts; the Wine Spectator crowd, a small part of the market but highly influential; the “two-buck chuck” crowd who don’t care so much what they drink as long as it’s cheap; and then everyone else. Everyone else is where the opportunity lies. There are 25 million people in the US that enjoy wine on a regular basis but don’t know enough about it. Although wine is not their primary passion, they will spend between $8-$80 per bottle. With a consumer that is becoming accustomed to online purchasing, flash sales and coupons it is certainly seems like a hot space to watch.
It’s not quite harvest time yet in the wine e-commerce business, but things are certainly starting to ripen. Just take a look at these players:
Flash sales sites to watch:
Lot18 – Recently closed a $10 million Series B round making total investment over $13 million. Investors include New Enterprise Associates (Groupon, CareerBuilder, Diapers.com) and FirstMark Capital (StubHub, TheStreet.com).
Invino – Formerly known as WineryInsider, rebranded in November 2010 as Invino
Gilt Groupe – although not a wine specialist, they have been showcasing opportunities for wine. With the recent launch of Gilt Taste this could be one to watch.
Cinderella Wine – Gary Vaynerchuk was quick to start this site after the huge success of Wine Library and his daily video.
Online retailers
Wine.com Over $40 million per year in wine sales
Wine Library – By 2008 Gary Vaynerchuk raised annual revenue in wine sales from $4 million to $60 million (and also launched flash site, Cinderella Wine)
Vinfolio - Sought bankruptcy protection in Jan 2010 and by May had landed an investment from Steve Case’s Revolution. Revolution also invested in LivingSocial and ZipCar.
Looking back at what I’ve already done in my career is something I haven’t really thought about until now. Most of us are so focused on what needs to happen today, tomorrow, next week and in the future, it’s not easy to look back and be grateful for all of those opportunities you’ve had already. A lot of times, the things we remember most are the moments, opportunities and friends we make along the way, not the actual work stuff.
We all know John Lennon’s famous quote: “Life is what happens to you while you’re busy making other plans”. I think it’s a good idea to stop sometimes amidst all the planning and acknowledge some of the magical moments and opportunities you have already had. I am so thankful for the chances I’ve had so far and all the people that have made these things possible. I hope this inspires you to think about the things that have happened to you.
My “I can’t believe I’m doing this” career moments: (yes these actually happened while I was working)
• Experiencing a zero gravity flight over the Gulf of Mexico
• Shaking hands with Martha Stewart at a restaurant in the Hamptons
• Driving a high speed boat from Anguilla to Saint-Martin
• Chatting with Suze Orman in the Today Show greenroom
• Learning how to race a 12 metre yacht on the America’s Cup winner, Stars & Stripes in St Maarten
• Touring Boeing’s final assembly plant in Seattle
• Mayor Gavin Newsom making an appearance at one of my events in San Francisco
• Walking through historic ports and abandoned resorts in the Caribbean with developer and ex-Disney Imagineer, Hugh Darley
• Chatting with LeVar Burton about plans for Historic Falmouth in Jamaica
Zero Gravity Flight:
On board Stars & Stripes in St Maarten
As seen on American Express OPEN Forum: 5 Biggest Mistakes Small Businesses Make With Group-Buying Sites
I’m thrilled to be a guest contributor to American Express’s small business site, OPEN Forum. I wrote this article specifically to help small business owners avoid the mistakes I have seen so many times through working with group buying and local deals sites.
Apr 21, 2011 -Group-buying or local deal sites like Groupon are meant to do one thing: attract first-time customers to local businesses like yours. But many small businesses using them are making some common mistakes.
We’ve all heard that using these sites can cause marketing disasters—that they could even put you out of business. Such cautionary tales represent a minority among thousands of success stories, and digging into those cases often reveals avoidable mistakes. It’s up to you to be aware of how these sites work, and how to ensure your promotion is a success.
I’ve spent a lot of time working with thes sites over the past year, and I’ve learned firsthand what works in these promotions—and what doesn’t. I’ve noticed five huge marketing mistakes. Take a strategic approach to avoid these tactics, and you’ll be very happy with group-buying and deal sites. And you’ll grow your business in the long term.
Mistake 1: Assuming Groupon will work for you because it’s worked for others
Groupon isn’t for everyone. Many businesses go there first because of brand recognition—but more than 500 Groupon clones do the same thing. Make an educated decision about which site is best for your business.
Consider:
- Your geographic area. If you’re not in a major metro or a drive market, make sure the site has enough members within range of your location. People will only drive so far for a deal.
- The clientele you want. Look at the demographics of the site’s members. Are these the kinds of customers you want? If you’re a high-end restaurant in New York, a Groupon promotion might not be a good fit—but GiltCity might be perfect.
- The timing of your promotion. When do you need the most help attracting new customers?
- The type of business. Sometimes niche sites are better for certain businesses and locations. Niche sites are popping up everywhere: JDeal (Jewish-owned businesses in New York), Coupawz (pet products and services), Poggled (club and drink specials in Chicago).
- The volume of customers you can handle. If you’re a cupcake bakery or a frozen-yogurt store, you can probably handle a lot of customers and sell a lot of vouchers. If you’re a small nail salon or spa, consider sites catering to a smaller, more targeted audience.
I’d love you to click over to OPEN Forum to read my article. Please post your comments below.
Mindy Joyce
