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W&D Weekly
December 3, 2014
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The Latest
Manufacturers Look to Increase Efficiency, Expand Production in 2015

There looks to be some positive change on the horizon for manufacturers in the New Year, according to results from the annual Window & Door Industry Pulse survey. Sixty percent of surveyed manufacturers report that they plan to modernize and increase efficiency in 2015. Second on the priority list in terms of where they will invest is in expanding production capacity. Read more…

 

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The Talk

By Welton Hong, Ring Ring Marketing

Groupon and other deal-of-the-day services, such as LivingSocial and AmazonLocal, have been big business the past few years. Many consumers love them because they can get huge discounts, typically ranging from 50 to 70 percent. But they can be a mixed bag, at best, for the local businesses that contract with such deal-a-day websites.

Every business that partners with Groupon is required to cut its prices massively for the promotion. Unless the business’s prices are already massively inflated, it’s virtually impossible to make a profit off such a promotion.

That’s why most businesses that offer a Groupon promotion do so as a loss leader to generate new customers. But, studies have shown that most customers who take advantage of a deal-a-day don’t return to the business to pay full price. Groupon’s audience is far more focused on value than quality.

Not optimal for W&D

Groupon and its competitors simply aren’t a good deal for window and door businesses in particular. Most don’t depend on return business for the majority of their revenue. Plus, it’s rare to be able to profit off the Groupon itself, as the site generally won’t let you simply shave 10 or 15 percent off standard pricing—it drives a hard bargain, and that’s no bargain for you.

Also, offering a massive discount on services devalues those services in the minds of potential customers. If customers can purchase products and installation for less than half of what they should cost, that’s what they’ll expect to pay in the future. And, if you’re able to slash your prices so heavily, customers will wonder why your products would be worth full price at a later date.

Surveys have reported that more than 40 percent of merchants have said they’ll never use Groupon again, and that includes all businesses, including those who tried to use it as a loss leader. If your business needs to generate new customers, I think there are options that provide a much better return on investment than Groupon does.

What do you think of deal-a-day sites? Have you employed such a promotion? Would you do it again? Take this week’s poll, post a comment and/or send me an email with your thoughts.
Have You Ever Used Groupon Marketing?
My business has used Groupon (or a similar deal), and we plan to do so again.
My business has used Groupon (or a similar deal), but we do not plan to do so again.
My business has not used Groupon (or a similar deal), but we’re interested in trying it.
My business has not used Groupon (or a similar deal), and we’re not interested in trying it.
 
Do Energy Star Installation Instruction Requirements Need Revision?
More than half of the respondents to last week’s poll agreed that the current requirements should be left alone, rather than relaxed or increased. See the complete survey results...
 
The Outside View
After Recession, Home-Remodeling Is on the Rise
From The Wall Street Journal
What Your Front Door Color Has To Say About Your Personality
From The Huffington Post
 
 
Recent Introductions

Dura-Tech Door Frame System from G-M Wood

 
 
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