Case Study: Using Instant Deals For Scalability and Control

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When Ashley Hubbard and her husband Robert Ludlow first opened Fleurir Chocolates in Washington, DC, they had planned on using group coupons to promote their new store. Unfortunately, scalability was an issue and the couple worried about the possibility of selling too many coupons and getting in over their heads. By opting for LivingSocial Instant Deals instead, Hubbard is able to limit the hours when her coupons are available and maintain more control over the deals she offers.

How did your deal with LivingSocial Instant Deals come about?
About one and a half years ago the whole Groupon and LivingSocial thing started to grow. We were thinking we’d be in our retail space a little sooner than we were, and we had always wanted to do one of the deals to bring people in when we first opened. As more time went by and the coupon companies started getting bigger, we discovered that they would completely overwhelm us. We are a really small operation – it’s really just my husband and I, and his parents helping out, so we wouldn’t be able to maintain the supply and manpower that was required to do one of those big, huge coupons where thousands of them are sold. That would overwhelm us.

So, in DC a few months back they launched [LivingSocial] Instant Deals, where you have to redeem them that same day and you only sell them for certain hours. We [thought] this would be a much better platform for us. If we find it is really overwhelming, we can change the hours from two to four, or [limit it to] only one day a week. Also, because [customers] have to redeem it that day, you can see how many are being purchased and how many people you can expect to come in. So, it was really nice.

Our [deal] is super small. Some restaurants do bigger ones. Ours is just two-for-one, and just on weekdays. It can be a lure for people to come in and try us out. It’s a really small thing, $2 for two pieces of chocolate. It brings [people] in here to see if they like us. It’s a really low risk on their part, and a low risk on our part. So that’s how we ended up going that route. We like it. We like the control we have over the whole process of it, and we like that it is a lot smaller.

What has your experience been with customer retention with Instant Deals?
It’s been really good. We’ve been lucky in that we have a really loyal customer base. Our biggest season is during Christmas, but how we make our money during the summer is through repeat customers and people who come in every week or every time they have a dinner party. They know that they can rely on our product and they like it. It’s tried, true, different, affordable, and a little bit luxurious. Since we’re such a small operation, we’re able to have more personal relationships with people who come in. They know what’s going on with the business. We use Facebook a lot, as well, and the blog to give people a sense what’s going on day to day. They know all of our dramas, ups and downs, and we’re pretty well connected.

I noticed you post a lot of interesting tidbits online. How do you decide what’s worth posting, from a marketing perspective?
Well, Robert and I are young. I’m 25 and Robert is 26. So, Facebook was launched when I was a freshman in college and it’s a part of my life. A lot of my friends are on it, so it just seemed like a natural step to have a Facebook page when we opened the business. It was just a natural progression for us to do this online platform, especially since we didn’t have a retail space initially. We were at the farmer’s markets, so it was a good way to tell people, “We’re not going to be at the farmer’s market [today] because it’s snowing,” or “We’ll be here this time or this time.” Also, it was a nice way to direct people to the fact that our website was up, our store was available, and just to keep in contact with people since we didn’t have a place where they could come on a rainy day and see what was going on. As far as what we put up there, I think that our company is a pretty good reflection of who Robert and I are personality-wise. We’re a bit more tongue and cheek. We don’t take ourselves super seriously. We also have fun with it and we want that to come through. We may not always sound super professional, but it’s just honest and it’s kind of common sense on Facebook. We want our personality to come through a lot, and Facebook allows you to do that. Twitter I’m not as good at, because we don’t have a lot of news coming through every day. We don’t have a lot of updates to make or anything like that. You [can] get lost in all the noise of Twitter if you’re only making one comment a day.

What have been the biggest advertising challenges you’ve faced as a relatively new business owner?
Since opening the actual brick-and-mortar store, we’ve been lucky. We haven’t done a lot of advertising because we’ve gotten a decent amount of media attention. There are a lot of food blogs in the DC area and culture blogs that have written about us and really supported us. So, they’ve gotten the word out. For our online store, we do Google AdWords and that has worked really well for driving people to the store. We’ve been really successful in getting people to look at the website just through Google AdWords. It’s also nice because you have control over how much money you want to spend a day, how long you want to run for, what kind of keyword you want to use, and even which states you want to run in. So, that’s kind of our fallback routine and [main] form of advertising right now. That’s targeted toward the online store.

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This interview has been edited for length and clarity.

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.