As the founder and CEO of The Motorsport Lab, a company that offers luxury-driving experiences for clients in Boston and Phoenix, Ray Chang was excited about the prospect of running his first Groupon offer in 2010. What he wasn’t expecting was the crush of phone calls that resulted when his company sold more than 1,000 deals in just the first few hours. To help decrease the pressure on his staff, Chang started using Genbook to handle online reservations. Since then, he’s been able to run three subsequent deals without overburdening his employees.
Tell me about The Motorsport Lab. How does it work, and what made you interested in marketing with daily deals?
The best way to describe us is as an experience company. We provide experiences using supercars like Ferraris, Lamborghinis, and Aston Martins. We have two sides of the business, the B2C and the B2B. The B2C side is where we let the average Joe get behind the wheel of a Ferrari. It is a full service experience where there is always a driving sherpa — we call our driving instructors driving sherpas — who educates our B2C customers in terms of how to drive the car. A lot of the clients we work with are also businesses, and we [offer] driving experiences as an incentive performance reward. We use Groupon to help drive our consumer business.
What made you decide to offer your first Groupon in 2010?
We wanted to spark some more interest in our B2C business, and we figured everyone was jumping on the Groupon bandwagon. We felt that running a deal on the B2C side through Groupon would attract eyeballs, and we realized consumers could be our best advocates. Our consumers go to work on a daily basis, and we hoped a [B2C customer] would convert to a B2B sale, too. The weird thing is that we’ve done so well with Groupon that the consumer part of our business is actually representing the combined share of what we do now. It has been a very unexpected surprise. We’ve run four [Groupon offers so far]. We did one in 2010, and we did three in 2011.
Walk me through your first experience offering a Groupon. What happened after the deal went live?
The deal went live, and by 9 a.m. we had 1,000 sales already. The first question [people had] was, how can we make reservations? At that point in time, we didn’t let people make reservations until the deal had officially closed because Groupon’s terms and conditions state that the deal has to close, and then you can open up the calendar. We were using Google Docs to do all of our reservations, and that was very manual and a not-so-smart way of doing it. I know a lot of people use it today, but going through Google Calendar and Google Docs was just a pain in the butt. We weren’t expecting to sell 1,000 [Groupons] by 9 a.m. That was a lot, you know? The phones were ringing off the hook with people asking questions about how [they could] book. We didn’t want to have to keep dealing with these redundant calls asking, “Can I make a reservation?” So that was the initial thing that happened on the first day of this three-day deal.
So, what was your solution? How did you end up managing all the incoming customers?
When we realized we had 2,000 [Groupons sold], my manager was like, “Holy crap, what we are going to do?” I thought there had to be an easier way. As crazy as it [sounds], I remembered a time when I was going to get a massage and I booked the appointment through Genbook. I remembered how simple it was. I have been through so many different types of online reservation systems, but with Genbook I remembered how easy it was to make the reservation. Plus, I remembered that afterward they sent me a survey to fill out, which was really nifty. Right around midnight [before the Groupon deal closed] I got signed up with Genbook. I spent Sunday, which was the third day [of the deal] tweaking our profile to make it what we wanted in terms of our logo being up, our operating hours, staff, where to find us, and all of that. By Monday morning at midnight we had reservations going. It was crazy, but I’m glad that Genbook was able to do everything for us in terms of the reservation process.
How do customers know to make their reservations online, versus calling?
We have a section that says, “Reserve Now” on our website, and there’s a big button to push that says, “Book Here.” We tell people that we do not take reservations over the phone. We tell them that on the voicemail if they call us, because we don’t want to handle anybody’s credit card information. Everything is online.
Tell me about how Genbook handles people’s credit card information. How does that work?
One of the many questions we get from people who bought the Groupon is, “We bought the Groupon and we already paid for this, so why are we having to put our credit card information in?” Well, Genbook does a dollar authorization. They take your card and [charge it] for a dollar, and then that goes away once you’re done and the real amount shows up. We only hold it like a hotel. You have to at least put a credit card down to show you’re serious, or else that spot will go to another person who is more serious than you.
Have you been more willing to run additional Groupon deals because of your online booking system?
Oh yeah. After we did our [deal], a lot of other companies have started duplicating that type of deal. One way that we stand out is that our appointment setting is very simple. [Other business owners] often call me for help [running deals]. I ask them how they are doing reservations, and they always say, “They’re just going to call us,” and I’m like, “Really? You’re going to have that many people call you per day and you’re fine with it?” I think that is one of their upselling strategies, in terms talking to customers [on the phone]. But for us, we just want to keep it simple. If we wanted to upsell, we would do it when you are happy with a smile on your face after the driving experience. We feel that our transparency in booking and seeing what is available is very helpful for us, versus not knowing what the availability is. We want the experience to be simple — you got the deal, you booked it, you got in, and you got out, just as promised.
Do you use any of the customer information you collect through online bookings for follow-up marketing?
Yes. We are actually going to be rolling out a simple loyalty program. Just having everyone’s email is awesome because we can dump that into MailChimp, where we do all of our email marketing. We are in different locations, Arizona and Massachusetts, so having all that information and being able to download it into a CSV file is fantastic because we can search things like zip codes and states so we know where people are.
From a financial perspective, what kind of ROI do these types of online platforms provide?
From the perspective of Genbook, I use $50,000 as what I would pay somebody to handle all my customer reservations. So this has saved me $50,000 by not having a full-time person to handle all that stuff, from answering voicemails to making appointments and filling it all out on Google Docs. That is something I can’t do [myself] because I’m worried about other parts of the business, so I would have to hire somebody to do it all. That saves me a lot of money. I estimate that to be about $50,000, based on the types of people that we would want to hire to do reservations, bookings, and offer great customer service.
Stephanie Miles is an associate editor at Street Fight. This interview has been edited for length and clarity.
Click here to read more Street Fight local merchant case studies.
Now is the time to reserve your tickets for Street Fight Summit West. Join the top minds in hyperlocal in San Francisco on June 5th.