Jon Sayah, owner of Lights Fantastic in Texas, had just substantially renovated his Dallas store and wanted to entice everyone in the community to see it. He started the evaluation process by examining how much the company had spent historically on advertising each year. With an average annual budget of $100,000, Sayah found that newspaper advertising alone typically ran around $63,000 for the year. “We could easily spend $3,000 on a major newspaper ad campaign for a weekend promoting a sale,” he says.
Since his store specializes in selling a cutting-edge technology like LED, Sayah reasoned it made sense to employ a cutting-edge technique for advertising as well;that’s why he chose Groupon. The offer: Spend $35 to get a $100 gift card to Lights Fantastic.
“We had 900 people take the deal,” Sayah remarks. That means that 900 people will be visiting Lights Fantastic. “We never spent $63,000 on newspaper advertising and got 900 people coming in as a result of it,” Sayah explains.
The deal was certainly hard for consumers to pass up, but why give away so much? “We changed our showroom so dramatically that we really wanted as many people as possible to see the changes we made. We didn’t want to offer a $100 gift card for $50 (which is more typical) and have maybe 300 people take the deal and come in.”
The incredible offer, which only ran in the past few months, has paid off. “Roughly 30 percent of people who purchased the gift cards have come in already,” Sayah notes. Since customers typically spend more than their gift card amounts, the gamble has been worth it. “The average sale for the Groupon customers is around $300, but some are spending $1,000. Nothing we have done in advertising before has ever brought in that much,” he concludes.
Learn more about John Sayah and his lighting showroom Lights Fantastic