Cold calling and getting discounts from businesses to offer customers

[Nk007]

Hi

I am in he process of setting up a discount card for travel and tourism in a specific city. I know another post was written some time ago by another forum user but never saw the conclusion as to what happened!

Anyway I have now reached the stage where I have to ask restaurants and entertainment outlets for bogof or 50 percent discountS. I have one person working on the IT side and website whilst I am managing the rest myself and home based to keep costs to a minimum.

Any advice as to how I should go about it and what I should say to convince the businesses to give that discount t would be appreciated !

I feel this is the hardest part of the whole set up

Any tips or advice would be appreciated

 

[Bill1954]

So what's in it for the restaurant / outlet owners ? If you expect them to take a 50% cut in takings to fund your business I think you are going to hear some harsh replies.

 

[Scott@KarmaContent]

Haven't TasteCard got their first? They've got thousands of restaurants signed up all over the UK. What are you going to offer that's different?

 

[Easy Loans Company]

Yeah as Bill says, what's in it for them? If you can offered a genuine increase in customers you might have a bit more joy. Make it clear what you are planning and what you expect to achieve on their behalf by offering this discount.

 

[Nk007]

Yes taster card are doing the same but mine will include entertainment too and focuses on one city. I will be hoping to drive a lot of tourists to their outlets and they will get the usual perks of advertising on the website, social media and as my budget increases other modes of communication.

 

[Alan]

Its fairly simple, it is one city, and it is tourist destination. You just need to contact every single business and sell them why they are going to get more business this way.

I was recently in Barcelona, and took the tourist bus, With the tickets you get a booklet of discounts of businesses on the route. If I owned a business near a stop, if someone came to me, showed me the concepts and told me 10 busses and hour are passing and each passenger will have the booklet - I'd be sying how much do I have to pay to be in your discount booklet - let me sign now.

 

[Andrew Chambers]

It's not going to work. No restaurant is going to offer a 50% discount for a one off sale from a tourist, there is no profit for them and no chance of profitably repeat custom.

You need to be more realistic as to the discounts they might be willing to give. And of course the best restaurants won't be in slightest bit interested, so make sure you target the right establishments.

 

[gingerdad]

Tried something similar when the peel 2 save franchise was about.

Getting discounts was easy selling the crads etc was not. We did it for a local charity with 100% going to the charity. Sold a few but didn't repeat it in future years.

Wasn't involved in peel 2 save I should add. Not that daft.

 

[gingerdad]

We targeted tourism business which already used discounting as part of their marketing.

 

[Nk007]

Gingerdad may I ask what technique you used to get the discounts?

The 50 percent off would usually be for the ala carte main menu so the restaurants make their profit on the sides, deserts and drinks.

 

[obscure]

The first questions I (as a business) would ask you is "what is your marketing budget and how many outlets do you have signed up to distribute/sell these cards". No one is going to know about your system if you don't have a sizeable initial marketing spend and a good marketing plan. If you aren't investing in your own business to build awareness I'm not going to want to invest either.

 

[Nk007]

Why would you want to know my marketing budget? I am not asking for investment as such. I am asking for the outlets to give me a discounted offer ..why would they need to know my marketing budget?

 

[ethical PR]

Because they aren't going to sign up unless they are confident that you have invested a decent marketing budget to promote your scheme.

Why should they heavily discount their product through you unless they are confident that you have a better marketing reach then they can achieve for themselves?

Surely this a key element of your scheme?

The very fact that you are asking this question is quite worrying.

 

[Nk007]

Thanks PR for the clarification. I should be worried in that case too because I don't have a huge marketing budget but I have enough to get this off the ground and a sound business plan. I am confident that I can sell this card and drive customers to their respective businesses. There is no risk factor or expense for them by joining the scheme. If the customer visits them then they will make a profit.

 

[Maxwell83]

There is no risk factor or expense for them by joining the scheme. If the customer visits them then they will make a profit.

There is a risk (we saw it with groupon and the like) - they make less profit on the discounted meals than on a full price one. If they normally do 50 covers in a day at full price, and then start finding they're doing 40 covers at full price and 10 at half price, they won't be happy.

So the risk is that their customer base doesn't increase but they are now selling the same amount at less profit. They are going to need to know that you have the means to drive increased numbers of customers to their business.

 

[Ashley_Price]

You also have competition from Living Social, which is a website and email version of what you're doing. Just type in the name of the town or city you're in and you'll get a list of all the special offers from businesses, that are signed up to the scheme, in that area.

The difficulty with this sort of thing is it's a chicken and egg situation: You won't get many people signing up for the card until there's lots of businesses offering discounts, but businesses won't sign up until they see you have a big enough customer base to benefit them.

Is the "tourist section" of the city going to be big enough to sustain the plan? How soon will it become saturated? How many tourists, etc., visit the city? Which parts of the city do they visit? There are going to be areas of the city where tourists, etc. don't go - and probably won't venture to just to get, for example, 10% off a meal.

You need to make sure the discounts/special offers from businesses are going to be worth it. Not exactly the same, but it's a good example, a friend of mine did a Twitter offer: if you retweeted a particular tweet, once they got up to 1000 followers, a draw would take place and a "retweeter" would be chosen at random and win a free meal for two. I suggested something similar to another friend who runs a local tea room and wanted to increase his social media presence. I was thinking he could offer the winner "afternoon tea for two". He thought this was a great idea, but his offer was going to be... a free milkshake.

 

[ethical PR]

Thanks PR for the clarification. I should be worried in that case too because I don't have a huge marketing budget but I have enough to get this off the ground and a sound business plan. I am confident that I can sell this card and drive customers to their respective businesses. There is no risk factor or expense for them by joining the scheme. If the customer visits them then they will make a profit.

Of course there is a risk to them joining the scheme...you must be charging for your service or you wouldn't have a business model.

If they offer a discount through you at 50% off it's likely to be a lost leader and tourists aren't repeat customers in most cases. And then on top they have your costs.

You need to be able to answer their question - which is why should they work with you? What marketing can you offer that they can't do directly themselves? Would it be cheaper and more effective for them to use you rather than market directly themselves?

When you developed your business plan - did you also put a costed marketing strategy in place to launch your business and for ongoing promotion?

 

[Ashley_Price]

Does your city have a Chamber of Commerce? If so, have you considered joining and getting feedback from the members of it - all of whom of course will be businesses in the area?

 

[Nk007]

Thank you everyone for your feedback and advice . I really do appreciate it!

The actual city has an increasingly high rate of tourists but there will also be residents of the city who could use the card. The city doesnt have a discount card at the moment. The outlets who join the discount scheme do so free of charge. It's the customer who is charged for the card.

I will check re the chamber of commerce ! Thanks for that Ashely. It is indeed a chicken and egg situation!

Ethical PR , thank you , my business plan has a costed marketing strategy but I will need to give more though to the ongoing promotion.

 

[APW]

Are you trying to do something like Citypass.com?

I am sure there is a UK version of this offering great prices for top attractions and restuarants...if i find the link i will put it up.

 

[garyk]

the 'offers' space is now tired and quite competitive (it was even a couple of years ago when I was involved in it).

There is deal fatigue and many business owners found that with groupon they hardly ever turned discount customers into full paying customers.

Barclaycard also do 'bespoke offers' and have the might of 11 million card holders they can reach.They half-heartedly do it, it doesn't even need to be successful for them, as a card provider they were just looking for a way to differentiate their core offering in the market.

As Ashley mentioned you have a 'network' issue, really hard when you have to get both sides built as one feeds the other. Trust me I learnt from hard experience this is very very tough to get working.

 

[Nk007]

With the Citypass, I think you buy an actual set number of tickets but at a discounted rate. With the card I propose, it shall provide a discount on a array of different outlets. The customer will go to the outlet of their choice ( being under the scheme ), purchase their ticket or meal and get the discount on presentation of the card.

 

[Nk007]

Garyk thanks for your feedback. Which aspect did you find was the hardest "to get working!" ?

I am confident I can get the customers providing I can get the outlets to give me the discounts! I just need advice on how best to pitch the idea.

The city which I am planning to launch in hasn't been saturated yet with such offers and they don't have a card yet!