I just watched TownHog.com reinvent themselves into the most powerful, ‘deal of the day’ platform out there.
If you haven’t already, subscribe now to TownHog. Then read on to learn why…
Why TownHog is reinventing EVERYTHING about marketing
When Google’s PPC program Adwords come on the scene, advertisers finally had some leverage vs. media. No longer did they have to spend, spend, spend, all up front, and hope their advertising did something.
Suddenly, they ONLY spent WHEN their advertising did something. Hence, Pay-Per-Click. A huge step forward.
But let’s be fair. PPC leaves a lot to be desired. In the end, you’re still paying for leads, not actual sales.
What if you only paid for the marketing that actually sold something?
It’s here. These new deal of the day platforms are the holy grail of advertising. Now, advertisers don’t pay anything at all, literally zero (in the case of TownHog) and they actually receive revenue from the media.
Here’s how it works:
I’ll use TownHog in this example.
A business comes up with a promotion. TownHog creates the copy, graphics, all the infrastructure and the complete promotion. On a scheduled day (unlike Groupon or LivingSocial, TownHog will work with the business to pick the right day), your promotion gets blasted all over the TownHog platform for 24 hours, racking up huge sales. Customers purchase the promotion from TownHog and receive a voucher for the service or product they can take to the business.
The offer lasts 24 hours than expires (the vouchers are good for 6 months, typically). 5 days later, TownHog sends a check to the business for their portion of all the revenue generated. (Groupon and LivingSocial aren’t nearly is clean on this aspect; businesses have complained they get their revenue in dribs and drabs).
Here’s why I’m betting on TownHog to own this space
Now, Groupon is getting all the buzz. But watch out for TownHog. Over the long run, I believe they’ll eat everyone else’s lunch and Groupon will be the WordPerfect of this space. Here’s why.
These deal-of-the-day platforms have one goal: to sell an enormous amount of vouchers in a 24 period. But the deal needs to get in front of a lot of people. More eyeballs, more sales.
For advertisers, there is simply no reason not to use TownHog. I’m not recommending Groupon since I’ve heard way too many complaints from advertisers about slow pay and inflexible service.
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ADDED April 28th, 2011 by the author:
A number of folks have contacted me directly, seeking customer support with their TownHog purchases.
While I did work for TownHog for a time, I no longer do. I’m currently the Director of Marketing at Screamin Daily Deals.
That said, I’m sympathetic to customers who are having trouble reaching TownHog. To that end, here’s all I know about how to contact them. This is listed on TownHog.com, and I’m providing this in the hopes it will help.
TownHog – Dotblu, Inc.
343 Sansome Street, Suite 510
San Francisco, CA 94104
Phone: 1-888-673-1321
(Business Hours: Mon-Fri, 9AM-6PM PT)
Questions: info@townhog.com
Support/Help: support@townhog.com
Business questions: info@townhog.com
Media: pr@townhog.com
NOTE: Some people have mentioned they have no luck getting any response going through these channels. I personally called the customer support line and it went to voicemail during business hours.
If you’re still frustrated, there is another option: post your complaint on the company’s Twitter feed. TownHog’s is simply @TownHog.
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Please share research I was wanting to know points of differences thanks
[In full disclosure, I worked for TownHog for a short time, ending in March 2011.]
All of these services work basically the same: Instead of a merchant paying for advertising, the service pays for the advertising and charges a commission on actual sales.
As someone involved in advertising for more than 21 years, I find this revolutionary because it puts the risk entirely on the media, NOT the advertiser. There is literally nothing like this, not even PPC (which comes close but still does not have fees directly tied to actual paying customers).
The major players at this writing are Groupon (HQ’d in Chicago), LivingSocial (HQ’d in Washington DC) and TownHog (HQ’d in San Francisco). Recently, BuyWithMe.com (in Boston) has picked up steam, but I still consider them part of the second tier competitors populated by local newspapers and probably a hundred others I don’t know about.
My experience in speaking with merchants in California, New York and Philadelphia is that TownHog seems to stand head and shoulders above the competitors as easier to work with. We work with merchants on dates of promotion, we don’t charge any fees at all (I understand both Living Social and Groupon tack on credit card processing fees, for instance. If that’s not correct someone please comment and set me straight!).
TownHog seems uniquely dedicated to the merchant’s long term marketing goals, focusing on versions of promotions like frequency cards or designing the promotions to encourage upsells, for example. Again, merchants I speak with in Southern California tell me they appreciate our focus on having long term conversion strategies in place before running the TownHog promotion.
Contrast this with Groupon or LivingSocial’s strategy which is to sell massive amounts of a promotion, regardless of the effect on the merchant. Note the recent TechCrunch article about a photographer who sold over 2,000 sittings through a Groupon promotion in Atlanta.
“A photography deal offered on Groupon in Atlanta yesterday turned messy when it was revealed that the photographer had promoted her work with stolen images and was far from equipped to carry out the terms of the Groupon.”
In other words, to fulfill the 2,000 vouchers snapped up by Groupon buyers, this photographer would be busy for years. Further, because of the deep discounts involved, the photographer would actual lose money keeping their end of the bargain. See the full TechCrunch article here.
LivingSocial, based on the sheer numbers of vouchers regularly sold for professional services like photographers or massage therapists, seems to run into the same problem.
That’s not to say TownHog isn’t facing similar issues, but the truth of the matter is the volume of voucher sales is lower on TownHog.
The main advantage to TownHog, and this is a huge one, is their affiliation to media partners, most notably CBS. Merchants who run promotions on TownHog get free advertising on the CBS websites in their market even long after their deal closes. There is no equivalent for Groupon or LivingSocial, which only sends promotions to their subscriber base and their own websites.
A merchant having their promotion on multiple, high traffic sites for months is simply too much an advantage to ignore.
For all these reasons, I think, at this point, TownHog is the force to be reckoned with.
Just curious- would you recommend TownHog for an experienced salesperson (15+ years) ? Why or why not?
You’d have to do you’re own investigating. Daily Deal sales jobs aren’t at the top tier of income, but they are quite enjoyable if you’re in the field.
You’re still charging a FEE…call it upfront or via sales, bet you’re charging same fees?
Another thing this businesses are what we in the advertising spctrum call “One Shot” Pony…or One-Shot-Phonies…after all the dust has settled…the store owner amde very little commission, stirred up allot of excitement…and most of those buyers will now seek other One-trick-Deals
Two things:
1- “You’re still charging a FEE”: While it’s true that deal companies charge a commission on sales of vouchers, I personally think this is very different than traditional fees or advertising costs. That’s because the commission is only collected on actual sales of a voucher. If the voucher doesn’t sell, the merchant owes nothing.
Try this: Go back to your local newspaper and say, “You ran the ad as promised, but we didn’t get any business, so I’m not paying anything.” Or go back to Google and say, “Despite your only charging me for clicks, I still didn’t get any business afterwards, so I’m not paying anything.” See? A merchant still has to pay those fees.
But with deal companies like TownHog, the merchant never really pays FEES, they pay COMMISSIONS only when something actually sells. That is a smoking deal for merchants, and frankly, revolutionary.
2- Daily Deal programs are like a “one shot pony” for the merchant: A very good point, and a lot of merchants are discovering this. Frankly, any business earned on a discount is already starting at a disadvantage for the merchant. But daily deal marketing is here to stay, so merchants that make peace with it will come out ahead.
Furthermore, at least with TownHog, we spend a lot of time designing what happens AFTER our promotions. Our daily deal is one tooth on a cog of marketing, and it can drive a lot of new traffic and revenue, but it doesn’t replace a comprehensive marketing strategy. For example, when a buyer comes in with a TownHog voucher, it’s important the merchant is ready with some loyalty marketing.
Lastly, daily deal marketing isn’t for every business. In fact, I’d argue it isn’t even for most businesses. Personal trainers, for example, don’t do well. Chiropractors either. But premium restaurants, spas and destinations are perfect. And new opened merchants are well suited to run a deal too.
Thanks for your comments. My feedback is relevant to North American markets. Other markets may have localized issues that go beyond these notes.
Also, these are strictly the opinion of myself, and not to be taken as the official stance of any deal company.
I have had a poor experience with TownHog. Their customer service has thus far been horrible. No one picks up their customer service line, no one responds to emails at support@townhog.com and no one returns voicemail messages.
I purchased a CBS local offer and when I attempted to redeem it, the merchant had never heard of it and would not honor it. I am now attempting to get a refund for the 3 vouchers I purchased.
If anyone knows of a way to actually reach human beings at TownHog support, please let me know.
Thanks in advance!
I am also a Groupon user and their customer service is excellent and very timely.
JT et al: If you’ve have unresolved customer sat issues with TownHog, I recommend posting that on their Twitter feed: http://twitter.com/#!/TownHog
I’ve heard this from several customers of TownHog: they are unable to reach live people and their issues go unresolved. That’s no way to treat a customer. For the record, I do not work for TownHog (I did, but not anymore) and my contacts have moved on.
I think this represents the beginning of the contraction of the Daily Deal space. This business is all about servicing customers; a company that cannot do this is in big trouble, I suspect.
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