June 15, 2011
Group buying sites such as Groupon and WagJag are gaining popularity across the country. They target local businesses, inviting them to post attractive offers that are only available if a minimum number of people sign up for them. Once the daily deal is offered, and emailed to the group’s subscribers, it is hoped that subscribers will forward the deal to interested friends, and in that way the deal goes ‘viral.’

Horticulture Review contacted two members who had polar-opposite feelings about their experience with the group buying site WagJag.

Vanessa Stockham of Let’s Landscape Together in Burlington, signed on with WagJag this spring, and offered a $29 deal for a landscape design drawing and consultation valued at $100, while Terry Vanderkruk at Connon Nurseries CBV Holdings in Waterdown and Trenton, put together a deal that allowed customers to purchase $30 worth of annuals and/or hanging baskets for $15.

“I analyzed the maximum amount we’d have to give away to attract buyers.”

“We always like to try new things and saw that other landscapers hadn’t advertised on WagJag yet, so we thought we’d give it a try,” explains Let’s Landscape’s Stockham. She notes they also thought participating would add to their company’s search engine optimization (SEO) ranking on the web, help its branding and be a great promotion to the local community.

Too much volume

“It was our choice to participate, but the whole experience has gone completely awry. We would never do it again. We told WagJag we couldn’t handle over 250 designs, but ran up over 500 purchases.” The final total of Let’s Landscape Together’s WagJag was 512 landscape design drawings.

Because of the volume, Let’s Landscape has been unable to keep up with demand. “We’re a big company, with 55 employees. But we’ve stressed out our employees and have damaged our reputation,” says Stockham. “We don’t want to be known as a discount landscaper, but have attracted every weekend warrior in the area.

“Maybe this idea would work for a retail store with a product to sell, but it has been a disaster for us as a service business. We’ve lost customers that we couldn’t get to because we were bogged down with discounted visits.”

Stockham says so far her two designers have completed 120 designs that came via WagJag, and are booked until October to complete their commitment. While Let’s Landscape Together creates designs for do-it-yourselfers, many times it can end up being hired to do the work for the homeowner. With the discount customers this is not proving to be the case, with only two small jobs booked from the 120 designs.

She explains that WagJag will only accept heavily discounted promotions, and takes half the money collected. “We charged $29, and WagJag either took $14 cash, or would give us one-and-a-half times the amount in a credit for advertising with Metroland publications (WagJag’s parent company).

“I would never do it again,” says Stockham.

Over 5,500 coupons sold

On the other hand, Vanderkruk is thrilled with the 50 per cent off deal he offered. Connon’s WagJag offer quickly went viral, and by the time the offer closed, 5,563 discount coupons had been sold. “I’d been watching WagJag since it first started, and analyzed the maximum amount we’d have to give away to attract buyers, and settled on offering $30 worth of annuals, baskets and containers for $15. “I dealt with our regular Metroland sales rep and he was willing to accept and promote a 50 per cent discount deal,” he adds.

“We made a lot of renovations at the garden centre over the last year, and were looking for a way to bring in lots of people. And the WagJag offer was definitely a good traffic generator for us. People really do their research now before committing themselves, so we submitted some good photos for the WagJag offer, and made sure our website was attractive before the offer went live,” said Vanderkruk.

Track coupon purchases

“We’ve involved our programmer who has built a WagJag code into our POS system, so we can scan the coupon and immediately tell if it has already been used. We are also able to track the purchases WagJag customers made above and beyond the coupon limit.”

It’s too early to access all the numbers, but Vanderkruk estimates most purchased $20-30 above the value of their coupon. Connon’s WagJag expires July 4, and already 4,000 of the coupons have been redeemed.

Vanderkruk  stated, “We thought a lot about the offer we wanted to make on WagJag, and picked something with good margins and that appeals to a large audience. Our timing was perfect, the offer went live the third week in April.”

Vanderkruk cautions that WagJag doesn’t want to see too many rules and parameters put on the coupons, but he was pleased with the terms they offered. The fine print on Connon’s WagJag limited the offer to two coupons per customer and they were only allowed to use one coupon per day. “This has given us some really good exposure, and if I was to do it again, the only change I’d make would be to limit the offer to one coupon per customer, as I think everybody bought two.”