I was reading a very well written piece on “The Thank You Economy” the other day. In it, the writer described how the growth of social media  and online networking gives companies the opportunity to say thank you to their clients.

If you are one of our fans on Facebook, followers on twitter, regular visitors to this blog or ever make the mistake of stepping into my office when I have five minutes free to pontificate on one of my favourite topics, you will be well aware that I am not a fan of the Discount Coupon companies, such as Groupon, KGB Deals, Living Social etc. Luckily most of the coupon companies are now themselves aware of my lack of enthusiasm for their offers and they have stopped calling me with such ridiculous frequency.

The young lady who rang me yesterday from Living Social was not aware that we have made a policy decision not to offer complete strangers the chance to come racing at Daytona for less than 50% of the standard prices. Whilst she was persuasive and professional, she didn’t seem to grasp that we prefer to reward our existing loyal customers with offers – rather than coupon collectors who have very little brand loyalty.

When I explained that we simply would not give a 50% plus discount to attract new clients, but that we offer free karting to our existing customers for their birthdays (22000 emails were sent yesterday to Daytona Motorsport clients with March Birthdays, offering them a free arrive&drive for their birthday if they bring a paying friend), she tried to argue that if we effectively give a 50% discount to existing clients then we should give a 50% discount to potential new clients. Unfortunately for Living Social her arguments proved exactly what is wrong with coupon deals for value added branded businesses. Rather than bring us new loyal customers, they would annoy our existing loyal customers and replace them in the short term with discount hunters.

The idea that Tesco would give half price to new clients for their weekly shop whilst only giving their loyal club card holders a 2% cash back on the same shopping is laughable.  The mobile phone networks discovered to their cost that giving new customers better deals than existing customer does not prove worthwhile in the long term. The new customer only deals attracted people from other networks in the short-term but massively increased their churn rate (the rate at which existing customers depart for other networks). These days phone networks offer existing clients the same or better deals, and then add value on top with orange Wednesdays, Vodafone VIP etc.

So we say no thank you once again to Living Social and we say Happy-Birthday-Have-Some-Free-Karting to another 22,000 existing Daytona customers (and we will do so again every month so its worth being a customer of ours).

Jim Graham
Team Daytona