Discount voucher sites are all the rage. Groupon, Living Social and a host of other players are entering the mushrooming markdown market. This begs the question if discount sites are good news for brand value?
In summary we don’t think so. It may be good for short term revenue spikes and potentially contribution margin boosts but not long term brand value. This is based on our experience with hotels, spas and restaurants to name a few. Let us share how we arrived at this position. This will be in summary format and then in detail for those that want to read on.
To increase brand value brand equity needs to grow. Numerous empirical studies demonstrate how increases in brand equity drive a brand’s financial performance. Don’t treat the symptoms but the cause if you will. Equity is measured in a number of ways. We’ll consider these in the context of discount sites to develop our argument. Do discount voucher sites drive the following dimensions of brand equity?
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