Should your Company use Groupon?
Nearly everyone you talk to will admit that they love a good deal, how could you not? Consumers love saving money just as much as businesses do, probably more. So in 2008, when a new website called Groupon emerged on the Web, consumers went crazy. The website allows users to get deals, ranging anywhere from 50-90% off, on a wide range of goods and services. You can find extraordinary coupons for anything from a nice steak dinner to a rock-climbing course. A typical Groupon may mean you get a $100 watch for $50, or a $200 massage for $50. Sign me up. It is certainly no wonder that consumers, of which 70 million are currently subscribed, and investors are smitten with the site. But do the merchants and businesses selling their services feel the same way?
In an article from CNBC, Bill Bice lays out some reasons why merchants are hesitant to jump onto the site:
“Groupon built its business working for consumers, not small businesses. Groupon’s sales team works hard convincing merchants to accept offers that meet its standards for “deal quality.” To Groupon, a “high quality” deal translates into money for them, regardless of its effects on the merchant.”
In agreement with Bice, Groupon did create its site with consumers in mind. However, that does not necessarily mean all businesses cannot succeed with the site. If planned and implemented properly, it is possible to gain positive assets out of utilizing the site to promote new deals.
5 Ways to best utilize coupon sites:
1. Attract new customers. Marketers recommend utilizing sites like Groupon to specifically target new customers. Your established, regular customers are already using your business at full price. Groupon is an excellent way to attract those who have never used your products or services.
2. Navigate inventory. Promote goods on Groupon that you either are looking to get rid of, or are regularly lower costs to sell. This is a beneficial way to use coupon sites as promotions for services that you typically do not do very often or goods that are rarely sold. For example, CJ Pony Parts could consider selling car parts that are a little expensive, for cheaper to sell more of what they normally don’t.
3. Means of advertising. Despite your potential overall profit, there is no denying that Groupon, or similar sites such as LivingSocial are ways to get your name out there. These sites are useful for attracting new customers to use your business at a much lower cost. The overall idea is that they will be so satisfied with their experience, they will return ready to pay full price.
4. Establish relationships. An option on Groupon is to offer a certain dollar amount towards customers’ next few visits. For example, offer them $20 for $10 off at their next 3 or 4 visits. This is a sure proof way to simply get customers into your store more than once.
5. Be prepared. If you are running a coupon campaign on Groupon, anticipate that you will have a steadier flow of customers at one time. If you are a restaurant owner, be sure your staff is aware of the Groupon and how to best plan for it. If you are selling products, be sure you simply have enough in stock. Taking precautionary plans will only ensure the consumer enjoys their experience and comes back for more.
If merchants keep this advice in mind, while weighing all the pros and cons of such sites, they may find that Groupon is a go or a no for their business. An article from Nasdaq describes a final positive thought for the small business owner:
“Groupon is not just about promoting the biggest retailers and coffee shops with vouchers for 50 percent off. The site is very much a tool for small and growing businesses to advertise. This has allowed millions of consumers to discover new places that they may have otherwise missed.”