Give the initial customer a promotion to get them in the door. And give their friends a referral discount when they invite more friends, and so on, and so on. You see word of mouth is absolutely the best advertising you can get. Groupon is bad for business owner and consumers. Because business owners have to mark up the original price or cut down the quality or service to make up their discounts and Groupon fee. Groupon sent me an email every day, however, I only purchase one deal per month. I guess for a business owner, to raise awareness, letting people know your existence is not free.
So even if nobody buys any Groupon from the deal you offer, you get your name out to Groupon subscribers. If I decided to sell through them, when do I need to ship my product to them, I am selling high quality pearl jewelry, are they going to be save on their warehouse? There are two key issues with Groupon: 1.
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They cost service an arm and a leg. You do not connect with customer… even the payment directly goes to Groupon. My take is build your customer base organically, I use mobile platform like FlashBind… It is like Groupon, but free. Also it builds my customer network… I can share my card with my customer and it is there with my customer for ever…. I can provide deals to my customers directly. I am hoping this platform or similar platform gains momentum…Everyone will benefit from such platform. Great article, thank you. What did you think about a business starting out?
I definitely agree that it usually hurts loyal customers. My marketplace disc golf is fairly specialized and I was able to track the response pretty closely.
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Groupon give you tools to assist in tracking usage but now that the deal is done I have the opportunity to continue to market to those new clients that would have otherwise not even known of us. The key is to capture the client information for future use. I am a small business owner and someone suggested I use Groupon. The payment schedule is unheard of. Those numbers were from A groupon rep in my email.
Exposure for your business is the only good thing about Groupon. Thanks for the article. After reading a few different opinions of Groupon I have to say I think it depends on the kind of business you are running. I think sites like Group and Restaruant. I personally always like to use things like Group to try a new place I have never been, then if it is great I keep going back.
You probably would only get new business from deal seekers and nothing else. I have a client who I use the trail offer tactic for a lot. She does makeup for weddings, prom, etc and we post on facebook right before wedding season and prom about getting a free make up trial run for liking her page.
This tends to be especially effective with brides because they get to try you once and then they love it and use you for the big day as well as for the bridal party. I have considered trying an offer like this on Groupon but need to get more details. I was glad to read more about how Groupon charges businesses for their services.
Thank you for this blog! After reading your article I agree with you that it could deteriorate the value of my product and business. Knowing that now is definitely going to make me take a closer look at the products that are offered on Groupon and question the quality of them. Groupon is not worth the hassle.
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Yes they make you discount your services down to less than half and then take half of that. And yes the Grouponers bottomfeeders are loyal to Screwpon, not to your business. I am developing a mobile phone app to directly link small businesses to local consumers, no middleman! I would love to run the idea by small business owners to see what you think about it.
If you are interested to know more about the app, please let me know. Geo-located, direct marketing app Free app for consumers Merchants pay a flat fee for monthly usage. My wife did 1 Groupon and 2 Living Social deals about three years ago with her bed and breakfast. The secret with her is that she never ever bought into the claim that you have to give away your initial service at a loss because you will end up with repeat customers who will pay full price later.
In the end though, she still had to work her butt off to turn over and prepare all of those rooms for a very small amount of money per room night, compared to her regular rates. Innkeeping is sort of like airline seats. If the room is empty for the night, you get nothing. She structured it so that deal customers could only book on weekdays, when she is often empty anyway.
It makes me extremely proud to know that my wife went head to head with two different value destroyers and turned a profit. Great… It takes a well thought out plan of execution. Great story…. I guess at the end of the day it is a marketing tool to expose yourself to new customers who otherwise may not have found you in the sea of competitors. Depending on your margin this may work out in your favour or cover your operational costs at least. Better than an empty shop. I am a rep for Lyoness and although we have an existing large customer base in North America I could see how you could use groupon in combination….
It would be my pleasure to support your business success. Free mobile app included for small biz; along with your own Rewards Program card to use throughout your community. It has help ed us in a very big way. I have a small electronic online shop selling portable gadgets like speakers,solar charger…. I would like to sell my products at groupon, but I dunno how can I do.
Wish you can reply me as soon as possible. Thank You Very Much. The people who buy Groupons are not what you should consider typical loyal customers; these are people who are just looking for a deal and they are all over the map on what businesses, products and services they will try. The grouponers are not loyal customers, and can actually depreciate the experience for those loyal customers, by not providing good feedback to sites like yelp, everyone is disatisfied, and they merchant could find themselves starting to resent the grouponers, which may become visible to those loyal customers.
Do you think these deals would be an idea for a new business only starting out? Not for the repeat customers the area we are going into will not have repeat customers but for word of mouth and genuine reviews? We can afford to break even on the deals provided we dont give hundreds of them away we were thinking about For small business owners just stay away from using Groupon.
Also like someone said above you will not get loyal customer from Groupon. The customers you will get from Groupon is the last batch of customers who might have looked at every single web site to pinch penny. They simply care less about your business except their pocket and it will be extremely headache experience to deal with them. I was approached by Groupon a number of times to do a deal and still get sales calls from these guys.
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Also, a search of your business will link to your Groupon reviews usually on the first page of Google. I am a massage therapist and just started working at a new spa. I really like my co-workers and working environment and the owner is great to. Massage is hard work and that is not worth my time and energy so I am thinking might be time to move on. Too bad because I really like working there otherwise. After analyzing your article I trust you that it may become worse the value of my product and business.
I am a small business owner and recently tried groupon myself. After 3 months of selling no Groupons, I decided to contact them to end my campaign. I sent several emails asking to cancel and they told me to call in. I called to speak with a representative and they basically said they had spent money advertising my service and I have sold no Groupons so basically I was indebted to them. They were incredibly rude and tried to convince me to lower the price of my deal, but I told them that their contract says that I can end my deal at anytime and I would like to end it now.
The gentleman was very rude, said he ended it and hung up on me. Moral of my story is, I would absolutely never do a Groupon again. Groupon is down right terrible for businesses in my honest opinion. I highly suggest a business look into other forms of marketing like SEO, Social Media, and other internet marketing tactics before giving away half their profits to Groupon and other deal sites. We have a small entertainment business in a small town People who see or hear of us, seem to love our concept, however the revenue is not what we were hoping for.
How can advertising in Groupon help our business? Any suggestions are welcomed please.
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THank you. Interesting article. Good info though. I have been wondering about the Groupon in comparison to Val Paks, door hangers. I searched this topic because my company offers another advertising tool. The Proxee is a blue tooth marketing tool. The device sends out a broadcast yds onto smartphones on the Google network and some Iphones. We are offering a promotion currently. If you are interested reply for more info. This technology has been used in stadiums, zoos and the big name stores. We have made it very affordable for small brick and mortar and online businesses.
Hit me up! Good luck on your business endeavors and we wish you great success. I have another advertising tool called the Proxee. I use Groupon as both a customer and small business. As a permanent cosmetic business, I consider it advertising. Advertising is costly and takes weeks, if not months of steady exposure.
Totally wrong. Besides that, it is a platform to show your store on the map too, making thousands of potential customers aware that you are there. Let the new customer show up with the coupon, a proven effective way to lure new people and retain existing ones if you wish, by millions of businesses. Your logic is very vague and one sided, what are you trying to sell the people here??? At that price I was expecting horrible job but was intrigued by 5 star yelp reviews.
Turns out the lady was a new grad from beauty school and had no customer base. And she has perfect 5 star yelp reviews from over customers which is unheard of! Back then when I used a groupon she had 2 from fellow grouponers. When I got there, told them I had a groupon. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. A completely FREE mini course on how to develop a niche ecommerce website in 5 easy steps! Learn how to find products to sell and setup your online store.
George, The reason we are constantly bombarded with discounts is because they work, and because many customers have been trained to wait for them.
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Steve, I think the businesses who use Groupon and LivingSocial and the like are banking on people buying the coupon, but then not using it withing the timeline allotted 1 year, 6 months, etc. Though I agree, for wedding products why use Groupon? Best, Chris. Thanks for the warning. I hear this theory quiet often. I agree with PhilIMS From what I understand about marketing through promotions the best way to deal with this is not to look at profiting up front per se.
Hi Dea, did you find something better to promote your business, rather than Groupon? Hi Amie, are you looking to improve on your outreach for your business instead of Groupon? Scraping is a technique that is best used by experts. We provide best data scraping services. Hi, I am developing a mobile phone app to directly link small businesses to local consumers, no middleman! Yes, Im interested!
Tell me more…. About to start small biz. Okay, this is a hypothetical sales situation……. I am interested how far you got with this app. I am a new small business owner. She made a profit on all three and walked away with a large hunk of cash each time. So pleased to hear of people having success with the program.
Pingback: How to Setup a Groupon Deal for your tutoring business. Treat Groupon customers like VIPs. But remember: These folks are about to spend twice as much at your business and put four times as much revenue in your pocket as they did when they came in with their Groupon. If they come back for another massage, give them a sample-size bottle of moisture lotion. Or if they come back to your restaurant on a busy night without a reservation, give them priority on the wait list and offer them a drink. Even something as simple as remembering their names and thanking them for coming back can clinch the deal.
Discount predictably. Or plan on building discounts into your pricing model permanently. Think here of how T.
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Or consider Talbots , which caters to a cadre of bargain-shoppers who will only shop its sales. Take a good look at your relative value against competitors and substitutes before blaming coupons for your slow sales. Try adjusting prices, upgrading your service or resetting customer expectations through your marketing messages. Go forth boldly.