Can Groupon Help Grow Your Business?
Everyone loves Groupon. It’s the place to go if you want to find a deal on a night out, a salon service, or family activity.
Groupon is a great for people who want to save money, but is it good way for businesses to grow their customer base?
Let’s take a look.
Groupon can be good for businesses who are looking to make some sales quickly over a short period of time. They promote your business/deal and funnel the customers directly to you. All you have to do is decide what deal you want to offer and for how long, then they do the rest.
It’s a relatively simple process. You sign up, create a campaign, then Groupon does the promotion so you don’t have to. All you need to do is get ready for the horde of deal-seekers.
And the money comes rolling on in, right?
Groupon takes a hefty fee, along with credit card processing fees, out of the already low prices offered by merchants. What, exactly, those fees are depends on whether you’re offering a service or product, and Groupon cleverly doesn’t give any specifics on their website.
However, businesses who have sold deals with Groupon before report that the fee can be anywhere from 20% to 60% of the sale.
Just to be clear about this, a business offers a crazy deal on Groupon and then Groupon takes up to 60% of that deal (plus credit card processing fees) right off the bat. So if you sell a coupon for $10 to your restaurant, Groupon takes $6 (plus $0.50 for credit card processing fees) and you get $3.50. But you still have to provide the customer with $20 worth of food.
Even worse than potentially losing money on your Groupon deal, those hordes of deal-seeking customers you were hoping to win over as repeat customers? Guess again.
Groupon customers are not looking to become lifelong customers of your business. They want the deal. That’s it. Then on to the next deal.
The Bottom Line
There are businesses who have been able to use Groupon and other coupon websites to their advantage. Those businesses had a strategy, a plan in place, to maximize the visibility they received and the stream of new customers. They were able to demonstrate their expertise and value to the customers who came in, up selling them to another product or service.
If you want to try your hand at a Groupon deal for your business, put some thought into what you want to offer, how you’ll frame the offer, and how you’ll work to keep those customers from being one-and-done.
- Offer a discount for your most basic service, then display the benefits of a more upscale service at your location and allow them to upgrade right then and there.
- Before the customer leaves, schedule another appointment for a different service at a later time.
- Ask them to write a review for your business on Google or Yelp.
- At the very least, get them to sign up for your newsletter so that you can try to woo them back at a later time.
For some restaurant-specific ideas, check out this video of Gary V and Jon Taffer (some of the language in this video is NSFW, so put those headphones in).
The bottom line, there is no magic button that will make your business a huge, overnight success. Discounting websites like Groupon and Living Social can help you get new business in your doors, but you have to be very, very careful with how you use them.
Once you’ve got new people in the door, that’s when the real work begins. Create and implement a strategy for how you’re going to keep those new customers coming back.
And maybe, just maybe, Groupon really will help grow your business.