Groupon routinely calls small businesses to get them to advertise on the service. Consumers love the service that gives them large discounts on items and events. Businesses can advertise with no money out of pocket, so it sounds like a great deal for a business to get in front of new customers. Is it? In truth, Groupon is at best a mixed blessing for small businesses. Here is what you need to consider before using Groupon to advertise your business.
- Deep discount: The discount is just the starting point. Aside from the discount you are offering customers, the remaining price is split between your business and Groupon. If you offer a 50% you are only making 25%. Unless you have tremendous margins, you will lose money on the Groupon deal.
- The customer: The Groupon customer is known not be a loyal customer. They are looking for deals and nothing more. They will come to for the Groupon deal, but it will take a lot of work on your part to get them to come back.
- Branding: Your listing in the Groupon email is devoid of branding. Unless someone clicks on the link to view the offer, even your name will be unknown to them in many situations. This limits your exposure.
If you decide that Groupon is for you despite these drawbacks treat the promotion as an opportunity to gather data. Before allowing someone to get the Groupon deal, require them to provide their name and email address. Then follow up with them. Ask how they enjoyed your product or service. Send them regular emails to keep your name in front of them. If you don’t do this, you will have wasted the Groupon exposure.
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