Groupon For Businesses? The good. The bad. The Ugly
The deal-of-the-day website Groupon has been growing tremendously since it began less than four years ago. Since then, thousands of businesses have taken to Groupon to offer discounted gift certificates to customers. As of 2010, Groupon has over 35 million registered users.
A company that has that millions of users and is valued over 1.85 billion dollars must be doing something right. Groupon works for businesses because it guarantees a minimum number of customers. If the minimum isn’t reached, then the deal is void. The nature of Groupon allows a large number of sales to be done in a short period of time. Because the offers expire so quickly, users are likely to pass it along to friends and family. It is essentially free word of mouth advertising across platforms like Facebook and Twitter and a great way to attract new customers. Beside the social media exposure, your offer is also featured on the Groupon’s daily email that is sent out to subscribers.
Businesses that use Groupon gain exposure and tons of sales in a short period of time and because Groupon is only successful if your promotion is successful, there is no risk involved. How can it go wrong?
One huge and sometimes detrimental mistake a business owner can make when using Groupon is to not be prepared for the outcome. Groupon mentions on their website, it is a “risk-free promotion.” Not quite. We Can Help You.
Although there is no risk if you do not sell enough offers, there is a risk you run by selling too many. It has happened many times where a business puts out a deal and thousands more purchase the deal than expected. As a Groupon user, you must honor the fine print and accept each Groupon a customer brings in, if an issue arises with a customer, it can leave a bad impression and you risk the chance of losing them.
Groupon does expose your company and bring more people into your doors. They boost your sales for the time being, but that doesn’t mean every customer will come back. Sometimes these customers just move from deal to deal and if you don’t continue offering deals, they aren’t likely to come back.
The last big mistake businesses make when signing up for Groupon, is not realizing how it will affect their profits. When a business signs up for Groupon, they must offer around 50% or more off of their merchandise or service. Of the money they have left, 50% of that goes directly to Groupon, leaving the business with 25% or less of the original value.
Groupon’s deals are made to benefit the customer. Though there are benefits with mass exposure and increasing sales, each business needs to decide if Groupon is the best promotional device for them.