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Will Groupon Kill My Business?

by | Groupon, Marketing Funnel, Services, Social Media Marketing

Is Groupon A Smart Option?

You hear people talking about Groupon in both a positive and negative way. One person says it’s ruined my business, while others talk about all the new clients they have gotten. So what’s the deal?

 

groupon logoGroupon Positives- 

  1. You get your business in front of more eyeballs
  2. You have no upfront marketing costs
  3. No website required
  4. Ability to collect tips on services

Groupon Negatives-

  1. You collect approximately 25% of the retail value of product or service
  2. If you don’t limit the number of Groupons, you’ll loose your mind
  3. Groupon shoppers are not always loyal
  4. You get paid on their schedule not as the product or service is provided

 

What kind of businesses do well with Groupon?

The types of businesses that do well with Groupon vary slightly. But here is a list of businesses that do better than most:

  • Gyms
  • Karate Centers
  • Hair Dressers
  • New Doctor’s Office
  • Weight Loss Centers
  • Hotels
  • Restaurants
  • Cleaning Services

Do you see a trend? Companies that provide services rather than goods really can excel in the use of Groupon as part of their marketing funnel. Think about a gym. They are open a certain set of hours. People can come and go as they please. The same number of core employees are on staff whether there are 10 or 50 people working out. They are not consuming products with their Groupon purchase but can buy extra products once they are there. Another example is the restaurants. I hesitated adding this one because people often disagree. However, if the restaurant can’t figure out how to monopolize on a Groupon, they wouldn’t do well with a coupon in a local paper either! Here’s what I mean. A restaurant puts out a Groupon for $10 off $20 or more, good only during lunch time. When someone purchases that type Groupon they are often on a mobile device, hungry and will be there shortly. What the restaurant owner has in place for customer retention/loyalty will make or break the profits after the Groupon purchaser leaves. Say what? Ok so if I purchase a Groupon, go to the restaurant, eat and leave what does the company get? Lower profits. But, if the restaurant uses the Groupon as part of their marketing funnel to gather information about the diner to remarked to them they have won.

 

Still curious about if Groupon would deb a good fit for your business? Comment below or go to the contact us page for more ways to get in tough with us! Click here.