5-Point Groupon Checklist For Small Business
Google lashed back with the launch of Google Offers which could very well give Groupon and Living Social a run for their money.
With this type of growth in the daily-deals market, I wouldn’t be surprised if we saw companies like Facebook and Twitter launching their own deal of the day offers.
Until then however, Groupon has proven to be a true advertising beast. What else would you call a service that can deliver thousands of customers to your door in 24 hours?
And they’re not your average customer. They’re sale-snatching, rabid-foaming, impulse buyers that consistently buy 2, 3, even 4 Groupons at a time.
So is Groupon right for your small business? My initial reaction when considering this type of advertising is regarding branding. Do you think that by giving such a deep discount you risk damaging your brand?
If you’re in the Pioneer Valley region here in Western Massachusetts, your offer will reach well over 70,000 people. How much would it cost you to reach this many people otherwise?
Groupon has been getting a bad reputation with some small business owners who lost out big time. From my perspective, these are business owners who never crunched the numbers or had any follow-up marketing systems in place.
The Small Business 5-Point Groupon Checklist
- Groupon and other coupon promotion websites have the ability to drive thousands of targeted visitors to your offer. It’s typical to receive dozens, hundreds, even thousands of orders in a matter of days. Does your small business require a lot of manpower to run effectively? If so, how will you prepare for a substantial increase in website traffic and sales?
- Will your Groupon promotion require a reservation? An auto repair shop running an oil change Groupon, for example, would need to prepare for the increase in phone reservations needed to fulfill orders.
- Typical Groupon promotions consist of 50% discounts on products or services with a 50% fee on all Groupons sold, leaving you with 25% of the retail value. It’s an obvious loss unless your product profit margins are extremely high to begin with. Do you have a plan in place to up sell products? Are you prepared to train your staff on up selling products or services at a point of sale?
- Groupon has an audience of impulse sale shoppers, as such, many will not return later to pay full price for your products or services. Do you have a strategy in place to draw them back? You may consider e-mail marketing, referrel and loyalty programs, or a coupon promotion of your own on alternative products or services.
- Most Groupon buyers are savvy internet surfers and will visit your website to find out more information about you and your business. Is your web design up to date, professional looking and easy to navigate? It could mean the difference between a sale and a missed opportunity.
Considering a Groupon promotion for your small business in Western Massachusetts? Connect with our local Groupon representative Katie Byrnes for more information: @Groupon_Katie
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3 comments
Does Living Social have the same 50% fee structure as Groupon? Is the western Massachusetts subscriber list for Groupon really over 70K people, and do you know what size Living Social is comparably?
Christina, I’ve read many case studies where business owners paid anywhere from 20% – 60%, with and without credit card processing fees. At this point I believe your business, offer, location and negotiating skills play a big role in your promotion fees.
When I spoke with @Groupon_Katie (our Western Mass rep) a few months back, she did confirm the local subscriber list was over 70,000, however, I’m unsure about LivingSocial. I encourage you to reach out to a local representative who can better assist you. Keep us updated!
This is great information. We have been seriously considering running a promotion with Groupon but were afraid we would lose our shirts. The last point you made about Groupon users being savvy and checking out your website was the wake up call we needed to get our website in order before getting started. Just wanted to say thanks!