Groupon is a popular website and app that allows you to purchase products and services at a highly discounted rate. Many businesses use Groupon, not as a moneymaker, but for exposure. The average savings for the customer is anywhere from 50%-70%, so obviously the company offering the Groupon has to absorb that cost, plus the cost of advertising with Groupon. However, if it brings in more business and creates repeat customers it can be a very valuable investment. The question “does this work positively for my business?” now comes into play. Here are a few ways to decide whether or not it does:
1. Determine what Type of Customer You Attract and What Customer You Want to Attract – The fact is that some people feel that using anything even remotely related to a coupon is “beneath them.” So if you are an upscale business looking to only attract customers in the Black AMEX social group, then Groupon probably won’t attract the right clientele for you.
2. Do The Math – On this one, I prefer to direct you to an excellent article that goes over this in a very educated and precise way. Read that article here.
3. Remember that Groupon is an Advertising Tool – Too many business owners decide they want to start a Groupon deal and are simply looking for large profits. Groupon is a way to LOSE money more than it is a way to make money. At least when you look at it on an immediate basis. Overall, it can be a great way to gain new customers, but don’t expect it to increase your profits simply from Groupon sales.
Are you a business owner that has used Groupon for your business? Was your experience positive or negative? Comment below and share your story.