Groupon Train is Worth a Small Business Ride

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Groupon is a fascinating study in the fusion of online and offline marketing tactics to drive local business. Couponing sites have come and gone over the years, but Groupon’s connection to social media is turning it into a bit of a movement.

A typical Groupon offer. Click to enlarge the image.

Here’s the basic idea: People sign-up to receive a once daily offer from local merchants. It’s one offer only, in one of the 29 or so cities (more soon) that have Groupon groups. But, the offer does not kick in until a set number of people jump on board. The offer also involves a buy in. In other words, a typical offer might look like the one in the image here – “Spend $12 to get $25″ from a local pizza place. People who want the deal have to spend $12 to get it. Watching people react to the daily offer is where you can witness the brilliance of this play. Because someone really wants that 1/2 off massage and can’t get it until the set number of people buy, they get very active online pushing the offer out for the participating merchant. (Learn how Groupon works here)

Groupon allows businesses to find new customers online, but then drives them to that local place of business offline. Once they show us, they are already a customer and the business have yet to spend a dime to get them there. Hum, pretty cool.

Groupon groupies are nuts about this tool and you should just sign up for the Groupons, but small businesses of all kinds should take a look at this lead and customer generation tool.

If you’re in a business like pizza or dry cleaning, one that offers coupons anyway, this is a great way to get even more exposure. If you’re in a business that just needs new customers, Groupon might be a big hit. It’s not unusual for Groupon offers to have hundreds of people buy in. Groupon collects the money and sends the business a check. The business then just goes about honoring the Groupons as they show up. (Learn how to get your business on Groupon here)

I’ve used Groupons on several occasions and in all cases it led to me a business I had never done business with before. Get creative and take a good, hard look at Groupon.

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Posted by: John Jantsch on Jan 14, 10 | 7:07 am
Category: Lead Generation, Marketing Strategy, Social Media | Tags: , fusion, goupon

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Jay

groupin train is good
David Siteman Garland

John - Thanks sharing. Groupon just made it over across the state to St. Louis. Tremendous idea.

For small businesses and entrepreneurs, I would say don't approach it like a coupon. At best you will make no money or a tiny bit. At worst you may lose some on the deal.

That being said, it is really a marketing cost. You are guaranteeing people buy/come in. That is invaluable and if you wow them once, you will have repeat customers.

Who doesn't love a deal?
kit

I recommend offering coupons through Groupon to all of my clients. Great concept, don't most of us wish we'd thought of it first?!
REBlogGirl

I use Groupon offers all the time. The Boston Groupon has wonderful offers for ski and spa vacations and even restaurants. We love this - it sends me emails for each new one. I think it's brilliant marketing and more importantly, something I actually use and love.
John Katz

Duct cleaning generally refers to more than just the duct work but also includes all the components of heating and cooling systems including registers, vents, coils, drain pans, humidifiers and housing units for all the systems.
Gary

Gift coupons have been a marketing leverage tool for years and years. a fantastic gimmick, where the coupon giver has already re-coup' ed his/her losses on the gifting by selling volume, rather than on hiking prices.

The markets have even seen increased traffic volumes, by dropping prices, adding in the $10.00 or $20.00 gift coupons and then opening just a little late, for business hours.

Creating anticipation, is the key! Great Blog post, Very informative and tactful!
Chris

LivingSocial Deals is also another big-time group buying site...they are already considered a huge Facebook application company and got into the deals business this past July. They are already in 6 cities with more to come soon according to their site. deals.livingsocial.com
Chris

LivingSocial Deals is another group buying site that is making waves...LivingSocial already commands a huge FB marketshare and got in the "Deals" business back in July just in DC. They are now in 6 cities and more on the way. deals.livingsocial.com
Magenta33

There is a site dedicated exclusively to New York City spas called www.25Tuesdays.com. Every Tuesday there is a $25 spa deal at a different NYC spa.
DefunktOne

What about groupons for on-line only stores?
T60 Productions

Tony: I've been using Groupons in Chicago for the past several months... it's a great service. And it absolutely has turned me on to businesses I normally wouldn't have been exposed to otherwise.
Tracey

I'm a big fan of Groupon too -- and like you, it's led me to businesses I've never used before. And I usually end up convincing at least one or two other people to buy the same coupon. Two things that I think are critical about the service are -- they only have one deal a day (they don't overwhelm me with emails), and the deals are good. Once again, content is king. If the deals start degrading in value, people will stop using Groupon.
Christine Fife

Crazy! As I started reading your post I thought, no way would I want to look at Groupon--I personally am not much of a coupon "clipper" and as a marketer I've never been interested in this type of marketing practice. But, I value your opinion, John, so I went and looked at it. Wow, what an interesting idea! The concept of group sourcing through social media to open up really good deals is unique. I hope the company is savvy enough to pull it off and keep the company going. I'll certainly keep watching them. Thanks for the post.
ducttape

I think they've tipped - Groupon received $30M in Series B funding. (12/09)
Rich Pizzuti

I agree that Groupon can offer a super deal... but I've heard of people having issues with vague ads and merchants who don't follow through. In fact I got a call last week from a women who spent $40 on a photographer who she can't get a hold of, and Groupon says..."uh...you should talk to the business owner". So although Groupon can save some dough, people still need to be aware of what and who they are buying from. Thanks for the post!
ducttape

OK so if you are a business owner, don't do that - there, end of problem
Rich Pizzuti

lol!
Walt Goshert

Powerful to have your prospects promote your offer to friends. Perfect fit for social marketing.
ducttape

there really something additional about the way this one works too - people with money in the game are promoting.
Walt Goshert

So true...when ya have skin in the game, you're much more motivated to spread the word
databasewatchdog

This is a fantastic concept - I can't believe I've never come across this site before. I provide small business marketing on a local basis and plan on interviewing a couple of owners who I can see have used Groupon with huge success. This looks like a great tool to add to the marketing arsenal - thanks for posting about it.
ducttape

Everyone that works with local biz folks should be promoting this tool.
mattstone1916

Cash for coupons! Very cool! It is like selling a discounted gift card on line. Any consumer good can compete on a local level using this thing. And the results are measureable!
ducttape

Yes Matt you get it - you can see why I think it's awesome - I think it is more like gift certificates than coupons, which really makes it even more powerful. The merchant collects the cash whether the user redeems it or not.
Christine Fife

Yes, the concept of a buying a certificate for something or "gift card" is much more appealing to me as a consumer than the idea of "coupons". I think they'd be wise to consider going with that angle rather than coupons.

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