Are Groupon Deals Worth it For Businesses?

So… I recently posted this email (similar to it) in a closed group that I am a part of. I did change a few details, but I don’t think I’m giving away any trade secrets here. Just the Facts.

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Here’s my question for the group. Do you personally use coupons or in this case, Groupons or Local Deals? I’m 35. I would never call myself a “Bottom Feeder.” My wife and I are subscribed to several Deals sites. We have certain activities that we like to do. If there is a groupon deal that comes up for movie theaters or restaurants that we frequent, we’ll pounce on it. We know the place. They’re obviously factoring in that a portion of the groupon sales will be going to people like me who already know who they are, but if they’re wise, they’re banking on a reaching a group that doesn’t know them by the name. They want the opportunity to get someone new in their establishment. We’ve had the opportunity to try a few places that we never knew we’d like because of them.

My thoughts are that you never know who that customer is. If you’re not preaching first impressions to your staff than you always have opportunities loss. You can’t assume that every coupon/groupon customer is going to rip you off. In Seth Godin’s book, Tribes, he talks about how people are longing for someone to follow. They want a tribe to be a part of and they want someone to lead that tribe. You win that one groupon customer over with your brand and they’ll tell others.

Groupon will tell you (if you ask) that a portion of groupon sales will never walk in your door. While that does allow for some margin of profit, it also is lost opportunities to win over those customers.

Now, we could argue that Groupon has jumped the shark by offering “Groupon products” and other weird deals, but the fact of the matter is that they have LARGE reach if you’re in larger markets. I agree that there are hundreds of ways to attract the right customers, but my guess is that most small businesses are not doing more than the status quo of advertising. (Are you still paying for a yellow page ad?) A part of your marketing plans need to stay consistent. Consistency establishes the Tribe that the followers want and need. However, every once in a while, you need variation that grabs someone’s eye. Note that Google, Facebook, Yahoo, does not keep it’s advertising spaces in the same place. They are constantly tweaking it and moving it around…changing size, location, etc. If they kept it in the same place at all times, we as people would begin to tune it out. Have you ever seen Eye Tracking Studies on Websites? It is extremely fascinating stuff, really.

Anyway, I agree that you will find many horror stories online about folks who were completely caught off guard because of how a Groupon deal affected them. I would argue that for the most part, these are places that have different limitations than we have in a the retail world. We don’t have 20 tables that we ‘have’ to turn over 4 times a night.  What we should have is a better shopping experience than someone can get elsewhere.

When you get them in your store, get to know them. Find ways to reach back out to them later.

By the way, don’t believe a word I say.  All Marketers Are Liars Tell Stories (another Seth Godin book that is GREAT)

Oh and Permission Marketing is a great book too.

(Full Disclosure, those links above are affiliate links. If you buy one of the books, I might make a dime.)

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Agree? Disagree? Thoughts? Bueller?

 

Please note: I reserve the right to delete comments that are offensive or off-topic.

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