Groupon exploded onto the Internet promotion scene a few years ago and appeared to provide a win-win for customers and local businesses. Customers were able to get a big discount on a service or product. A local business could get a pipeline into a whole new customer base that might not check out the business if not for the great deal.
However, Groupon hasn’t turned out to be such a big hit with all the merchants who tested the waters. For one thing, Groupon requires that merchants provide a sizeable discount on the product or service — you can’t just benefit from Groupon’s promotional leverage by trimming 10 (or 20, or 30, or usually even 40) percent off your usual price. Groupon drives a very hard bargain, and sometimes that’s no bargain for your business.
Of course, that sort of massive discount can be worth it if you end up getting substantial repeat business (at your established prices) from these customers. Unfortunately, that’s another area where many businesses that used Groupon haven’t seen a return on their investment. In fact, more than 40 percent of the merchants have said they wouldn’t use Groupon again.
The main concern appears to be that Groupon attracts bargain shoppers who only used the business’s services because of the cheap rate. They’re more interested in value than quality, so even if they loved the service they got from you, if a competitor runs a Groupon at a bargain-basement price next month, they’re more likely to go there than pay you full price.
Even if they loved your business, they might prefer to wait until you chop your prices again — if you did it once, you’re likely to do it again, right?
That doesn’t mean you should absolutely rule out Groupon as an option. Some businesses can benefit from the promotion, especially if they can easily afford to discount their prices, and if they have specific processes in place to retain the new customers they receive.
Also, customers who have a great experience can provide reviews on your website, your Google site or Yelp. This can be a big help if negative (or generally neutral) reviews have hurt your online reputation in the past. (Customers tend to review you more favorably if they got a great deal for their money, after all.)
Ultimately, the decision of whether to try out a Groupon deal is not one to be considered lightly. It’s important to know all the factors before negotiating a Groupon deal.
Speak with your Ring Ring Marketing expert to get the best advice on whether a Groupon deal is right for you — or whether you’d be better off promoting your business in another way.