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Group Buying - Is Groupon Right for Your Business?

by Nicole Nimmer Agen | May 3, 2011
Assessing whether group buying, such as Groupon, is right for your business.

Group buying...will it last or is it just a passing trend?  As with any marketing endeavor, you have to proceed with caution.  Marketing is a disciplinary way of trial and error, and when done carefully, a way to create brand awareness, new customers, and customer retention.  Any other way of acquisition is a bit of luck and bonus.  As a person studied in the art of marketing, I view any marketing sales pitch with caution.  Recently, I visited the Groupon website to see their sales pitch.  Some of their testimonials raised a red flag of caution.

Here's one:

"I believe Groupon is definitely better than other forms of advertising because you can actually see a return on it. This was huge for us. Our Groupon sales were 27% of our total sales this past month."
 
The quote says, "Groupon sales were 27% of our total sales."  This could be frightening considering Groupon takes 50%+ of the Groupon sale.  Statistics not readily identified can be construed in multiple ways, either negatively and positively.  If this percentage is based on the value of the Groupon with no upsell, than this number is a negative affect on net revenue.  Know what you're getting into whether it be the potential of negative or positive affects on revenue by setting goals and creating a plan to turn new customers into long term customers.  

Here's another one:

"Groupon far out-weighs any other advertising or free advertising program out there."
 
This one was scary because of the words, "free advertising."  I fear that this business owner is trying to survive on "free" advertising.  Scary!  If you think any advertising is "free" than I would have to question one's preparedness for Groupon.
 
Groupon is taking over many businesses by storm with its popularity.  They had a Super Bowl ad, it must work, right?  Maybe.  Maybe for the short term.  If you want long term business success, then you need to have a plan, goals, action, and measurement.  We're helping business owners sort through the pros, cons, and items to think about when considering Groupon or other group buying opportunities.  If you would like more information about group buying, please email nicole.n@360direct.com or call 414-464-5000.

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