Over the past year and a half, a lot of the talk in our office (and at home) has revolved around Groupon. Either someone is commenting on the amazing deal of the day, someone is talking about what Groupon they just redeemed, someone is talking about buying their mom the Groupon for a gift, or a client is seeking our advice on whether or not they should jump on the bandwagon and give Groupon a try. We have talked about it strictly from a consumers stand point as well as a marketers – and there are pros and cons on both ends.
I’ll admit it – I LOVE GROUPON. I am a Groupon-junkie! I have referred so many people to Groupon that I had over $100 in credit at one point. I have bought them as gifts. I have bought them for myself. I have bought them for my babysitter to take my daughter places. Some of the deals are just TOO good! And that is exactly where it seems that some of the problems lie – some deals CAN be too good.
We have had a few clients run deals on Groupon and overall, the experience and the return was pretty good. However, I know from talking with business owners and reading various articles and simply just paying attention to some of the deals being offered, that as good as it may look to the consumer, it is going to kill the business.
Check out this post from a small business bakery/cafe owner. After she posted this, the entry ended up going viral and I have seen at least two different articles written specifically about her experience. {When A Groupon Promotion Goes Bad} {Groupon Nightmares and How to Avoid Them}
Groupon is not for every business and the same “general” rules do not apply to all businesses that use Groupon to promote their business, services and products. Just because the business ran a deal and sold 1000 in 24 hours, doesn’t mean jack-squat to you and your business. Before you start drinking the Groupon-koolaid for your business, make sure you think about these few things that I believe are critical in having success with Groupon or any other deal-making site.
1. Read through everything on Groupon and make sure that you fully understand how the entire process is going to work.
2. Observe Groupon and the deals they are offering for a few weeks minimum. You can learn a lot just by watching what other businesses are offering and how many people are purchasing the deals.
3. Make sure, when you are creating your deal, that you crunch ALL the numbers and know exactly what you are going to make (or lose) by running the offer. Figure in your overhead – labor, products, etc. It all counts! Don’t be naive and just look at the dollar amount you will receive in a check when the deal is over.
4. Have a plan for how you are going to handle the increase in business. If you are a service business, such as salon, and you sell 1000 deals, and you have an expiration date set for 6 months from now, can you realistically fit all those appointments in – when the customer’s want them? If you are small restaurant, will your staff be able to handle in the increase in customers? Just be prepared!
5. Make sure you include disclaimers that are very specific in your deal. Do not leave it open-ended and expect people to not try and take advantage of it. Try to put yourself in the customer’s shoes and go through every scenario possible and make sure you have a response to all of them.
6. Train your employees before the deal goes live. You WILL get phone calls on that day and if your employees, the people answering the phones, don’t know how to answer the customers calls, this will leave a very bad taste in people’s mouths. Make sure everyone knows all the details and how to handle the questions.
7. Don’t expect that just because someone bought the Groupon and then redeemed it, that they will come back again for more. People are coupon-crazy right now – especially in this economy (including myself). We are all looking for the next best deal to come along. For example, I have bought two Groupons that allowed me to get great deals on massages. I used both of them, and they were great. However, I only went there because there was a “deal”. I haven’t been back to either, instead, I am right back at my “regular” spa until the next good discount shows up.
8. Think. Think. Think. Think inside the box. Think outside the box. Just think before you act. If you want to make your deal successful – and not just for the 24 hours it is running online – think about what you are going to need to do to make money, retain new customers and keep your current customers happy.
Happy Grouponing!
