Groupon And The Social Media
Groupon and the Social Media
Groupon and the Social Media
Groupon has been hailed as the new miracle advertising tool for social media marketers and entrepreneurs. It has also been accused of being a ruthless corporate giant, preying on the ignorance of small businesses. Ever since it started in November 2008, Groupon has had a massive impact on the way many local businesses promote their products and services.
So How does Groupon work?
First you agree to become a featured business on their network. You then reduce your product or service price by between 40% and 80% often around 50%. Groupon promotes the deal to hundreds of thousands of people in your area and gets new customers through your door. For every deal, Groupon keeps a commission of 50% of your drastically reduced price. Yes, youve seen it right, your business only gets half of your drastically discounted price. The deal sounds pretty amazing because customers will get attracted to it, but if you belong to a small scale business industry, this deal may sound hilarious or even tragic. It may be or may not be the start or end of your business career, who knows?
Its easy to get swept away by trends and promises of future earnings but Groupon is not for everyone! If giving Groupon 50% of an already massively discounted price doesnt raise some red flags in the marketing plan, then you may be looking at this all wrong, because professional marketers dont like giving money away.
There have been a number of companies that have miss calculated the potential impact of Groupon on their business and have gone out of business as a result. One small company selling hand made cakes expected to get in the region of 200 to 300 orders and decided they could afford to loose 2 per cake, even though they were a small business with tight finances. After all spending 600 on advertising is not beyond their normal budget. Unfortunately they received over 4,200 orders and the losses went higher than 2 per cake, because now they had to pay overtime to their staff to cope with the level of business and they had to take on additional staff that we slower and therefore more expensive per cake. The result was the within 3 months this once thriving little family business that simply wanted a few extra customers, was gone.
A good marketer calculates repercussions of their actions first before committing to something new. Your Groupon deal could change your business completely and it could dismantle your existing loyal customer base. It is vital that you carefully consider these points before you proceed with a Groupon deal.
1. Are you willing to potentially replace your customer base with one time only coupon holders for the entire time that theyre valid?
2. Are you able to cope with a massive influx of new business for a short time?
3. Can you service the deal financially?
How To Make Groupon Work
There are several types of business for whom Groupon can be a massive lifeline and for whom the returns can revolutionise their business in a positive way. It is important to ensure that your business is suited to this type of marketing.
Here are a few key factors that can make the deal perfect for you.
1. Does your business have a very high customer acquisition cost?
If it costs you 75% of your first sale to your existing customers to get those customers, either through traditional advertising, existing discount coupons, sales commissions or a combination of these then there is great potential for you to simply give that cost to Groupon and have guaranteed returns.
2. Do you have a really good up sell and cross sell system?
If you have a business where people can buy lots of additional items that are complementary to your offer and that would allow you to boost the value of the sale, then you could potentially use the Groupon deal as a loss-leader to get people through the door (or onto your website) and then sell them more products.
3. Do you have a follow up system to sell more stuff in the future?
If you have a proven system for following up with customers and selling them more items in the future then you potentially have a great way to add people to your customer base, that you can then send your own deal coupons to. Remember Groupon customers love deals, so you just need to tap into that and you are made. Plus your own deals dont require you to give Groupon 50%!
So Groupon can be either a great offer to build your business, or the end of your business - you just need to ensure that you plan it right and work with a marketing professional that understands how to make it work for you.
by: Chris Ball
Planned Giving Brochures And Brochure Layout Ideas Rewards Yourself Choosing Body Restorative Massage And Also Attractiveness Remedies With The Massage Plasma Cosmology And Bio-molecular Self Assembly Affordable And Low Cost Insurance Policy/coverage Options The Ups And Downs Of Outsourcing B2b Telemarketing To Offshore Firms Lsd History, Uses, And Dangers Prediction Evaluation And Investment Market Dangers Of Obesity And How To Lose Fat Advantages And Modes Of Online Hotel Booking The Top 4 Exercises To Eliminate Cellulite And Ways To Carry Out Them How To Hypnotize People And Don't Let Them Know The Ten Best Ways To Make Sure Your Package Arrives Intact And Pristine Little Ones Trigger Self Conscious Mother And Father To Help Bypass Lunchtime. Kids Activity Stand U