Why Groupon's $25 Billion IPO is Vital to Small Businesses and Communities

Why Groupon's $25 Billion IPO is Vital to Small Businesses and Communities

Group Buying Can Stimulate Growth and Help Others

Kevin Emery VP of Sales- Mojo Social Media

Groupon's meteoric growth and success over the last 2 years has had a pretty significant effect on small businesses in the US. Not only hasGroupon itself grown an astounding 40 million users in just 3 months (December 2010 -March 2011), but there has been a surge of clone sites such asCommunity-Deals.com that have followed their lead. This has brought a surge of new customers into the small and large businesses that have decided to join the marketing revolution that is group buying. According to a story inECommerce Times, "as of March 1, 2011, there were 178 cities with deal-a-day sites reaching 102 million people in the United States." That is significant considering that we are in the worst recession of our great country's history.

With the explosion ofsocial media and the unreal numbers of users,Groupon and it's clone sites have revitalized how businesses reach out to gain new customers. It's risk free, and everyone wins. If you aren't familiar, the way it works is that the business/service will contact the group purchasing site and request a listing of a deal. The site will list the deal on their site for ZERO upfront fee. After the deal goes live and hits the minimum number of sales (as predetermined by the business), it will be posted for a specific time period. Once the time is up and the sale is over, the site cuts a check to the business for usually 50% of the net deal price. That's it. Done. The business gets instant revenue, the customer gets a high value deal, and the site makes their revenue for being the host. All within a 24-48 hour period.

In small local communities, businesses don't always have a big marketing budget. I've heard horror stories of businesses spending thousands with theYellow Pages, only to see little to no results. The word of mouth dynamic with group buying and social media is exactly what local businesses rely on to build their client base. Local sites such asCommunity Deals, also are taking it one step further and incorporating charity fundraising into the equation. Businesses that work closely with a particular charitable organizations can brand the charity on the deals that are posted andCommunity Deals will donate 10% of their profits to that charity. Now there is a 3 way win! By adding the charity into the mix, the business can add the eyeballs of the charity's mailing list or website and boost revenue for both parties.

So when you read about the billions of dollars thatGroupon is racking in, don't get upset that you aren't able to get a piece of the action. Be glad that they have blazed a trail in establishing a very successful industry that really didn't exists a couple of years ago. This industry of onlinegroup buying is accessible to anyone, no matter how big or small your business may be. With the recent tragedy in Japan, fundraising efforts are back in the news. Help pay it forward in yourlocal community buy branding your charity along with your deal and building your business at the same time. Feel good, altruistic business practices I think go a long way in these days of widespread corruption and back room deals. People will see your good intentions and let others know as well.

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