By: First Union
How to Make Groupon Work for Your Small Business
Groupon is certainly popular with its users—there's no denying that. But is it worth it for the small business owner to go ahead and list a promotion or deal on Groupon? Will the ROI be sufficient in the end? It's all about thinking it through. Just randomly advertising a deal or coupon could end up costing you much more than you expect, if you don't proceed carefully.
Groupon focuses largely on local markets. Small businesses can offer vouchers, promote specials, give out coupons, as this is a platform that seeks to get you in front of more regional users. Essentially, the people will buy whatever deal interests them and Groupon then takes a percentage as their cut.
Generally speaking, Groupon does require the businesses to discount their services by a minimum of 50%, and depending on the industry etc…this could be much more. They then will take fifty percent as their payment for advertising your promotion. So again, the question, is it worth it? Or more importantly, can you make it work for your company?
Groupon customers often are just out to try something once; meaning, they don't necessarily intend to become a regular customer. So one thing you might try is to package services and deals. In other words, structure the discount so that users have to buy multiple offerings rather than just a single one and done deal. Lessons might work this way. People have to buy a minimum of two for instance —this may be enough to hook them to go for more.
You also want to set some limits on the deals being offered. For example, it may be for new customers only, or you could also advertise it as one per person; additionally, you may say one per visit.
The bottom line is that yes, Groupon has a solid strategy and a good business model. It's fairly easy to use and does gain you decent exposure within your area. Just make sure you have a plan going in and you don't get in over your head.
First Union Lending has helped many businesses with their Groupon strategy. With our business loans, your business will not only succeed but it will thrive. Give us a call to find out what we can do for your business!