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Do you recommend Groupon for your clients?

by tkhowse
16 replies
The owner of a hair salon asked me if Groupon would be a good tool for publishing a coupon that I am putting together for her.

I told her that I would get back with her on the subject matter.

Have any of you utilized Groupon for your clients? If so, has that promotion resulted in an increase in sales? Would you recommend it for small businesses?

If not, what are some good tools that you have utilized effectively for getting the word out about local business coupons on the Internet?

Thanks!

-Timothy
#clients #groupon #recommend
  • Profile picture of the author MichaelHiles
    You can recommend Groupon until the cows come home, but most businesses who even want to do a deal of the day will find themselves on a lengthy waiting list. Groupon won't even talk to you directly. You submit your idea for a deal, and they'll call you if they decide it's something they want to do.

    I've managed a couple of successful Groupon campaigns for clients. One was abysmal failure because they wanted to try and make money on the deal of the day.

    The other was a rousing success because they had a strong back end and understood that the Groupon deal was a loss leader to pick up new customers.
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    • Profile picture of the author TJ Kazunga
      That's correct - without a strong backend and upsell strategy there's a strong chance that Groupon will actually hurt your clients business.

      A client was going to launch a deal but once we started crunching the numbers it didn't make sense. The upsell conversion required just to break even was unrealistic frankly.

      My thinking is to a large extent it depends of your location. I'm in London which is a massive city. The client was in a small exclusive suburb. Now, Groupon deals are London wide meaning that people would probably come from all over London for a 75% discount but there's no way they would become regular clients and travel across London to pay normal rates.

      Whereas if you're in a smaller town then your initial Groupon traffic is pretty local anyway. Also, in my experience Americans are more used to travelling further for shopping so that should be taken into account.

      I advised that the client would be far better off developing their own local social media fan base and offering their own exclusive deals that way.

      I personally believe that most of the Groupon "success" stories are based on the initial cash boost and don't look at the long term cost to a business that Groupon can have.

      It's great for consumers and Groupon no doubt, but I'd look long and hard at the numbers before encouraging a client to take part.

      Interesting blog psst below discussing this very issue...
      Groupon Reviews: Worst Marketing For Your Local Business -
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      • Profile picture of the author mclpro
        I don't disagree with TJ, but there might be a little better way of getting the word out about a hair salon- if you put a coupon on a custom mobile page and had fans like you to redeem it through a QR code- Promo Products + QR Codes = Facebook Likes » McLoughlin | Promotional Marketing Done Right.

        She would just need a computer present to verify whether or not they liked the promotion.

        She could also re-use the promotional product if she used an EZ code- EZ vs QR Codes » McLoughlin | Promotional Marketing Done Right.
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        Dan Verhaeghe
        Marketing Specialist
        McLoughlin Promotions
        http://www.mcloughlin.ca/insights
         http://www.twitter.com/mclpro

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      • Profile picture of the author joshril
        Originally Posted by TJ Kazunga View Post

        That's correct - without a strong backend and upsell strategy there's a strong chance that Groupon will actually hurt your clients business.
        Ahh Groupon...

        A solid back-end strategy is the key to success with any type of promotion like this. If a business can continue to bring the customers back in after they redeem their Groupon offer, then it can be successful for many businesses.

        Depending on the business type, margins, and upsells as mentioned above, some businesses can do quite well on the initial offer, but again, the key to success with Groupon or anything like it is turning the new clients coming into the door into REPEAT customers.

        --Joshua
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  • Profile picture of the author John Williamson
    Definitely depends on the niche and the market. Groupon is great for some businesses and useless for others.
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  • Profile picture of the author tkhowse
    Thanks for all the good information. This is very helpful.
    Can you think of other local coupon directories that might be worth publishing coupons on for a business like a hair salon?

    Thanks!
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    • Profile picture of the author joshril
      Originally Posted by tkhowse View Post

      Thanks for all the good information. This is very helpful.
      Can you think of other local coupon directories that might be worth publishing coupons on for a business like a hair salon?

      Thanks!
      Why not setup a strategic alliance with a non-competitive local business and have them distribute the coupons? It's targeted and effective if the offer is good.

      With upsells and a good system for bringing clients that redeem the coupons back in the door, it could be huge for the hair salon, and you could make some nice money as well.

      I have a free recording on my blog with Robin Elliott about setting up strategic alliances/joint ventures between businesses that might help you. (No opt-in or anything like that)...
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  • Profile picture of the author thomasmps
    ok ok if you actually want answers to the groupon type sites ,I have the answers just ask. also if you want to get your client on the schedule just shoot me a PM. There alot of misconceptions on how these things work

    tom
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  • Profile picture of the author thomasmps
    You can actually limit how many vouchers are sold on the deal site.you can always negotiate the splits as well.

    tom
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    • Profile picture of the author cscarpero
      From what I've read, Groupon is very one sided in their dealings. The deal of the day idea works well in certain niches, if it's a market with fixed costs like skating rinks and bowling alleys. The Groupon people need to step up their game of customer service with all the new competitors coming on to the scene.

      Living Social seems to be a much better deal for merchants from what I've read. They also are developing products to help the merchant come up with backend customer relationships. Yea!
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      I'm an online marketer and mortgage loan officer.

      Connect with me at www.Scarpero.com

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  • Profile picture of the author herbalexcel
    I have recommended groupon with good success to some brick and mortars...
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  • Profile picture of the author tkhowse
    Thanks for all the feedback so far. I'd like to let you know more about her business model, so that you can evaluate these promotional tools in light of it:

    Her business model revolves around providing high-quality hairstyling services to her clients. She does not want to compete too heavily on price. She's thinking about discounting several of her hairstyling services on her less busy days at around 30%.

    Now, would Groupon or Living Social allow her hair salon to publish a coupon that is 30% off? Or would it have to be a steeper discount?
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  • Profile picture of the author thomasmps
    yes they COULD allow her to discount 30% but they probaly wont. She should offer something lower cost like eyebrow threading for the daily deal,then when they are in the salon she could offer other services(upsell). Tim, I will tell you that this works like a charm. I see most deals are discounted between 45%-80% from retail

    If you do work with a chiropractor who also does massage then you could be a hero,in daily deal world.
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  • Profile picture of the author zoro
    Groupon takes about 50% of the sales. Most business will lose money in the short term and perhaps gain a few new repeat cutomer over the long term. I would be careful recomending Groupon unless your client fully understands what they are committing to.
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  • Profile picture of the author jrod014
    I think groupon is a great way to promote a business BUT it is intended for targeting repeat business by giving an initial deal.

    Most of the deals on Groupon are at %50 off the service/product with the hopes of having that buyer be a repeat customer.

    The up-sell is a great strategy to have. But if you client does get a deal on groupon make sure they implement some sort of list building strategy with it.

    Example would be to accept the groupon coupon and have the business ask the person to subscribe to the newsletter for future deals like groupon but throught their newsletter.

    ANOTHER GREAT WEBSITE LIKE GROUPON IS WWW.LIVINGSOCIAL[DOT]COM

    The Best Daily Deals in Dallas - 50% Off Bubble Tea

    Jerry
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