How To Advertise Your Business On Groupon

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Thinking about advertising your business using a daily deals site like groupon? Here's everything you need to know to get started today.

Thinking about advertising your business using a daily deals site like groupon? Here's everything you need to know to get started today.

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  • 1. How to Advertise on Groupon
  • 2. As a typical consumer, chances are you’ve purchased a Groupon in the last 12 months. Last year, over 44 million unique customers purchased at least one Groupon. That’s 1 in 7 people in the US. If I have my math right, that equates to a whopping 14% of the population.
  • 3. There are definite pros and cons, but ultimately, you’ll need to decide what’s right for your business. Let’s take a look at every aspect you should consider when choosing to advertise on Groupon.
  • 4. What is Groupon? Groupon is short for group coupon. It’s a daily deal website where customers purchase discounted gift certificates, mostly for local businesses. ! Groupon was created in 2008. Since then, it’s grown exponentially, to the point where it even turned down a $6 billion dollar buyout offer from Google in 2010.
  • 5. How does Groupon work?
  • 6. It liaisons between local businesses and subscribers. Everyday, Groupon sends out an email to each of its 250 million subscribers. The email showcases a special, location-specific deal, or Groupon, that’s only available for a limited time. Because the deals are usually local, Groupon targets their emails to subscribers from that particular location. Groupon works as a middleman.
  • 7. In most cases, quantities are limited and, often, the amount of Groupons each customer can purchase for a particular deal is restricted. A customer can purchase a Groupon for themselves, as a gift for someone else, or both.
  • 8. Groupon acts as a gift certificate that you either print off or save on your smartphone (you’ll need the Groupon App). To redeem, you provide your printed gift certificate or show the barcode on your smartphone. Unlike with traditional coupons, with Groupon, you must pay upfront.
  • 9. Most Groupons are 50% off the retail price. Discounts can vary, even up to 90% off. Most Groupons also feature fine print that defines what’s included and excluded in the deal.
  • 10. Groupon relies heavily on social promotion. It offers a robust system of referrals, where Groupon customers get monetary credit for each of their invited friends. The credit can then be used to make future purchases on Groupon.
  • 11. Customers are very likely to share Groupons with friends. Each deal features social media icons where users can email, share, tweet, or pin directly from the page. It’s also convenient to forward the email to friends who may be interested in the Groupon.
  • 12. Each deal shows how many people have purchased a particular Groupon. This is a powerful motivator to get customers to buy. Another important feature of Groupon is the social proof aspect of the deal page.
  • 13. What type of businesses do best with Groupon? According to statistics, the most popular type of business on Groupon is food-related. Restaurants fare best on Groupon. A distant runner up is groceries, followed by entertainment and clothing and accessories. Least popular, possibly due to cost, is vacation or travel.
  • 14. Does Groupon bring repeat business? There’s been a lot of debate around this subject-- can Groupon really lead to repeat business? Groupon reports that over 90% of customers plan to return to business for which they purchased a Groupon.
  • 15. Unfortunately, some businesses treat Grouponers as second class customers because of their discount. This translates to negative customer experience, negative reviews, and a plethora of one-time customers. Treat Groupon customers with the same level of respect as you would any customer.
  • 16. At least 48% would do it again, and 32% were unsure. These numbers indicate a rate of success. In fact, 66% of responding businesses showed a profit from the promotion. It’s important to note that only 19% of businesses would not use Groupon in the future. 32% 48% 19%
  • 17. What are the costs involved? Groupon requires no upfront payment. Instead, Groupon takes a fee from your revenue. At the time of this writing, that fee is 50% of your total.
  • 18. Here’s how it works out: Your service is worth $100. You slash the price by 50% to satisfy Groupon’s discerningly frugal audience. You stand to earn $50, but Groupon takes 50% of that, leaving you with $25.
  • 19. Yes, it’s a harsh pill that you only make 25% of your normal retail price, but Groupon should be looked at as a marketing strategy, particularly a loss leader. Loss leaders get the customers in the door. Your challenge is upselling the customer in the short term and developing a relationship in the long term.
  • 20. When do you actually get paid? Groupon typically pays businesses in thirds. The first 33% is paid within 7-10 business days, the second 33% is after the first month, and the remaining 34% is after the second month. ! You receive payments by check or direct deposit.
  • 21. Think Groupon as an avenue to attract new customers. When you consider the huge email subscriber base of Groupon in combination with the estimated 15 million monthly site visitors, Groupon can be a worthwhile marketing strategy. Groupon allows your business to take the spotlight and leverage its huge subscribership for mass marketing.
  • 22. Another opportunity to leverage Groupon is by increasing your profit margin. For Example, if you normally sell a dozen cupcakes for $7.50, but they are worth $15, list your Groupon retail for $15, and sell for $7.50. You make $3.75, but that’s much better than making $1.88.
  • 23. Alternatively, you can offer a gift certificate at a 50% discounted rate to increase revenue. This works best for fixed cost businesses. For example, if you operate a gym, the costs of operation do not fluctuate based on the amount of customers. So, offering a $50 gift certificate with the value of $100 will bring more customers into your gym, and increase revenue.
  • 24. It’s important to note that Groupon isn’t a one-size-fits-all model. Your business may benefit more from using Groupon as an advertising medium. Another business can use Groupon to unload extra inventory. Here’s some ways to best use Groupon: What are the best strategies for using Groupon?
  • 25. This is the most popular way to use Groupon. Businesses hope to gain new customers from advertising with Groupon. It’s commonly known that once you can get a customer to say yes to your product, you can persuade them to buy more. 1. To gain exposure
  • 26. If you have more product than you can sell, there’s no need to panic. That’s what Groupon’s for. ! It’s better to get some revenue than no revenue. Slash those prices and get inventory moving. 2. To sell extra inventory.
  • 27. Whether your business is on Yelp, Google+ Local, Urban Spoon, TripAdvisor, or somewhere else, it’s dead in the water without social proof. You need someone to write about you, hopefully in a positive way. Selling a Groupon gives you possibilities to get noticed and reviewed. 3. To get reviewed
  • 28. Sometimes it’s a numbers game. If you’re new, it’s not necessarily about getting the most value, it’s about getting customers in the door. Once inside, you’ll be able to win them over. 4. To get customers
  • 29. There are no good metrics available to decipher which deals are morely to go unredeemed, but if it happens to your business. You stand to gain considerably. According to a study performed by Rice University, businesses stand to add approximately 30% to the profits earned during the Groupon promotion. 5. To capitalize on unredeemed Groupons
  • 30. The best way to figure out what’s popular on Groupon is to take your time and look through what’s selling now. Current deals are a good barometers to tell you what average Grouponers in your area are looking for. How do you come up with a good deal?
  • 31. A good strategy for coming up with your own Groupon is to consider your second most popular product. If you already sell your primary product, there’s no need to slash those prices--it will only drive down its perceived value with your current customers or, worse yet, they’ll just buy your Groupon for it, instead. What makes a great deal? A greal deal offers value to the customer at a price they cannot ignore.
  • 32. Once your deal is live and customers purchase the Groupon, it is usually available for immediate redemption. Some companies get a huge surge of traffic from a Groupon. This is great, if you can handle it. What type of traffic can you expect?
  • 33. Alternately, you can set up restrictions, such as appointment times, that prevent a deluge of customers arriving all on one Saturday.
  • 34. Another thing to consider is timing. If your product is seasonal, timing is everything. If you’re offering a Groupon to go ziplining in the middle of Winter, you’re not going to get as much traffic as you would if you’re advertising in Summer. You may have a decent amount of purchase, but they won’t redeem until later in the year, if at all.
  • 35. Do you get the information of the people who buy your deal? Groupon provides you with the email addresses of the customers who purchase your deal. You should definitely use this information legally and ethically, as outlined in the Groupon privacy statement. Although you cannot automatically add these email addresses to a subscriber list for your own newsletter, you can most definitely ask.
  • 36. Additionally, Groupon will provide demographic details about your customers via the Merchant Center or their new Gnome tablet.
  • 37. What are the logistics of signing up? Now that you’re ready to sign up for Groupon, here are the easy steps you need to take: ! 1. Go to the Groupon Works sign up page. 2. Fill in all of the necessary information and submit. 3. Wait for Groupon to review your information and contact you. 4. Work with a Groupon specialist or use their Deal Builder template to create your own Groupon. 5. Sit back and wait for the redemptions to start rolling in.
  • 38. Is Groupon the best daily deals site? If you’ve heard of Groupon, chances are you’re aware of Livingsocial. Livingsocial is Groupon’s biggest competitor, but most customers usually shop both. It may be beneficial to alternate between both and find out which one brings you the most loyal and compatible customers.
  • 39. Click here to tweet this presentation. Join The Community: www.FitSmallBusiness.com See the full article here