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The Problem With Groupon: Why Small Businesses Fail to Realize the Opportunity

As a small business owner, have you felt skeptical about using Groupon to promote your company? If so, you’re certainly not the only one. Many businesses view Groupon in a negative light as they feel it positions them as a cheap coupon business. Not only do they have to share a portion of their already reduced profits with Groupon, but they also have to deal with the bargain hunting customers that Groupon brings in.
If you agree with everything said above, I highly encourage you to adjust your mindset about Groupon. The truth is that Groupon can offer an enormous amount of opportunity for your business. The mistake that many small business owners make, though, is looking at Groupon as a tool for temporary spikes in traffic. Instead, the smartest and most successful businesses embrace Groupon for the longterm value that it can offer.

To help change your perspective on Groupon to a positive one, here are several reasons why it should be a welcomed addition to your long-term marketing plan:

It creates tremendous exposure for your business.
Yes, there are a lot of consumers out there looking for deals, and offering a Groupon can attract these people that are not yet familiar with your business to make a purchase. While this audience may not ordinarily have paid full price for your produce or service, taking advantage of your Groupon can show them the value that your brand offers and convince them that your full-price is worth it for future purchases.

It provides a great opportunity to move inventory.
Naturally, you’ll have some inventory that is slow to move, and using a Groupon to move this product can be a smart business decision. Keep in mind, however, that you’ll want this product to leave a positive lasting impression in consumers’ minds about your brand. If you use a Groupon to unload junk or a faulty product, your use of Groupon as a longterm marketing tool will not be successful.

It makes for an effective relationship building tool.
While incredibly annoying to some small business owners, you will have existing customers that will take advantage of your Groupon deals. The key is not to treat these customers as a just another cheap customer with a coupon. Instead, continue to treat these customers like royalty and view the Groupon as an opportunity to show your appreciation for their loyalty to your business.

The bulk of your Groupon traffic, however, will be from consumers that have little familiarity of what your brand is all about. This is why it is absolutely critical that you offer these new customers white glove service. Your ultimate Groupon marketing goal is to earn longterm customers, not just spikes in traffic. Make sure to show them the value that your business offers and why your products and services are worth paying full-price for.

It generates incremental income.
If your business has a fixed-cost structure, you can especially benefit from using a promotional resource like Groupon. For example, if you operate a kids’ open play business where the operating costs remain the same regardless of the number of patrons that you have, offering a Groupon can earn you welcomed extra cash by bringing in new bodies to your facility. In this scenario, you are not only using Groupon to create awareness for your business, but you’re also creating a nice influx of incremental cash that you may not have had without the promotion.

Don’t make these all too common Groupon marketing mistakes.
So now that we’ve talked about the many benefits that Groupon can offer to your business, let’s take a moment to touch on an all too familiar scenario: the small business owner that complains that Groupon brought her cheap customers that took the discount and never visited her business again.

This business is a hair salon, and the owner agreed to offer a Groupon that gave $50 worth of services for $25 in an effort to attract new clients. However, instead of being cordial and welcoming to these new Groupon customers, she griped every time a new customer came in with this deal. In addition, she showed this frustration by rushing them through their time in her chair. As a result, the majority of the new traffic that walked through her door via Groupon chose to never return.

Instead, if the owner of the hair salon had taken a longterm approach to how her Groupon marketing efforts would pay off, she would have seen that being friendly and courteous to these new customers could have yielded her loyal, longterm customers that would continue to produce revenue for her in the future regardless of a discount being offered.

Another mistake that this business owner made was how she structured the Groupon deal. For example, it may have been more profitable for her if she had made the deal $100 worth of service for $50. This could have helped to open up the door for more cross-sell opportunities, such as makeup or a manicure/pedicure. The most successful business that take advantage of Groupon find ways to use it as an opportunity to cross-sell and introduce new customers to their wide variety of offerings.

All in all, Groupon is a fantastic promotional tool to attract new customers and give them a taste of your products and services. Ideally, if your business goes about Groupon marketing the right way and takes a longterm approach, these customers will happily return and pay full price.

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