So, you’ve probably heard of Groupon – one of many daily deal websites which broker sales for retailers across the nation. You can find some bargains if you’re lucky although there are horror stories for small businesses. For example:-
- Some sellers claim that the split is too high (upto 50%!). They may even pass on credit card charges.
- Bad planning may result in poor customer experience during the redemption period (as a result of bulk redemption).
- Groupon does not target rewards at loyal customers. In the case of a restaurant, loyal customers may not be able to get a table booked!
- Groupon buyers tend not to be the target audience for any given business.
However, deals will fly if they are on the nose. On the flipside:-
- Groupon do everything for you, so there’s zero marketing spend
- You get to keep the contact information for deal takers
- Some customers may forget to redeem their deal = pure profit! These impulse buyers could be upto 20% of the total deal buyers.
- In the case of a restaurant, the majority of Groupon’ers will buy something else during their visit.
In a recent 5 day campaign selling a ‘meal deal’ a restaurant known to us had 920 new visits to their website- 540 reffered by Groupon itself with the rest coming from search as a result of the promotion.
They sold 360 deals. In other words, people instinctively went looking for the restaurant website before they grabbed the deal. Most people wanted to get in on the deal early. Take a look at the Analytics:-
One other interesting observation. 18% of visitors to the website during this period were from London (the restaurant was in Birmingham) and the rest were local. I’m not sure what this says about Groupon, Londoners or the connection between the two cities – however , local deals are clearly the future.