The BizFilings blog covering business tips and trends.
Groupon Should be Viewed as a Marketing Opportunity
Published on Feb 18, 2011
Read 'Groupon Should be Viewed as a Marketing Opportunity' at 'Time to Start Up,' the small business blog by BizFilings.
Social buying site Groupon has become somewhat of a sensation in recent months, as the company - valued in the billions of dollars - prepares for an initial public offering this year and continues to generate headlines over its refusal to be acquired by Google for a mere $6 billion.
But even as experts herald Groupon as a genius business model, many businesses that have participated in some of the site's daily deals have actually lost money. Because Groupon relies on group buying power and, hence, massive rebates, companies often walk away with little to no profit.
There is also the risk that many people who purchase Groupons may not align with your vision of an ideal client. They may value price over service and winning them over may be difficult. Before you commit to offering a Groupon, it's critcal to have your post-Groupon marketing plan in place to turn bargain hunters into repeat clients.
You may also want to reconsider your approach to Groupon, and make the deal more about marketing and promotional exposure than sales and revenue. Inc. magazine suggests businesses view Groupon as a marketing investment - and a cheap investment, at that.
"It was a great experiment to see social media at its best," Heather Speizman, co-owner of South Carolina art studio Bottles 'n Brushes, told Inc. "It was the buzz without us speaking a word. It's a great thing for a new business as well. You just can't get a better bang for your buck."
Have you used Groupon in your buiness? Tell us how it went!