The Big question I hear from small business owners lately is,
“Does Groupon Work?”
Groupon may not be all that you think when it comes to helping you grow your profits.
The Groupon coupon phenomenon has turned the small business world upside down. It seems that more and more smart shoppers are demanding a coupon for just about every business transaction they make.
People are searching online for coupons!
Heck, I do it myself. Whenever the wife and I decide to go out to dinner, I always go to Google and type ‘restaurant name coupon’ in the search bar. Usually something comes up. My wife loves Groupon! What I noticed was that she rarely goes back to pay full price once she uses a Groupon coupon. Why? Because there is an endless flood of offers coming to her email offering the same services.
The question is… is Groupon destroying customer loyalty? Are Groupon users more interested in the next deal and not returning to your business to pay full price? If yes, your offer better have some profit built into it or you will go broke fast!
Groupon has taken hold of the billion dollar coupon market and seems to have cornered the market. Small businesses are flocking to Groupon in hopes to increase business using a Groupon offer.
But… is Groupon really helping your business?
Recent studies are showing that Groupon deals may actually be hurting small businesses and if you are thinking about jumping in you better know what you are doing.
Here is an excellent article that talks about some of the possible shortcomings associated with doing a Groupon coupon. Does Groupon Negatively Affect How People View Your Small Business?
Here is some important advice if you are considering using Groupon!
As a small business SEO specialist I talk with businesses about Groupon quite a bit. The first question I always ask is, does your offer allow you to walk away with a win-win situation. I am not seeing that in many of the Groupon business transactions. Groupon takes quite a bit of money from you and if you do not structure your offer properly you almost always lose money.
Here are 3 things that can hurt the Groupon – Small Business experience:
- Many business owners are not seeing the repeat business because coupon shoppers don’t return unless there is another coupon. The fact is, if your offer is a losing proposition you may never see the repeat business you hoped would make the offer worth the effort.
- Some employees when they see a Group on coupon react negatively towards the patron. Service may suffer which may lead to the up surge in lower Yelp rankings. If the Groupon offer is not a good one for the business, employees may perceive Groupon customers as coupon mooches. They may treat these customers differently.
- Many small businesses are not seeing a good ROI from the coupons which can lead to some serious cash flow problems. Sorry folks, but coupons should turn a profit even if it is a small one. If Groupon advises you to price your offer too low, it can lead to devastating results for your small business especially if you already have cash flow problems.
If you are a small business be very careful about how you position yourself using Groupon. The big repeat business you hope to achieve may not come, your employees my learn to hate Group on customers (calling them mooch on customers) and positioning your offer to lose money may hurt your bottom line.
Make Groupon work by structuring a win – win situation!
Be smart and only do it if you can make the business transaction a win-win situation. Remember, the Groupon rep you are dealing with does not know about your profit margins and will try to get you to fashion a deal that may hurt your bottom line. Do not assume that taking a loss in your offer will lead to repeat business. Studies are showing this may not be the case.
Before you sign on for a Groupon coupon!
Sit down and do the math first. Make sure Groupon works for your business. If the ROI is not there, walk away and find other marketing solutions to increasing business. Don’t jump into Groupon just because everyone else is.
If you are looking to attract more customers to your business, Local Internet Marketing is the one area you should not ignore. If you would like to learn how to put your business in front of more customers using Local SEO contact Jeffrey Taylor at 602-538-5661 or visit Local Goldmine and get a free web analysis and consultation.


