Using Groupon for your business

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Groupon, audit, accounting, CPA, advertisingSome businesses avoid running special promotions and discounts with the view that this will tarnish their brand or reduce the value of the product or service they have worked hard at creating. However, some businesses find that offering special promotions and discounts through a deal website, such as Groupon, are an effective method for advertising and drumming up new customers. Groupon deals often reach people looking for an adventure and not always for something cheap to do.

Getting started

Before running a Groupon deal, there are a few steps to evaluating whether it is right for you:

  • Do some research on the clientele Groupon reaches
  • Talk to other business owners in your network
  • Utilize Groupon’s Business Resource Center

Pros v cons

If you decide to use Groupon to advertise your business, there are a few pros and cons to consider.

The first pro of using Groupon relates to advertising. In fact, this is an excellent way to advertise your business as the potential number of customers it will bring to your business is the primary benefit to using Groupon!

With the potential to bring in a significant number of people, Groupon deals may come with a few cons. It is important to consider how your business is equipped to handle this. While you prepare for the influx, be mindful of the number deals you are willing to sell or how much time you give customers the chance to buy. Also, keep in mind that some customers will forget to buy the deal and come in anyway while others will buy the deal and not redeem it before the expiration date. These factors will affect how much inventory or staff you will want to have ready. Taking time to consider the effect of the advertisement will help you avoid having a shortage or surplus of staff and/or inventory.

While we have established that Groupon will attract people to your business, does this help you in the long term? The influx of traffic may allow you to use the promotion to create and build long-term relationships. These customers are looking to try new things, explore the city and enjoy the experience. Meeting their expectations can have them coming back for more. This traffic also has the potential to attract the bargain buyers. These buyers typically will not purchase anything in addition to the value of the coupon. It does not mean that they will not return, but they may be less likely to return on a frequent basis.

Making a profit

With the above pros and cons, you are still in business to turn a profit. Not every Groupon promotion you offer will result in a profit. Not only are you discounting your product or service, but Groupon will take a cut as well. Be sure to factor this into the promotion you create. For instance, are there additional items that will complement the product or service that will be available? How likely are they to purchase the complimenting item?

Understanding the above pros and cons will help you create a promotion for Groupon that best fits your business goals and potentially create lasting customers while not sacrificing quality, service or margin.

Sherry L. Staggs