Anyone sold through Groupon?

[crombie13]

Thinking of signing up to Groupon to post an offer onto it.

Has anyone done this before? What are the costs involved?

 

[martin_frost]

The cost is typically 50% of sale revenue.

But, its not a case of decide to use groupon and it happens. You submit an application and groupon will decide if your worthy, literally.

 

[Uzair Kharawala]

We use Groupon, Amazon Local & Travel Zoo on a regular basis. It helps us to grow our database of local customers very easily & quickly.

As you know every business needs leads and to get every lead costs money. However, working with these companies, you get a direct customer for free and the it is up to you that they turn into a lifetime customer, even if you don't make much profit on the first transaction. There is no set up or upfront fees to run the offer, they take a %. You can negotiate and get a better deal than 50%.

If you are a new business (or existing) you can pretty much have literally thousands of paying customers within 1 year if your offer is good. This also helps with our social media as we ask the customers to give us feedback on our FB, Twitter platforms.

Hope this helps.

To Your Success.
Oz

 

[Hook Solutions]

We have clients that use Groupon successfully, they like to use it as part of a larger campaign and it certainly works to boost sales as well as spread the reach of their product.

 

[localex]

We use Groupon, Amazon Local & Travel Zoo on a regular basis. It helps us to grow our database of local customers very easily & quickly.

As you know every business needs leads and to get every lead costs money. However, working with these companies, you get a direct customer for free and the it is up to you that they turn into a lifetime customer, even if you don't make much profit on the first transaction. There is no set up or upfront fees to run the offer, they take a %. You can negotiate and get a better deal than 50%.

If you are a new business (or existing) you can pretty much have literally thousands of paying customers within 1 year if your offer is good. This also helps with our social media as we ask the customers to give us feedback on our FB, Twitter platforms.

Hope this helps.

To Your Success.
Oz

Hi - quick question - can you please let me know how with Groupon "you get a direct customer for free" (per your post above)? Do you not have to pay them a significant commission for bringing customers through the door?

Dee

 

[Uzair Kharawala]

Hi Dee
What I meant that there is no set up fee. For us it is a no brainer, we have a few digital downloadable courses which we sell, so there is no cost (or very very low cost) for delivering the downloads. Whatever we sell is pretty much pure profit and new clients which we can upsell in the future.

Merry Christmas.
Oz

 

[mconridge]

We ran a promotion with them during the summer for a couple of Paddling Pools under their Diredt Dispatch model, where we dispatch the item but include no details of who we are so the customer thinks it's from Groupon.

Wouldn't do it again unless we had a product line I was desperate to shift.

 

[localex]

Hi Oz - agree for you it sounds like a great way to market.

For those companies which have lower than 100% gross margins (which is most companies!) the Groupon model is more debatable.

 

[elephantfrills]

So are you not allowed to give the customer any details of your company? How do customers turn into lifetime customers if they do not know about your company?

 

[Uzair Kharawala]

So are you not allowed to give the customer any details of your company? How do customers turn into lifetime customers if they do not know about your company?

That's not quite right. Once the customer makes a purchase for our offer, they are directed to our website where they need to fill in a form. This form is linked to our Mailchimp database and also sends an email to us.
We then redeem the voucher and book the person on a course or send the product. There is no way you can make money with these offers if you don't try and make them into a lifetime customer or have some kind of upsell. That's my humble opinion.

 

[MyEventBucket]

You have to look at the long term benefits here. I haven't done deals with Groupon but I'm just about to do a fashion show through Wowcher which has been approved. They will email 1 million + people with a link back to your website so although you lose 50% of the money, you get the status from a daily deals site like Groupon as they have to approve it first. It's like having a bigger website say 'these guys are good. We want to sell their product for them and give you a introductory offer...' Those guys will come back. It's free large scale marketing.

 

[integrity Rules]

Hi Dee
What I meant that there is no set up fee. For us it is a no brainer, we have a few digital downloadable courses which we sell, so there is no cost (or very very low cost) for delivering the downloads. Whatever we sell is pretty much pure profit and new clients which we can upsell in the future.

Merry Christmas.
Oz

That explains why Groupon works for you.
For a service business ( one-to-one ) its likely to be poor deal, since conversion into upsells & repeat clients is more tricky.

 

[VirtualVIP]

Hi Crombie

What type of business do you run?

 

[Socio South West]

This thread is a few months old, but illustrates how Groupon works for some businesses and not for others

Oz uses it to gather customer contacts with the possibility of selling further courses and other products.... whereas mconridge found its benefit only as a clearing house for slow moving products.

That's why things such as spa treatments are popular, because the companies have the chance to sell memberships. Photographers are another sector who do well on Groupon - the offer includes one small print... but they have the opportunity to sell their service by way of recommendation in future as well as sell larger prints and albums not included on the Groupon offer.

In short.... if you have upsaleable or extendable products, it can be a great way of marketing: For straightforward retail it's probably only useful as a clearance method.

 

[Uzair Kharawala]

That explains why Groupon works for you.
For a service business ( one-to-one ) its likely to be poor deal, since conversion into upsells & repeat clients is more tricky.

We've also run courses at our studios on Groupon, Travel Zoo & Amazon Local and they've been profitable. Plus a % of clients also upgrade to other courses. This can really work with a service business as the client gets to know who you are, what you do, where you are, etc.

Oz

 

[TMSS]

From my experience I would agree with many of the above posts, a hotel client found that Groupon didn't leave enough margin to be worthwhile, but a specialist food supplier does very well from it, and has good repeat sales from the reorder form the include in the package. A provider of sports courses has just signed up to generate some sales in the down season as well.

 

[fisicx]

A good friend has a boat hotel type thing. They used groupon and got a load of bookings. They didn't make much money but expected lots of repeat busienss and referrals. It didn't happen for them. The people who took up the offer were never going to pay fuill price so there was no repeat business.

Groupon does work but you need to be really sure you can upsell.

Don't end up like this: http://www.businessinsider.com/london-baker-makes-102000-cupcakes-groupon-deal-2011-11

 

[integrity Rules]

Edited

A good friend has a boat hotel type thing. They used groupon and got a load of bookings. They didn't make much money but expected lots of repeat busienss and referrals. It didn't happen for them.
The people who took up the offer were never going to pay full price so there was no repeat business.
….. you need to be really sure you can upsell.

Yes, otherwise as a service business you get worse of 2 worlds
1. A Groupon (or other daily deal) client base that is impervious to upsells or even lateral sells ( i.e. sells at near the Daily deal sell point ), and

b) A branding problem ( since there is a perception that service businesses featured on Daily Deals aren't at anywhere near the top of their business class).
Result
Bad client base , and alienation of ones ideal client base= Bad business decision