Nikki Adrian - Jul 14, 2020

Using Groupon for your Business: Is it Worth it?

Most of us have heard of the money saving app, Groupon, where users get discounts on activities, goods, services, and travel. As a small business, you might have considered using this app to gain more customers and increase awareness of your brand. The big question is: is it worth it? 

First, let’s talk about how the app works for businesses. Once you agree to become a Groupon merchant on their network, Groupon will request that you reduce your product or service price by 40-60%. Then, they will send out your deal to the relevant demographic. This, in turn, exposes you to potential new customers without having to pay for any advertising. One important piece of information to take note of is that Groupon keeps half of the discounted price once the customer pays, leaving you with about 25% of the total product or service cost. 

Now, with this information, we can answer the question of is it worth it? The answer is: it depends. For small businesses, it can be a great tool for increasing brand awareness. If a user is looking for hair salons and they come across your salon on the Groupon app, there is a higher chance of that customer coming to you. From personal experience, I have found many new businesses that I had never heard of before from the app, and have had wonderful experiences with them (reviews are also super helpful on the app). 

Groupon also helps to set you up for a measured success by limiting the amount of deal exposure so that you don’t sell too many deals and lose a lot of business. Usually, Groupons are one-time offers, so if a customer finds your business through Groupon and decides that they love your business, they will come back and pay full price, and potentially turn into a loyal customer.

Let’s talk about when you should not use Groupon for your business. If you’re not looking to increase brand awareness, Groupon probably isn’t the best app to get on. Basically, if you are already well-known, have a large base of existing customers, and are mainly looking to increase revenues, Groupon is not the way to go. 

Before using Groupon as part of your marketing strategy, ask yourself: Do I need to use Groupon to increase your brand awareness? Am I ok with users not paying full price? If the answer to both of these questions is yes, then Groupon may be a great choice for your business.

The best part about Groupon is that, unlike billboards and pay-per-click campaigns, even if you don’t receive new clients, you won’t lose out on any money! You only lose out on some of the price once a customer makes a purchase. 

One thing you must remember is that you cannot rely on Groupon alone for your marketing strategy. It is a brand awareness tool, but you must still have a completed customer value journey in order to cultivate your first-time users into loyal customers. If you don’t ‘wow’ your first time clients when they first come to you, they might not want to come back. Even though these customers aren’t paying full price, you still have to treat them with just as much care as any other customer. With reviews also being huge contributors to whether or not someone tries out your business, you have to watch out for poor reviews that could prevent others from taking a chance on your business.

So, take care of all your clients, focus on the excitement stage, and get them to come back to you time and time again. Once you reach the level of awareness that you want, you can even choose to stop using Groupon! If Groupon seems like a good fit for your business, and you’re looking to increase brand awareness, why not give it a try?

Written by Nikki Adrian