5 Ways To Profit From The Group Coupon Game

From John Jantsch, Duct Tape Marketing:

Group-buying deal services such as Groupon and Living Social are white-hot and for good reason: they send buyers to your doorstep like no other vehicle currently.

 

But, some would argue at what cost. These group-buying services often send buyers that are simply looking for deals and require the business owner to effectively discount their products and services up to 80 percent in some instances. (Want to know more about Groupon? Listen to this interview with CEO Andrew Mason.)

 

If you think about it though, most advertising and lead generation activities come with some cost associated. Few small businesses pay close enough attention to their customer acquisition costs, but it’s one of the greatest metrics going.

 

If you can determine how much it costs to acquire a customer and how much profit you can make in a “lifetime” of serving that customer, then you can determine how much you can afford to sink into acquiring more.

 

Since group-buying services can drive such a flood of leads at a known cost, the real way to make the deal game pay is to spend sufficient time developing programs to generate additional profitable business from as many of those deal shoppers as possible.

 

Want to read more on group-buying? Check these out:

• How To Avoid Getting Burned By Daily Discount Sites
• Should You Run A Groupon Promotion?
• Getting Customer: The Power Of Groupon

 

There’s no question some percentage won’t be back; heck, I’ve purchased Groupons from neighborhood joints that I was going to anyway. But the key is to convert trial users into repeat and refer business.

 

1.   Check your attitude. I can’t tell you how many businesses make Groupon users feel unwelcome. Think about it, you paid to get me to try your place and then you immediately make it a bad experience. If you’re going to invest in a coupon, go over the top to make me feel special–find out if it’s my first time in and maybe even give me a surprise. You won’t start to make money off me unless I come back and bring friends.

 

2.   Capture data. Only one place I’ve used a Groupon has made any effort to learn who I am. Give coupon buyers a reason to join your community. Offer them recipes for the meal they just ate, create a newsletter on trends related to your store and ask for feedback on their experience. Maybe even show them how they can review your business on Yelp or sign up for your very cool referral program.

 

3.   Tailor additional “coupon-like” promotions. These folks respond to what feels like a deal. Think in terms of creating special lunch menus, previews and guest talks, and then send them routine announcements via e-mail to get them back. (This is also a great way to stay in touch with all of your customers.)

 

4.   Prepare a valuable upsell. When your coupon deal seeker comes to your place, honor their coupon with a smile and then tell them about an even better deal you have just for them. 

 

5.   Create membership. Many businesses have embraced the frequent buyer club approach and this goes very nicely with the new trial coupon buyer. Make certain that you have a way to expose them to a habitual way of buying more and referring business.

Source: http://www.openforum.com/idea-hub/topics/marketing/article/5-ways-to-profit-from-the-group-coupon-game-john-jantsch

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