Groupon enjoys enormous popularity in the Netherlands and, in fact, throughout the world. It is an American company that strikes deals with businesses. The idea is that a product or service from this business is sold to the customer at a discount via Groupon. Groupon has become huge with this strategy. It is becoming a global phenomenon, and its success continues to grow. In doing so, Groupon also makes extensive use of social media. People can share Groupon offers with each other via Twitter and Facebook. As a result, the group familiar with Groupon is also growing steadily.
People love discounts, so there is a lot of interest in this. New deals can be found every day. This can range from a night out to a beauty treatment to new winter tires.
How Groupon works
A customer is never certain that they will receive the desired discount voucher. There is always a minimum number of people who must respond within a certain time frame. When this is the case, those who responded receive a Groupon voucher that must be presented as proof of payment. If not enough people respond to a particular offer, the entire deal falls through and no one receives anything.
The discounts can go up to 70%, so Groupon attracts many visitors who always want to take a quick look to see if there is anything for them.
Groupon costs
So, an excellent opportunity for businesses to attract potential customers. Or is it not so smart to participate?
There are always a number of factors you need to take into account. As an SME, you must offer a minimum 50% discount on the product or service you provide. You also have to pay 50% to Groupon as commission. This makes it very difficult to earn anything from a Groupon deal.
For SMEs partnering with Groupon, it is usually not about the initial revenue the voucher generates. It is primarily about making the business known to new potential customers. The goal is to introduce people to the products or services the company provides. However, this must be weighed against the costs associated with a Groupon deal. Therefore, you might want to ask yourself a few questions before embarking on this.
To think about
You need to consider the value of the new potential customers. The people who purchased the voucher were primarily attracted by the discount coupon. Therefore, you must consider whether these people are true bargain hunters or if they will return a second time. This is often industry-dependent as well.
When you frequently run promotions, people might think that no one buys your products. It can also become annoying if people keep encountering your promotions. Not to mention that people might stop purchasing products from you because you are often listed on Groupon. People will then wait for that (especially if it involves a higher price). No less important is the target audience you appeal to with Groupon promotions. Suppose you want to appeal to a specific group of people, but they do not fit the Groupon image at all. Then ask yourself if you want the people who do purchase a Groupon voucher as potential customers. This can change your image without you intending it.
Therefore, for every business, there may be reasons to do it or not; this is different for everyone. That is why it is important to weigh the pros and cons against each other and not just start something because it generates many customers in the beginning.