Offer at least one deal a day to customers in several cities across America, sell enough individual deals so the revenue can be split 50/50 between the Internet coupon company and its clients, and in turn give the consumer an unbeatable bargain.
That was the original idea behind Andrew Mason's then fledgling company, Groupon, now an industry leader in the social coupon business. To be sure, Groupon has changed the way consumers buy products and services, but from the merchant's perspective it has been a mixed bag.
Here in our local area, the Eastchester-based Westchester Martial Arts Academy has been using Groupon since March 2011 to promote its iLoveKickboxingEastchester.com initiative. Owners Chuck and Kara Giangreco say it has been a great opportunity for them to obtain new customers who may not have known about their business before and to also establish long-lasting relationships with some of them.
However, before jumping into a business relationship with Groupon, the Giangrecos say merchants need to understand the psychology behind the purchasing decisions of consumers. A large percentage of Groupon customers, they say, tend to be deal seekers and are therefore not serious consumers.
"They are more excited about getting a deal but with no intent of purchasing beyond that," notes Kara Giangreco. A smaller percentage of Groupon customers purchase the deals and are genuinely interested in making use of them, she adds.
A relatively new deal-a-day site called Qponista is gaining traction in our local area. The "we-commerce" engine, established by CEO Sandro Ore of Tarrytown, provides daily deals that allow bloggers and media companies (otherwise known as "dealmakers") to work with merchants all across the country.
Ore explains that Qponista creates an “open loop” system where dealmakers can create and market their own deals to friends, fans, followers, readers and subscribers. Qponista is currently offering its deals to Examiner Media readers through Examideals, which include offers from local businesses that are then posted on the media company’s various platforms.
If you decide to partner with Groupon or a similar website, think about promoting the benefits of your products/services to the customer rather than just honing in on the low price. There's a greater possibility of getting repeat business as a result. Remember, also, that such deals sometimes have the potential to lessen the perceived value of the goods being sold, so be careful how you describe your deal.
Be sure you know what you’re getting into, from a financial standpoint. If you already operate under a thin profit margin, can you really sell your goods at a loss? Above all, comparison shop before you take the plunge into the social coupon world.