The pros and cons of Groupon
Have you used daily deal sites to promote your businesses? Sites like Groupon and LivingSocial have become very popular with tour operators and restaurants over the past few years. And it’s no surprise why—they are certainly capable of bringing you customers.
But are daily deal sites worth all the hype? And, more importantly, can you actually make money off of them? The evidence suggests otherwise.
Some businesses chafe against Groupon’s policy of taking half of all profits, saying that the promotions actually cost businesses more than they bring in. Others have complained that the daily deal sites don’t deliver repeat costumers, just people looking for a one-time deal. Still others complain that LivingSocial doesn’t enforce its own policies, so that one person can buy up multiple coupons, meaning you’re bringing in fewer new customers than you actually contracted for.
Whatever your experience with daily deal sites, it’s worth running your own promotions once in awhile. Not only do you maintain control over the terms and the profits but also you reinforce your existing customer base.
The logistics of running your own promotion
How exactly do you run your own Groupon-style promotion? Start by building up a newsletter list and social media following. Unless you’re a big brand, the deal probably won’t elicit much interest from people halfway across the world. So it’s good to focus on social media platforms that are based on local, real world networks, like Facebook.
Once you have a solid following, come up with an irresistible deal that you’re going to offer to a limited number of customers. For example, you might offer the first 100 people that respond 75% off kayak rentals, plus a free dinner at the Mexican restaurant next door.
Then create a special webpage just for the offer. Give all the details, including the limited nature of the offer, how to pay and the date the special offer expires. You want people to realize the offer is legitimate and exclusive. Make the webpage visually appealing. And have a button people can click on to pay for the deal. You can use PayPal or whatever virtual merchant you prefer. And by all means, use effective web copy to make your offer more enticing.
Once you have a webpage up, start promoting the deal. Send an email to your newsletter list. Tell your Facebook followers about it. Announce it on Twitter. Make sure to include a link to the special webpage in everything you do. Repeat it all again the next day and the next.
Let social media work its magic
The great thing about social media is that people can easily spread the news of the offer. If someone is excited about the deal, she can retweet it on Twitter or reshare it on Facebook, and all of her followers will see the offer.
So not only will you be reaching your existing customer base, you’ll be reaching their social networks. That means hundreds or even thousands of people will hear about your deal—for free! (Like Groupon, you can also require a certain number of sign-ups before the deal is effective. That way, people have further incentive to share the deal with their friends.)
At the end of the promotion, you’ll have generated new interest in your business and renewed relationships with your existing customers. Plus, you’ll get to keep 100% of the profits when people come in for the deal. It’s an all around “win.”
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