It's not a new idea, it's better. It's an idea whose time has come.
Groupon is the virtual "gathering together" of thousands of individuals who take advantage of their collective buying power to get great discounts. It's been done before, but not as much or as well.
I've experienced Groupon as both a consumer and in business, so I'd like to share how well it works.
My friend Steve owns a car wash in Atlanta. Groupon helped him come up with an offer - $44 in cleaning services for only $13. And they offered the deal to people who lived within a 25-mile area around his place.
Steve was amazed. He couldn't afford to buy advertising or use direct mail that would have that kind of impact - and Groupon didn't cost him anything upfront.
They even paid him in advance - before a single coupon was redeemed. (Typically, Groupon keeps 50% and pays you the other 50%, although there are some small additional fees.)
Did it work? Over 4,000 people purchased within just five days. Customers told him, "I live two blocks away - and I never even knew you were here before!"
Now Steve wasn't making any money on any of these sales, of course. The goal was to attract new customers, who would return to the car wash again and again, presumably paying full price.
To do that, I recommended he develop a special follow-up coupon - to give to any driver who came in using their Groupon. This would entitle them to save money the next time they came in. It wouldn't be as deep a discount, but it would encourage these one-time buyers (who had a proven interest in coupons) to return.
Steve's Groupon coupon was good for one year, and in five months, he's had about 1800 people come in and redeem. He expects more because Groupon also sends out a reminder e-mail to everyone who purchases a deal 30 days before it will expire. So there's less slippage than with other coupons.
If you haven't tried Groupon in your business - it may be worth considering. I've also used Groupon - to get $30 worth of food in a local restaurant for only $15. It was easy to redeem, and the food was great.
