Companies like Groupon and Living Social have developed large networks of customers who are actively looking for new products and services. Whether journaling is an important decision for a small business owner looking to expose themselves to a large existing customer base in their area. Offering sites are known to accept a significant portion of a daily offer and the price charged to the end customer is often already below the price that a business would normally charge for its services. This is what draws in the large number of potential customers, however if done without fully thinking about the true costs of delivering the deal and servicing the influx of customers, a business can suffer massive financial impact if customers don’t meet. they stay and shop. in the future.
A joint venture marketing relationship with other local businesses may not have the general reach that Groupon or Living Social has in a specific demographic, but the terms of revenue share are likely to be much more favorable and still present their product and service to your target demographic. A daily deal can be a great one-time marketing campaign for some businesses and therefore should be considered as a strategy for any business.
Groupon issues to watch out for:
1. Many small businesses have lost considerable amounts of money due to the deals they have made. Groupon’s sales reps aren’t there to make sure the deal is a definite success for the long-term future of their business, only that the deals are sold at the best price and revenue share for Groupon.
2. While some companies have received decent terms from Groupon, others have had a less than 50% revenue share with the deals site.
3. Many of the customers are only there for cheap prices and are not your customers, they are Groupon customers and will buy another offer from another provider the next time they need the same product or service that you provide.
4. People will travel to your location for a good price, but may never return due to the greater distance from your home.
5. It can make your brand cheaper. Customers who know you and made a purchase through Groupon or Living Social may be reluctant to pay full price in the hope that you will make another super sale in the future.
There are other issues you need to be aware of, such as brand control, customer satisfaction, annoyance from existing customers who didn’t buy the Groupon offering, and many more. Unless your business really needs a last-ditch effort to reach as many customers as possible, a different approach to customer acquisition would be best.
Find the right business partners who have your target demographic as their existing customers and create a joint venture marketing relationship that allows both companies to benefit and grow equally instead of getting a site rich in daily deals.