To Groupon, or not to Groupon…that might be the Question!
Topic: Company Profiles,Growing Your Business,How-to,Marketing,Small Business Marketing,Small Business Tech Recs | Comments Off
Own a business? Then you’ve probably considered one of the myriad “daily deal” services to market your goods or services and gain new customers. While coupon-based advertising can be fruitful, it could end up costing you more than you think.
From Groupon to LivingSocial to Bloomspot and beyond, most of these companies boast email lists of over ten million people. For a business owner, that means access to millions of people you would otherwise never be able to reach. Sounds great, right? What’s not explicitly spelled out is that companies like Groupon take 50% of your revenue as a fee for using their service. And given that most Groupon campaigns offer the end customer around 50% off, you end up with just 25% of the original revenue.
For example, if your product retails for $50, and you give a discount of 50% to your customers, after Groupon’s 50% cut, you end up making $12.50 for something that normally costs $50. Without a significant markup on your goods or services, you may end up with more customers, but an overall loss in revenue.
SocialMediaToday outlines some additional risks and rewards related to daily deal marketing strategies.
In the end, it may be wiser to focus on long-term strategies for customer engagement, and not high-risk, immediate-reward approaches like daily deals. In the meantime, WorkingPoint provides you with the same deal, every day: high-quality, time-saving tools that your business can depend on.
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