I’m interested in getting involved with Groupon but concerned about the impact on the growth of our online business. Is it largely a short-term gain?
The group-buying website Groupon, which offers discounts on anything from shopping vouchers to teeth whitening, has become a phenomenon among online bargain-hunters.
Martin Blinder, head of creative at digital agency Essence, says retailers should think of Groupon as a marketing agent. “They connect you with more customers by negotiating significant discounts on your products or services in exchange for a greater volume of sales.” But, he adds, Groupon’s job ends there. “As the retailer you are responsible for ensuring that you can handle the increased business they attract so be very mindful of the negative impact this can have if you are unable to fulfil your commitment.”
If planned well, Blinder says Groupon can drive direct sales to your business on a regular basis. “While you will need to sacrifice margin, you are benefiting from a form of marketing that is acquisition-led, meaning you’ve got the customer, you just need to know what to do with them after.”
Groupon will be negotiating similar deals with your competitors so the question is whether you can afford not to take part. “Analyse what a relationship with Groupon could mean for your business and figure out a strategy that can get the most out of this for you,” Blinder advises. Then test it on one product.
It’s important to have a longer-term vision for marketing to your new customers. As Blinder says: “The true value you’re seeking will come from retention.”
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