I’ve discussed using Groupon as a marketing channel in previous posts…
“Marketing And The Holy Groupon”
“When ‘Success’ Might Put You Out Of Business”
“Before Running A Groupon Promotion, Read This…”
However, as it seems that running a Groupon (or other “daily deal”) promotion is the latest “hot” trend in marketing…
…I feel obliged to point out the pitfalls and provide some pointers to getting worthwhile results through this particular marketing channel.
Who better than the great Drayton Bird to weigh in on the topic…
“What goes around comes around. Why GroupOn is the kiss of death – or something damn close”
Summary…
“I strongly believe that Groupon in particular is for the most part only good for Groupon.”
…but read the whole thing for some great insights on discounting in general.
Drayton refers to a great case study posted by Ryan Healy…
“Better Approach Than Groupon? A Denver Restaurant Case Study.”
…for an alternative way to attract new business.
Dan Kennedy has been consistently sceptical about the whole Groupon phenomenon. In the January 2012 issue of the “No B.S. Marketing Letter” his take on the subject…
“Be very careful about using ‘daily deal’ mass discounting to acquire new customers – consider how it can downgrade your present clientele, damage brand, and attract a herd only interested in ‘deals’. Personally, I’d rather give away a meal or hair style or whatever entirely free to precision-targeted ideal customers than give it at half-price to the great unwashed masses with no opportunity to discriminate. Easiest/cheapest marketing is rarely the most profitable marketing.”
I confess, I HATE discounting (except when I’m buying of course! ;-))…
…although I realise that it has it’s place.
One of the most interesting perspectives I come across on this marketing topic comes from Jason Marrs…
…co-author with Dan Kennedy of “No B.S. Price Strategy” (also on my current reading list).
His thoughts on discounts…
“They can be very effective. But they’re also very, very dangerous…they’re an advanced strategy that are typically used by people who have absolutely no idea what they’re doing.”
Dwell on that a little if you’re ever tempted to offer a big discount without having a very good reason.
Back to Groupon…
If you want to test out this channel, couple of suggestions…
1) Make sure you know what the lifetime value of a customer is for your business
2) Have a clear strategy to convert the Groupon leads into long-term clients
3) Make every effort to avoid alienating your existing clients and damaging your brand (or “business image” if you prefer).
Key point…ensure the marketing tactics you use fit into and advance your business strategy.
Of course, the big problem for all too many businesses is that they don’t have a clear and coherent strategy…
…and end up in reaction mode seduced by the latest fad and marketing “shiny object” that promises an easy fix to the latest crisis.