It’s a very serious question; especially when budgets are tight and competition is fierce.
The hard part about this question is that you are probably doing a cocktail of various marketing activities to attract these new clients. So this number varies wildly and you can never be 100% sure how much you are spending to finally get people through your door.
What if I told you that you could set a price tag that you are willing to pay for each new client and never go over? Sound appealing? That’s exactly what Groupon.com is offering up to businesses: a chance to offer new clients a reason to try your business at a price that you are willing to spend for each newbie. Not only that, they will only deliver new clients in bulk.
What the heck is Groupon?!
It’s not only the word ‘group’ and the word ‘coupon’ combined, it’s also the name of the largest collective buying website in the world. Collective buying?! Is that like splitting the tab with your friends at your local hangout? Not really… Collective buying has recently become popular for consumers as they get to partake in deep discounts in their local area and it gets them trying new and exciting things. It’s popular for businesses as they get a guaranteed number of new customers for each promotion they run.
For example, if you ran a promotion for an hair cut and style at 50% off, this would be blasted out to all the people that have signed up to receive these special offers in your area as well as being posted on the Groupon.com website and available via mobile apps. By the way, there are over 6 million people that have signed up for Groupon worldwide. Not too shabby I’d say.
Everyone that receives the offer could then sign up to buy the offer, but they don’t actually get the offer unless a specified number of people also buy the offer. Hence guaranteeing new customers in bulk.
Once the deal has reached the volume benchmark, everyone then receives a ‘groupon’ that they can print out and redeem at the business. The volume you receive from one promotion can be spread out over months as Groupon-ites redeem their Groupons over time.
The Groupon Influence
Groupon started in Chicago and has expanded its coverage to over 100 major cities. It’s also recently purchased CityDeal, which has a large network in the UK and Europe (16 countries), which won Groupon the title of largest collective buying site in the world. That’s definitely got a ring to it, eh?
The problem for most businesses itching to partake on collective buying websites is that it’s only not currently available in smaller cities. Boooo! However, there are other collective buying sites out there that may cater to your area, you just have to look. Here are a sample of some other larger websites that offer various things to consumers.
- 8coupons – searches for deals in key categories for deals in your area. There are multiple coupons available rather than just one a day.
- BuyWithMe – mainly in the Northeastern major cities, this network has a ‘Special of the Day’ approach along with other deals in the area.
- LivingSocial – not quite as large as Groupon, this site still has appeal as they encourage buyers to share the deal by giving it to them for free if three other people also buy it from the forwarded link.
- 25Tuesdays – exclusive to the spa industry, the website offers $25 specials for spa services if they are purchased on Tuesday.
- SocialBuy – this site has a network that spans the larger cities that has a few deals at a time focused on social offerings such as restaurants, spas and salons, hotels and anywhere else that people can hang out.
Other websites on the local highlights bandwagon, but maybe not collective buying, are the following:
- Thrillist – highlighting only the key cities in the US (and a new edition in London), this site focuses on young male consumers with lifestyle-based content.
- Woot – product focused daily deal site. Not exactly collective buying, they just sell a different clearance item each day until they are gone or the time runs out.
There are loads of other sites, but I’m trying to hit some of the highlights without boring you with 100’s of websites!
Who is getting their Groupon?
The average Groupon lover is an affluent consumer according to a demographics overview available on the Grouponworks business site. They are mostly young women with an education, career and money to spend.
These consumers also (obviously) love a good deal. At first I thought that this was more for commodity items, but the service is proving to have lasting power for luxury items as well. A statistic from a Groupon survey of businesses featured on the site, stated that 89% of those customers that tried a new business through Groupon was likely to return. Ok, so maybe there is some staying power to these new clients…but I still think it’s crucial to focus on converting these promotion-happy consumers to loyal clients. Especially when they are receiving large discounts on deals from your competitors straight to their inbox from Groupon.
What do you do? Focus on your competitive advantage, demonstrate why they can’t replicate your service and give them an incentive to return. Also make sure to get their contact details, sign them up for your email promotions and get them hooked into every network where you roll: Facebook, Twitter, Myspace, YouTube, etc.
The last thing you want to do is get stuck in a rut where you rely on deep discounts through collective buying sites just to sell or book anything. Bottom-line: make sure you are getting a larger share of their attention before they leave your business so you can encourage them to return and enjoy the rewards of an expanding client base!