Why Using Groupon Will Kill Your Business Slowly

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Groupon was introduced in Nov 2008 by Andrew Mason, now making the company worth about $25 billion when it’s IPO (rumor). It’s a great company that made it to success in less than 3 years.

What is Groupon’s business?

Groupon has websites in different countries that has the deal of the day for local business services and products. It can go as high as 90% discount if you purchase coupon from them. Here is the video link to explain in 2 minutes, click here to view video.

The dark secret why local business cannot use Groupon long term

As customers can use low prices to purchase coupons like dining coupon which can have discount as high as 90%. To most local businesses, most would not be able to give 90% discount and furthermore give some percentage from the remaining 10%, making the local business owners not even making breakeven most of the time.

The question now is that will you be able to sustain long term if you are giving 90% discount for your services or products? I don’t think so. But there are few solutions if you choose to use Groupon;

1) Calculate how much discount you are able to give, and still be in breakeven point. In business terms, you do not make any money upfront,  you have to be market your up-sell soooo irresistible that the customers will come back for more. This can be done if it’s like once or even twice a week promotion.

The trick is to get the details of the customers who used the coupon, and make them come back for more without using Groupon in the future. This way, your business will make money long term.

2) Having your website rank for the keywords your targeted customers are searching online. This is the number 1 reason why most business cannot continue for the first 5 years. They did not tap into the power of search engine marketing.

In their mind (especially in Singapore), they are using the website to showcase their products or services in image form. So the few ways that the local business will get traffic are though business cards and word of mouth. Never in their mind think that their website can be rank in the first page of major search engines like Google, Yahoo and Bing.

Is that all the solutions to get more customers?

There are of course other ways to get more customers, like newspaper advertising, outdoor ads, etc…. But these cause a lot of money in marketing. This is where Internet is the best leverage for most business.

LeadGenExperts is able to help you in using the best leverage (Internet) to generate targeted business leads for your business. Use the contact form here for free Search Marketing consultation here.

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