Grow Your Customer Base With Groupon

Posted on | January 14, 2010 | No Comments

If you’re a small business owner who likes the idea of no-cost, zero-risk advertising programs then you’ll definitely want to check out the Groupon.com program.

And as you’ll soon see, it can be a very powerful long-term profit-center for a small business owner. Let me explain…

Groupon is a full-service online coupon discount service. They have over 2 million subscribers (and growing) in metro areas waiting to see special offers from local merchants each day. If your small business is in one of the metro areas they cover (you can check and see at grouponworks.com), and you have products or services they would like to promote, they’ll set up a campaign for you at zero cost.

They’ll work with you on a promotion, write all the copy, and promote your special offer to local customers via email. All the email recipients are opt-in and want to receive these special offers every day. And from what I’ve seen they’re very responsive.

So, for example, let’s say you own a restaurant in Dallas and they agree to send out a special offer to 75,000 potential customers in your area. The coupon is for $75 worth of food for $37. They fire off a professionally designed offer announcing the Groupon, collect the cash from the buyers, take a cut, and send you a check. They distribute the coupons via email to the buyers who redeem them at your place of business. It’s a totally hands-off operation for the business owner.

What I like about the program is the fact you can build your customer base without any marketing expense except for the cost of goods. Even if you break even on the offer, you have new customers you can easily convert into more profits.

So if I were to use this program, I would set up a special back-end marketing program for anyone who brings in a “groupon”. First, I would find out up front if they have a groupon and make sure they get special treatment. Then I would offer them more special deals to get them to come back. I would ask them if they wanted to be notified by email of any specials and put them on an email list (you should be doing this anyway).

In other words, turn them into lifetime customers. This can turn into a serious cash cow for any business owner who puts a little thought into it. For instance, on their website they show one restaurant owner who sold 2,873 groupons. If you take each of these customers and turn them into an average spend of $300 annually you’re looking at gross receipts of $860,000!

Since Groupon is risk free, I’d say it’s a sweet deal. You should check out the availability in your area. They currently service 29 major metro areas with 19 more opening soon.

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