How Groupons can Energize your Business

Tip of the Week- How Groupons can Energize your Business (online and offline)

I figure that if I encounter something twice in two days then it's probably a trend, or about to be one.

Sunday I walked to The Huntington Library in San Marino (near Pasadena in Southern California) and there was a table set-up in front for "Groupons".

When I asked about this I was informed that if I signed up before midnight that night I could receive an annual membership to The Huntington for $60, instead of the usual cost of $120. Hey I'm no math major but that's almost 50% off! (actually I was a math major and it's exactly 1/2 the cost).

That's a great deal, no matter how you slice it. The bad part is that this was a deal-of-the-day and it expired last Sunday night (sorry!).

Then I was listening to Bob Knorpp's The Beancast podcast for 8/8/2010 on my walk yesterday and they were also talking about Groupons. Bingo! - maybe a trend is emerging.

The Beancast said: "Anything that moves traffic in retail these days is a good thing. And group coupon services like Groupon have been the darling of the Internet."

So what's a "Groupon" and how does it work? Basically Groupons are group discounts. Groupon calls this "collective buying power".

A Groupon is group coupon which only works if a minimum number of people "buy" the deal that day by midnight. If not enough people sign-up it's canceled. If enough people do sign-up then you print your Groupon and use it like cash for the particular deal it applies to. You can see more about how this works in Groupon's FAQ.

Once you're aware of Groupons you'll probably notice them on web pages all over the internet.

And this is great, but The Beancast pointed out a few of things you should keep in mind in you're considering using Groupons for your business:

It's great that there's a minimum, so your business is assured of at least a certain number of people partaking of a particular offer. But on the other hand, what if the whole world showed up? Would you or your staff be able to handle the increased amount of traffic?
One person on the podcast said it's possible that a business might have to turn into a virtual call center the day of the deal. So again, would your business be staffed for this?
Would your business be able to provide the number of items or services promised in the deal? If not, then this might result in bad customer service ratings or relations for your business.
Is the Groupon-type business model sustainable? In other words, just because you increased your internet and real business traffic for one day, or one deal, would this translate into increased customers or purchases long-term?

These are all great questions and you should check out The Beancast podcast for the full discussion. But in a nutshell, you should be aware of the possible pluses and minuses of Groupons before your business tries them.

Have you used Groupons as a consumer or a business? Did you have good or bad experiences? If so, let us know...

And since we were talking about libraries at the top of this tip, you may also be interested in our recent tip on "Why Links to eBooks can help your Online Marketing" and how to find no-fee eBooks you can read on your iPad, Kindle, iPhone, Blackberry, Smart phone, etc.

Also don't forget to check out our tip on taking your business local on the internet: "How to Have your Business be Found and Taken Mobile with Google Places."

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IOP Tweets of the Week

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Upcoming Events

Karl will be speaking on:

August 12, 2010: "The Importance Of Ethics In Social Media In Marketing & Advertising" - UCLA Extension (guest lecture on campus)

August 14, 2010: "The Power of Social Media" - The Institute of Management Accountants (IMA) South Bay Chapter

September 16, 2010: Moderating a panel on "Career choices and trends in business" for the Business, Management, and Legal Programs at UCLA Extension's Fall Downtown Open House.

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