6 Reasons I Won’t Use Groupon to Market My Business

by Extreme John on October 19, 2010

Groupon

Groupon is a group buying website that allows users to take advantage of heavily discounted services and motivates those users to share the specials they take advantage of using social media. Groupon Works has just about all of the information needed for business owners, if you’re a small business owner and you would like to market using Groupon you can submit a business to Groupon here as well.

As many of you that subscribe to my rss feed already know, I am the founder of Extreme Tan and Smoothies, a chain of six indoor tanning salons located in the Tampa Bay area. Chances are you also know just how addicted to social media and social networking I’ve become over the last two years, especially if you connect with me on Twitter @extremejohn or via my Facebook fan page.

My addiction to social media and the thought of marketing to a group of social networking fiends caused me to rush over to the Groupon page to see what all the excitement was about. It didn’t take me long before I was looking for the section for business owners, I quickly found the business submission area and submitted Extreme Tan and Smoothies to be featured on Groupon.

As I waited to hear back from Groupon in regards to my submission I looked around for other group marketing services. After looking around I came to the conclusion that marketing my business on Groupon probably wouldn’t be best for me and my business. Here’s a list of reasons I don’t see myself using Groupon to market Extreme Tan and Smoothies any time soon.

Groupon

6 Reasons I Won’t Use Groupon for My Business

1. I Hate Inconvenience

In today’s online social media age the last thing I want to do when I’m looking for marketing options online is write an email or fill out a form. Especially when it comes to finding out prices, information or trying to wait for approval on something.

2. I Have No Patience

It took almost a week to receive a response from a Groupon representative in regards to my submission. How long would it take if I had an issue and needed it resolved?

3. Groupon is Too Big for Me

Groupon as incredible of an idea and tool as it can be for small business owners it’s sadly not meant for all business owners. Groupon bases their marketing partnerships with small business on the popularity of that business’s feedback from online sources and press clipings. This sounds great but clearly bumps most small business out of the mix as most small business don’t have an over abundance of press clippings or reviews online.

Example: The small business we own and operate has serviced over 750,000 tanners and over 6,000 spray tanning clients in the Tampa Bay area. Even though each location has positive reviews online, the business is long standing and an industry leader in the #Tampa area, Groupon won’t accept Extreme Tan and Smoothies as a marketing partner.

Groupon Feature Request

4. I Like Options

There are already companies like Groupon popping up, I’m sure it won’t be long before Groupon feels a little competition crunch. With as busy as Groupon is I guess that’s a tremendous benefit to the small business customers looking to market on a massive social level.

5. I’m Cheap

Groupon looks for 50% of each sale made. There are other’s like Living Social that only grab 40%. Some will scream that the exposure levels are different, that’s fine maybe you’re right. I like profit margins, they help me stay in business and satisfy my customers.

6. I Like Control

I don’t care for the 6 month redemption terms that come along with doing a Groupon offer. Being in the tanning salon business my seasons are very short, I need to turn a profit in those seasonal months.

Having a 6 month redemption swing cuts into my seasonal months when I don’t need to offer specials that are as aggressive as my out of season specials. Other social coupon and group coupon services offer shorter 4 month terms that make it easier to market around my tanning seasons.

The Wrap

Now before I get out of here I do think it’s important to point out that every business is different and requires it’s own unique marketing. Groupon is a massive group marketing option for business owners, obviously not for EVERY business or business owner but certainly an option for some. I would expect that just about everyone here understands the importance of assessing a marketing plan completely BEFORE making a final decision.

In short don’t base your decision on using Groupon for your small business on my views, instead do your homework and see if Groupon is right for you and your business.

Leave a comment if you have personal experience with Groupon as a business owner or customer, I’m sure everyone would appreciate you sharing your experience.

Groupon Articles You Might Find Interesting

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{ 26 comments… read them below or add one }

Mike
Twitter:

Groupon’s loss, Living Social’s gain. I just signed up to Living Social after reading this article.
Mike recently posted…The Coffee Corner Time-OutMy Profile

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Extreme John
Twitter:

Let me know what you think of Living Social, feedback is always appreciated. I will be posting a review of my experience with Living Social once it’s complete, I’ve already moved forward and met with a rep from Living Social to market my business with them very soon.

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Phil
Twitter:

Over a week to respond, heh I don’t like to wait long for replys either. Control is another big factor. Nice post John, never heard of these guys before but now I have and are aware of what they are like. Thanks for the post!

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Extreme John
Twitter:

Most of the people I speak to seem to have the same overall opinion, they hate the wait.

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John Paul
Twitter:

2-5-6.. Its like we are Twins man lol

I never looked at Groupon yet, but I can say that I would not like it for all the reasons you mentioned, especially 2-5-6

Funny how sometimes we jump on shit. since it’s new and buzzing, then look deeper and see its not worth the noise. can we say Google Buzz lol

Nice post. well worth the wait.
John Paul recently posted…Blogging Tools That Successful Bloggers Use DailyMy Profile

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Extreme John
Twitter:

Thanks John and thanks for motivating me to release it after I was done writing it vs sometime in a few weeks when I have an opening on my blog.

Ahhh Google Buzzzzzzz.

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Jennifer
Twitter:

I joined Groupon about a month ago after a friend brought to my attention what she felt was a great deal on a massage at a spa in St. Pete. After really shopping around I found that it really wasn’t a great deal and I could actually find better. I still get e-mails everyday from the site.

I also noticed recently at a greek restaurant near my house that they will not allow you to use all your Groupon coupons at once. I am wondering how many people are actually benefiting from this site? Especially if businesses are limiting what they will accept.

Bottomline it’s just not for me and I can understand exactly why it’s not for a business owner such as yourself. It’s Groupons loss for sure.

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Extreme John
Twitter:

Hey Jenn thanks for taking the time to share your personal experience as a Groupon user. After looking around the web I it’s safe to say that the greek restaurant you saw that sign at isn’t the only one.

Of course as with anything else I’m sure there are people out there that swear by it.

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lesa
Twitter:

Actually glad I saw this. I was thinking of using Groupon after one of my vendors said it has done wonders for another business similar to mine. I have been trying to figure out the best way to market my website. Back to the drawing board I guess.
lesa recently posted…Tuesday Treats for October 19- 2010My Profile

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Extreme John
Twitter:

Well Lesa if another business similar to yours had excellent results with Groupon it might be worth considering it for your business ass well.

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Donnie
Twitter:

I’ve never been a fan of coupon clipping services or any sort of “marketing systems”. Is that what this is, a coupon service? There are probably better ways to get customers in your doors.

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Extreme John
Twitter:

Hi Donnie, thank you for commenting. Groupon is a simplified version of coupon cutting. In short the “best deals” in the area are emailed to you daily. The prices are heavily discounted as long as group buying minimums are met.

Customer saves, business gets a mass crowd of people in the door. Assuming the offer is good.

Reply

frank

:oops: i always that Groupon is the profit, so, when they lose groupon,that means that they has no profit,so,you can not get good service, of course, you need more patience.

Reply

Extreme John
Twitter:

You wouldn’t want to lose a Groupon, it certainly wouldn’t do you any good or the business any good.

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Gail Gardner
Twitter:

Hi John,

Groupon is – like most sites that get launched to huge fanfare – more beneficial for big businesses than small ones. Where it is not prohibited by the TOS, local businesses can encourage their customers to write reviews for them by making it easy (provide the how-to and links) and reward them with a free session, meal or a discount.

What I believe is going to work best is for experienced bloggers to create geo-centric blogs for their geographic location as I explained in a post that I can’t pick up in CommentLuv any more about selecting blog niches that position you where the money is.

Local and small businesses need to reach a specific geographic area and those bloggers who can reach their target audience will attract local advertising dollars – and in your case benefit your own businesses.
Gail Gardner recently posted…Support Small BusinessesMy Profile

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Extreme John
Twitter:

You really should have submitted that as a guest post. AWESOME COMMENT and thank you for taking the time to read and leave it.

I know for me personally I am somewhat in the constant mix of finding out what’s new and learned early about geo and it’s importance long ago, I was actually calling things “Micro-Niche” when it came to web sites about 10 years ago.

I can only hope that other small business owners find the information they are going to need to continue to drive forward, especially if they have any shot at success. It seems to me there are an awful lot of business owners out there that get smashed from doing Groupon type marketing. Some would say, “Too bad” or “They shouldn’t have been in business in the first place”. I Say they need to find better education routes ;)

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Tia

I have been meaning to look into both of these, so this review is very helpful. Thank you!

Interestingly, the two companies are almost identical – even their colors are similar. In fact, the deal of today in Tucson for both companies was actually both $10. My guess? Most people have signed up for both (because both companies are Google Adwords addicts) and cannot tell/do not care about the difference. As they say, a deal is a deal! Perhaps a merger is in their future.

Cheers,
Tia
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Extreme John
Twitter:

Hopefully no mergers anytime soon :) I plan on seeing exactly what Living Social can deliver, I think it will be a good idea of what Groupon would have to offer without the additional % and 2 months of discount commitment.

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Doug

Groupon definitely charges too much in my opinion, especially when you are already giving the consumer a 50% (plus) discount. But, I think it is a great way to get exposure for a new or growing company, even if you are barely breaking even on your sales (as there is no upfront money on the merchants part).

What I like about Groupon is their Refer-a-Friend program which gives you $10 in Groupon Bucks for every person you refer. I have never once contacted any of my friends to promote Groupon, but I put some links on my sites and in less than 5 months have earned over $2000 in Groupon Bucks which I can use to purchase any of the deals that become available.

We have already done 2 Kayak rentals for my family of 4, eaten at over a dozen great restaurants, my wife got 6 laser hair removal treatments, we got 2 different photo books created, plus a whole bunch more cool stuff for doing nothing!!! So I LOVE GROUPON for that reason!!!

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Extreme John
Twitter:

Wow Doug good call on putting the link on your site, especially good for the businesses that your using if it’s exposing you to their business for the first time.

I can see why you would be a fan.

Reply

steel buildings design

Well Most persons have marked up for both (because both businesses are Google Adwords addicts) and will not tell/do not care about the difference. As they state, a deal is a deal! Perhaps a amalgamation is in their future.

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Dr Natura

I think Groupon is not good for most businesses. Most of the customers are people looking for one-time deals and won’t be loyal customers. So you’re basically losing money in the deal. If you’re trying to build a brand though, it’s not a bad idea, but there are better, smarter options.
Dr Natura recently posted…Medifast ExperienceMy Profile

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Rick

I usually wonder how these really work, grupons, livingsocial deals, cudo, spreets ohh many many..just wonder is it really worth buying deals from these sites.

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Extreme John
Twitter:

I know people that swear by them and others that hate every bit of the after purchase experience.

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Jerry

I was somewhat surprised by the 6 reasons and there are plenty more reasons not to like Groupon. However, the right small business with proper planning and execution can make a small fortune with groupon.

The real money in Groupon for a small business is the lifetime value of the customer. You need to be creative, but getting contact info and following up by email, direct mail or SMS (texting) is critical.
Jerry recently posted…Marketing for Small Business OwnersMy Profile

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Extreme John
Twitter:

Great tips for those small business owners that read that are interested in going with Groupon. Thanks for sharing.

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