Groupon is a hot commodity. There are businesses lined up to promote products and services using the group discounter and Google was supposedly backing up a fleet of Brinks trucks to Groupon’s offices in attempt to buy the site.
Groupon’s benefits are many: It has a great system in place for promoting deals offered through its many local sites, the transactional systems to handle the influx of deal buyers, and such deals can drive hundreds of new customers to a business. But, what if you don’t have the margins to pay 50% of the deal’s revenue to Groupon on top of offering a steep discount on your products and services?
Save your money and offer your own Groupon-style deal with the help of your existing customers. Who knows best who the next best customer (prospect) is for your business? It’s your current customers. Offer them an incentive–such as a great discount–to refer their family, friends, and colleagues to your business and you’ll save the money you would have had to pay Groupon.
If you have an email list of customers, it’s easy to build your own deal. (And if you don’t have a list, why not? Start collecting email addresses from customers that want to hear from you!) Create an email campaign that’s a coupon for, say, 30% off a purchase and tell your customers to forward the email to a friend, share it on Facebook, and tweet it. Now, if you get a high number of tweets and shares, you could reward your customers by mailing them a second coupon for an additional percentage off. You can’t advertise the additional incentive in the original email, but you can provide a thank you to your loyal customers after the fact.
[3/7/11 update: The original version of this post constructed the deal in way that would have violated the CAN-SPAM Act, something we’d never intentionally advise our readers to do. We’ve updated the language to fix the error.]
How do you track social sharing? Hopefully your email service provider offers the functionality to both share your email through social media and track how many times it is shared. A few of the major email service providers, including my employer, Constant Contact, offer such tracking features.
Even if the target number of shares isn’t reached, you’re rewarding your existing customers and enticing them to come in to spend money with you while reaching out to new prospects with a nice offer. Better, you’re not shelling out additional dollars to a third party for facilitating the deal.
One important thing to remember whether you’re offering the deal yourself or going through a service such as Groupon: You have to be able to turn those new customers into repeat customers for the deal to really pay off. This is especially true for a site like Groupon where your income for each redeemed deal will likely be less than your costs. (For example, a colleague of mine bought a Groupon for a massage and found out the masseuse was only making $17 on each redeemed massage. Normally, such a massage would go for around $70.) You must get these new people on your permission-based email list, market to them regularly to stay top of mind, and get them to return for future purchases. Only then is such a deal successful.