Small Businesses Hate Groupon

Small businesses hate GrouponA story came out on Huffington Post today that I found interesting. According to the article, 70% of small-business owners hate Groupon. This is according to a survey by iContact. Although the article didn’t go into depth about the reasons that small-business owners hate Groupon, I can tell you a couple of reasons why they might. First, Groupon is complete price based. People see a low price on a product or service and they buy it for less than half or more of what it is worth. In essence, your business is being bought and sold as a commodity.  One hair cut, one plate of food, one “Item A” at a time without any differentiation other than how low you can make your price. If you work it wrong, this tactic can cost you a lot.

Advertising on Groupon gets customers in the doors, but what happens to the customers after they get there? Businesses who use Groupon think they are driving awareness, but what they are really doing is driving cattle.  Now, a GOOD cattle driver, perhaps one who has been to my 3 Days to Cash Workshop, will take advantage of the situation. They won’t let the cows wander into the barn and let them go to sleep.  They will make sure they get some MILK! They will capture email addresses and phone numbers. They will upsell them the moment they arrive. They will push them into a sales funnel and do everything within their power to make sure there is more profit to be made.  Do most small businesses do it? NO! They look at the Groupon numbers, smile when they see how many “units” have been sold and proceed to fulfill orders for their newly commoditized business without a second thought about how to retain those customers. Groupon doesn’t sell a business beyond a one-time discount.  That business must PROVE they are more than that.  Is it Groupon’s job to retain those customers? No. They have done their job by driving the cattle.  It’s up to THE BUSINESS to milk it. 

If you put yourself on sale, you NEED to be prepared to KEEP selling! Marketing is not a light switch. You don’t just turn it on and BOOM you have business. It takes work. You might outsource that work to someone on your team, but the work must take place.   Dig deeper. Do Less, Make More and become a team made millionaire. Get the nuts and bolts business advice, accountability and support you need with Fast Cash Coaching.  So, if you DO decide to do a Groupon, you will know what to do with those customers once you have them.

About Loral Langemeier

A 5 time bestselling author, Langemeier started her first business at 17, and by age 34, had established a multimillion dollar portfolio. As one of the most notable national and international entrepreneurs, Langemeier has built a number of businesses in a variety of industries, including projects in real-estate, green-recycled glass, and online marketing firms – several of which have grossed millions.

Comments and Reactions...

  1. This is great advice on how to take advantage of social media lead generators! If you’re using on-line coupons to promote your business, ask the marketing company if they will share contact information on who buys a coupon. Some companies will and some won’t. It becomes an issue when a customer buys a coupon that they never redeem. If the marketing company will not share contact information up front, you never get to put that contact into your funnel.

  2. This post has me thinking in an entirely different direction around a blog I’ve worked on for over a year.

  3. Itscupcakeheaven said this:

    Its true. I dont expect very much if any repeat business. I am basically paying people to take my product out the door that I work so hard on. The more I research it, the more I find out that alot of people just jump from Groupon to Groupon. I have spent so much time filling groupon orders, I cant build my business and now have no partner because there is no money coming in…

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  1. [...] Foley (6/12/11)Groupon’s Business Model Doomed To Fail Seeking Alpha, Mazen Abdallah (5/12/11)Small Businesses Hate Groupon LiveOutLoud, Loral [...]

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