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Groupon and LivingSocial – A Small Business Friend or Foe? Part I: The Benefits

This is the first post in a three-part series discussing the positive and negative aspects of online deal services such as Groupon and LivingSocial.

Online discount services such as Groupon and LivingSocial have taken customers by storm. I mean, who wouldn’t want to pay $20 for a product or service that is normally $40 or more? With this large consumer demand, businesses have begun to take part in this coupon service. I bet you have used one of these online coupons in your personal life, and ultimately began to wonder how this online deal service would potentially benefit your small business. This is why we’ve put together this little blog-series documenting the advantages and disadvantages of Groupon and LivingSocial for businesses and consumers alike. Our goal is to provide small business owners and consumers with the information needed to make an informed decision about these online discount services. You’ll be able to weigh both the positive and negative aspects of Groupon and LivingSocial and ultimately make the best decision for your business.

Benefits provided by Groupon and LivingSocial for Small Businesses.

First we’ll dive into the advantages that Groupon and LivingSocial provide to small businesses. When properly planned out and executed, online discount promotions can provide local businesses with a variety of benefits.

Attract new customers.

In small business, it is important to gain new customers and retain the returning customers. If you are in the process of trying to capture the attention of new customers, a promotion through Groupon or LivingSocial could be just the way to do so. Customers are always looking to try out new businesses, products, and services, so what better way to entice them to your business than with a discount promotion? One word of advice – Groupon and LivingSocial deals run for a specified amount of timing, meaning you could have a large amount of new customers in a short period of time. Always take this factor into account when planning a discount promotion. Be sure that you have enough product in stock, employees on hand, and resources available to serve the needs of the promotion and the influx of customers flocking to your store.

Opportunity to build new customer relationships.

Now that all of these customers have brought their business to your store, this is the perfect opportunity to turn them into repeat customers and create lasting customer relationships. One criticism of Groupon and LivingSocial is that the services only draw ‘one time’ customers who are looking for a deal and nothing else. This is true, but it is ultimately up to the business to take the first step and initiate the customer-small business relationship. When these customers come to your store with a Groupon or LivingSocial deal, use this golden opportunity to demonstrate your superior services, top quality products, and unparalleled customer service and satisfaction rating. Online discount promotions are a great tool for fielding customers to your establishment, but it is your job to keep them coming back.

Effective advertising.

As all business owners know, the best marketing strategy or campaign employs a selection of various marketing tactics and channels strategically designed to reach your intended target customers. When effectively combined with other marketing efforts, online coupons can be a valuable form of advertising. Groupon and LivingSocial display your logo, brand name, website, and more, allowing potential customers to learn more about your business before purchasing your discount promotion. Regardless of whether a customer purchases your online discount or not, the online service will have been another ‘touch point’ in your marketing campaign that effectively reached your intended audience. Typically, these promotions will generate a coupon purchase, an increase in website visits, and an overall improvement in in-store traffic and purchases.

Helps businesses move inventory.

When your business needs to move a certain amount of inventory, discount promotions through Groupon or LivingSocial can effectively help get move additional inventory. In this case, remember to effectively plan out the promotion, from employee schedule to ensuring that you’ll have enough capital to recover from the sale. In addition, if your business experiences a slow season, a discount promotion distributed through Groupon or LivingSocial can boost your customer traffic during these slow points. For instance, if you are a local grocery store and see a dip frozen food sales because of the season, an online discount promotion service can help you boost your sales during this sluggish time.

Now, online discount services do provide small businesses with many benefits, they also have several downfalls as well. Be sure to properly evaluate whether or not these services are ideal for the current state of your business.

Click here to learn about the negative aspects of Groupon and LivingSocial in the next blog post.

Are you trying to figure out the best plan of action for your Middle Tennessee company’s marketing efforts? The marketing professionals at Titan Web Marketing Solutions are here to help. Whether you are looking for a branding solution or a website redesign, call us at 615.890.3600.



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