How to Use Groupon for Your Business Part 1

So many horror stories, and yet they can all be avoided. Learning how to use Groupon for your business really means . . . what do you know about your business?
How do you make money?

The first step in using Groupon for your business is understanding where money is made in your business. For most businesses, a customer’s seventh purchase is more profitable than the first purchase because of the media cost required to acquire them as a customer. In that case the money is made in repeat buyers.

Some business owners understand that if they can get a customer to come in a 5th time, that customer will likely come in many more times. They may have detected customers who don’t make it past 4 just don’t have the same proclivity to shop there regularly as the ones that make 5.

In some businesses the money is made in large items. For example a watercolor painting store may really do well selling the large canvases and specialty brushes, whereas their paint-by-number and smaller painting kits don’t have the same margin. For restaurants that may translate to big money in catering dollars compared to the high cost of the single slice pizza customer.

Part of learning how to use Groupon for your business is understanding what kind of customer makes you the most money – and what is it about those customers that are different than the rest.
Defining the strategy

Before we get to Groupon, it’s imperative to understand the path that someone takes from before they know you exist until they are buying your high margin items. How does that path compare to the customers who never make it to the high margin items? Drawing or tracking the path that your customers take on that journey will give you great insight into what types of marketing you should be doing.

While it’s not easy to do, tracking the source of your customers over the long term makes enormous business sense and well worth the money spent. For a cleaning company it would be great to know if the “get your bathrooms squeaky clean” or “spend time with your kids, hire a maid” produced the most profitable batch of customers.
Crafting the Deal

If your ideal client is the mom who buys a full year of gymnastics lessons, because that parent is likely going to buy 2, 3 and 4 years of gymnastics lessons, then it makes sense to create a special that encourages mom’s to buy a full year. Whether that special is on a flyer, in Groupon or through e-mail it doesn’t really matter. Anyone gained through that effort is likely to be a customer for the next 4 years.

Suppose it is the large, blank canvas buyer that makes you the most money. . . If that’s the case, is it the beginner painter or more intermediate painter who takes on a large canvas painting? If it’s the more advanced, perhaps creating an offer for a very specialized art technique class would appeal to intermediate painters – the ones who buy the big canvases. An “intro to painting” class may not be as lucrative in the long run.