The Groupon Phenom – Does it create Loyal Customers?

Everyone loves a good deal, even me! In this economy when businesses are struggling to get and keep loyal customers, a Groupon campaign can help you drive customer traffic. But it’s your goal as a small business owner to create loyal customers from these visitors.

Groupon offers subscribers a deal-of-the-day where a local business features services or products at heavily reduced discounts anywhere from 50-90% off. The catch is that the business sets a minimum number of purchases before the deal is “on” for everyone. With over 10 million subscribers at last count, Groupon is a powerful marketing tool sought out by both the biggest and smallest of business owners. From what I hear from local businesses, there is a waiting list to feature your business.

That hasn’t been a problem for most businesses, and in fact, some have been overwhelmed with the response rate. Groupon launched its first national deal this past Thursday with GAP to offer $50 worth of apparel and accessories for $25 and about 450,000 Groupons were sold.

Sounds incredible right? But what about the local small business that creates these deals. If they are barely surviving and think that a Groupon campaign is the answer, they may be sadly mistaken. Here are some things to considering using these types of services:

• Cap the number of deals you are willing to sell. Decide first how much in discounts your business can afford to accept based on your margins.
• Prepare your store. Decide who will be in charge of handling these coupon customers when they have questions about the program. Make sure that your front liners gladly accept the discounts.
• Prepare your staff. Let them know you are participating in this type of marketing and that you have their buy-in. This is the time to make your best first impression with these customers.
• Have a Retention Plan in place. What good is it if you have this rush of business but you aren’t retaining these customers? Many of them are simply looking for the deal of the day and never plan to return. Encourage them to join your mailing lists, social media sites, text messaging campaigns, etc., and give them a compelling reason to return – one being your outstanding customer experience.

We’ve just begun to see more and more group buying websites pop up due to Groupon’s popularity. Sites like Buywithme.com and Livingsocial.com are other examples. Make sure that your customer loyalty programs capture these customers so that you can grow your repeat business. Otherwise, you could be missing out on the full benefit of increased customer traffic.

 

Norma, The Loyalty Lady,is an innovative Customer Experience Strategist, Business Coach, Blogger and Speaker. She works with small service businesses to help them build an unprecedented customer experience that will drive customer loyalty and retention. Contact her at [email protected] or by phone at (480) 694-6940.

More from Captivated Customers

• The Loyalty Lady Drives Customer Retention
• Customer Rage is on the Rise
• 3 Ways to Stop the Churn

Captivated Customers Recommends

• The Metrics of Social Media  (Danny Brown)
• Why Loyalty and Mobile Marketing is the Future for Retail  (Danny Brown)
• Is Your Marketing the PITS?  (Danny Brown)

Ask Captivated Customers To Recommend Your Posts