Many small business owners consider using Groupon to promote their business and see success. In theory Groupon is brilliant and a great way to advertise, but does it work for every small business owner?
One small business owner in Portland, Oregon says it did not deliver the win, win deal as promised on their website. Jessie Burke, the owner of Posies Café tried Groupon and says she would not use it again. According to the owner, Posies’ foot traffic tripled, but the majority of her new customers did not spend more than the Groupon offer, they used multiple Groupons, and neglected to tip staff members. A few customers attempted to use expired coupons and subsequently became irate with staff members when they were refused.
“I consider it the single worst decision I’ve ever made as a business owner, I could have done a lot more with a lot less frustration.” says Burke.
Four lessons small companies learned from Groupon your company might want to consider from Burke’s story.
1. Put a cap on sales.
To limit the number of discounts available, Groupon offers to cap any of the deals it publicizes. Don’t hurt your business to get new business.
In addition to placing a cap on deals, Groupon allows business owners to customize various parameters of an offer. Include gratuity and limit the number of times a coupon can be used.
3. Use the merchant services tools.
Groupon recently added a number of tools to its merchant services department. Among other features, owners can access return on investment (ROI) calculators, capacity-planning tools, online redemption-tracking software that can be downloaded to a mobile device and a two-way ratings system that allows merchants to identify problem customers and vice-versa.
4. Ask for the 50/50 split on all sales.
When working with Groupon, as a owner you are typically paired with a Groupon sales representative. Be sure to negotiate 50/50 offer and be sure of the details.