Groupon is the original group discount outlet that uses grassroots collective purchasing power in an effort to secure 50-90% off deals for its membership. Members subscribe to receive exclusive deals each day from local retailers and service providers. If enough members show interest in the deal, it becomes available for all members to purchase during that day, only.
What this means for advertisers is that they have the opportunity to offer what amounts to a bulk discount to the members of their local or regional Groupon. The advertiser offers a product or service for at least 50% off of face value and splits the proceeds with Groupon after the deal has closed. The advertiser receives approximately 25% of the value of the item offered. Because of this elimination of almost any profit margin, a Groupon deal is an example of what is known as a “loss leader.” You may lose out on that initial visit, but the hope is that they will return many times to purchase your wares at full or sale price. By getting your company on Groupon, you are exposing your brand to hundreds of thousands of potential new customers.
In the last year, a lot of other newspapers and websites have begun running their own group coupon programs. To hold its position as the industry leader, Goupon’s offers have begun tending toward what they’re calling “full experience packages.” This means that, while a year ago, you may have seen a cheap deal on community theatre tickets, this time around, they’ll likely offer a package that includes snacks, beverages, and a one-on-one with the actors, at a significantly higher (though still incredibly reduced) rate.
Due to Groupon’s exclusivity and noted reputation, more advertisers want to offer a deal, than there are days available to do so. This results in a lot of offers, and indeed even entire companies, being rejected by Groupon’s sales force. A December 2010 article in the Wall Street Journal quotes CEO Andrew Mason saying, “[Groupon has] to pass on seven out of eight merchants that contact [them].” Our agency would be happy to speak with Groupon on your behalf to negotiate an attractive deal.
If you’re company is interested in using Groupon, please contact us at (631) 207-1057.
