Groupon Merchant is an online merchant center geared toward allowing local businesses to sell their products or services at a discount.
Initially, the concept of the site seemed relatively straightforward. Small business owners could easily run a Groupon campaign, allowing new customers to try products or services that they wouldn’t have heard about otherwise. By using Groupon vouchers, customers would gain access to local businesses, and these companies would build a loyal customer base.
However, during the initial stages of the Groupon Merchant app, this was more dream than reality. In fact, a 2010 study by Rice University — conducted two years after Groupon launched — found that daily deal sites were much less popular with businesses than shoppers. Forty percent of small businesses surveyed said that they wouldn’t rerun a Groupon campaign.
Since 2010, small business owners have figured out creative ways to use Groupon to drive traffic and convert new visitors into a repeat customer base.
If you’re a small business owner considering new marketing avenues and would like to learn more about how Groupon works, you’re in luck. This article contains some of the best practices to help you reap marketing gold from a Groupon Merchant deal.
Tips for running a successful Groupon Merchant campaign
If you’re interested in offering deals on Groupon Merchant, you may find the process overwhelming the first time you try it. The eight tips that you’ll find below should help streamline the process and increase the likelihood of a successful campaign.
1. Choose your category wisely
The Groupon Merchant Center offers four main types to choose from:
- Local Deals: This is the most common deal builder on Groupon. This feature allows small business owners to drive traffic to their product or service through a Groupon voucher that only reaches local clients. Think along the lines of, “20% off your next visit.”
- Getaways: If you’re managing an upscale bed-and-breakfast in a popular tourist destination, it can be hard to stand out from larger hotels with big advertising budgets. Running a deal on the Getaway site can help you target customers who are already planning to visit your area. Whether a traveler is looking for a unique place to stay or a last-minute deal, they can use Groupon getaways to find the right place.
- Live: If you host events, you’ll want to look into the “Live” category. Using Groupon’s “Live” option allows you to sell event vouchers. These Groupon vouchers can be used for everything from concerts to speaker series.
- Goods and Retail: If you sell a product and you want to deliver it to a national customer base, this is the category for you. Although their product is exposed to a nationwide customer base, business owners can also select a local pickup option available. The “Goods and Retail” option could also be useful to those with a languishing inventory.
2. Start small to test a Groupon Merchant deal
When running a Groupon campaign, you can cap how many vouchers you sell. Don’t be afraid to start small and offer a couple of different Groupon vouchers before determining the best deal to use.
For example, if a coupon for “50% Off” blows out the door, you might find yourself wishing you’d made the price point a little higher. By setting a relatively low coupon inventory, you can tweak various metrics to ensure the campaign is driving the right traffic.
3. Stagger your Groupon Merchant Center redemption dates
Another problem you may run into when you offer a Groupon Deal is that everyone waits until the “last minute” to redeem the voucher. As a result, you’re stuck with a sudden influx of purchases, causing a potential decrease in customer service. New customers leave jaded, feeling as though they weren’t helped. Your goal of building a customer base failed.
To avoid this, stagger the redemption dates on your daily deals. Be mindful of when promotions will start and end because you’ll want to have enough staff on hand to make sure customers have the best possible experience.
4. Choose your Groupon Merchant offer wisely
It can be tempting to want to drive traffic by offering your cheapest service or most popular products, but that can be a mistake.
Going for quantity rather than quality is unlikely to attract your “ideal customer.” When you face an onslaught of bargain shoppers, you may not meet your upfront costs and may lose money as a result. You also won’t inspire retention, as these individuals are not the ones who make up your ideal customer base.
A better strategy is to choose an offer that’s in the middle of your core offerings. For example, if you’re a landscaper and have three tiers of service, consider offering a Groupon Deal for the middle level. You could also increase the price point and include tree trimming or another complementary service.
If it costs the same amount to get your crew to the location in the first place, you can make a bit more money by offering an incremental service and exposing your customer to some of the additional services you offer. Thinking outside the box is an excellent way to establish a customer base through Groupon.
5. Offer a dollar amount rather than a specific product or service
If you offer half-off a manicure, you’ll likely have customers come in for a standard nail treatment and not purchase any other services. You’re essentially giving away your service “at cost” without getting anything in return.
But if you structure the deal to offer $20 off a $50 service, you’re still making $30 on the sale. Offering a percentage-based discount can prevent you from recouping your upfront costs. Offering a predetermined dollar amount allows you to control the price point.
You’re also more likely to attract customers who are genuinely interested in your location and not just looking for the best deal possible.
6. Try to inspire a repeat purchase on the spot
One of the best ways to make money on a Groupon Deal is through the upsell. If you’re trimming trees, offer the homeowner a small discount on bi-weekly lawn service. Doing so incentivizes customers to return to your business. The best time to pitch a customer on additional purchases is when you’re already engaged in conversation with them.
One of the best ways to accomplish this goal is to explain the change that your service could create. For instance, you can tell the customer that the yard work every other week would not only keep the yard looking pristine, but also keep the plants healthy. Demonstrate to the customer that there’s value in the services you offer.
7. Treat your Groupon Merchant customers with respect
Rather than dismissing a coupon redeemer as a bargain hunter, train your salespeople to engage in conversation with the Groupon customers and find out more about them. The more you know about who’s redeeming your offer, the better the chance of converting the “right” customers — and the more data you have to plan your next Groupon.
Just because a customer isn’t paying full price when using a Groupon offer doesn’t mean they aren’t worthy of your respect. Consider offering a small, complementary service or gift to make yourself stand out from other small businesses in the area.
8. Encourage sharing on social media
Social media provides small business owners with access to millions of customers who they otherwise wouldn’t be able to reach. One of the ways small business owners can take advantage of social media is by encouraging customers to share the deal with their followers.
You can create an incentive by offering customers an additional coupon if they share the Groupon Deal on social media. For instance, you could tell customers to tag you in a social media post that they share with their followers. Then, you could send them a 10% discount on their next service.
Because your goal is to build a reliable customer base, this strategy should be effective. You’re adding to your audience and reaching new potential customers. And because they’re reading about the deal from a friend or family member, they may be more likely to trust the recommendation than they would if they found a random review online.
Encouraging customers to post on social media costs you little, but it could end up bringing you significant amounts of new business.
Measuring success when running a Groupon Merchant campaign
If you elect to run a campaign on Groupon Merchant, you should check your statistics to determine the effectiveness of your strategy. When you run your campaign, you’ll have access to a Merchant Dashboard. This is where you can track vital marketing metrics.
For instance, you can see your redemption statistics, including a breakdown of the number of Groupons you’ve sold and what percentage customers redeemed. You can also get information about customer demographics, including the age and location of those buying your products or services.
By tracking marketing metrics, you can quickly see which strategies work best and which ones you may need to reconsider.
Keep organized when using Groupon Merchant
A Groupon Merchant deal could bring exposure to your small business, particularly if you use some savvy tactics to structure the offering. Once customers begin redeeming Groupon Deals, you’ll want to make sure you’re using proper invoicing procedures to ensure that your cash flow is always on time so that you’re ready for the next deal.