Offering deep discounts on your products and services can be a bad thing for your company.Ĭonsider your size: What type of business do you have, and how many people can you reasonably serve? If you're a small salon with five chairs, for example, do you really need to open up your business to 500,000 potential customers? Consider Blo, a small salon and day spa in Chicago. The easiest way to do this is to request an e-mail address at the time of the transaction (note, though, that it is illegal to require an e-mail address), or to put an e-mail sign-up list near the register.
E-mail marketing is a valuable way of keeping in touch with your customers, however, so now is the time to implement an e-mail list. Service-oriented businesses might consider offering an incentive for customers to sign up for another appointment on the spot.Ĭollect e-mail addresses: Because of Groupon's privacy policy, Groupon cannot give businesses the e-mail addresses of the users who purchase Groupons. Prep your salespeople to bring their A game and to sell extra products to customers aggressively if you aren't selling more than what the coupon is worth, you are losing money. Here are five Groupon nightmares that could happen to you - and how to avoid them.Ī one-time customer who buys nothing extra is the worst situation for a small-business owner, because you're basically giving your products or services away for free.īe prepared: Many Groupon customers are in it for the deal - with no intent to come back or to purchase more than the coupon is worth - so you should set up your store or business accordingly. And 40 percent of the respondents said they would not use Groupon again - notable, considering Groupon claims that at least 95 percent of its sellers request to be featured again.īefore you jump on the social-coupon bandwagon, make sure your business can handle it. While 66 percent of the 150 respondents said that their Groupon deal was profitable, a significant 32 percent found it unprofitable. A recent study by Rice University surveyed 150 small to midsize businesses that had used Groupon, asking about their social-coupon experience and whether they would use the service again. Posies Café faced rude customers and overwhelming traffic - all at a price that barely covered the base cost of the food being sold. Owner Jessie Burke penned a revealing blog post about her café's losing more than $8000 from its Groupon promotion.
Portland, Oregon-based coffee shop Posies Café is one of those businesses.
As some small businesses have learned the hard way, running a deeply discounted deal can give you so much traffic, and so many customers, that it will cost you money-a lot. But small-business owners should be careful not to get swept up in the frenzy of social coupons.
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