A Tale of Two Groupons

If you offer, they will come. In droves.

If you offer, they will come. In droves.

The day I got married, my family broke the law.  (After 18 years I figure the statute of limitations is up.)

Our wedding reception had 185 people in a room zoned for a maximum of 180 occupants.  (Cue the sirens.)

We had invited 250 guests.  I wanted to invite fewer, fearing we would exceed the limit.  But my parents cast a wide net.  They expected at least 70 regrets.  It was the only aspect of my wedding planning that we disagreed on. 

And the one time I would have been happy to be wrong.

Please understand.  It’s not that I disliked anyone who attended my wedding.  (If you attended my wedding, please reread that last sentence.)  It’s just that we didn’t have the room.

But here’s the thing:  weddings can take on a Field of Dreams quality.  If you invite them, they will come. 

You need to accommodate everyone who accepts your invitation and welcome them with joy.

These tenets hold true for Groupon marketing as well.

Sally Collura, owner of The Tea Leaf in Waltham, MA and Groupon veteran, advises, “Make sure the customer experience is a positive one.  Treat them as if they are paying full price.”

Groupon sold 993 of Sally’s half-price “afternoon tea for one” offer last January.  Sally had approved the ad copy for her Groupon offer but did not see the title before it launched.  The title erroneously touted afternoon tea for two, and she had to get Groupon to correct it.

Afternoon tea is not a common concept for many people.  Though the Groupon organization fielded basic questions, Sally was deluged with clarification requests for weeks after her coupon launched.

For the two weeks after the offer ran, Sally was bombarded with reservation requests.  After that initial rush, reservations slowed to a steady pace.  During the first 5 ½ months of her 6-month offer, Sally fulfilled over 350 of the offers sold.

Two weeks before the offer expired, reservation requests skyrocketed.  Dozens of last minute offer holders vied for her 20 afternoon tea seat reservations.  She accommodated as many as she could.  The remaining offer holders were able to use the Groupon post-expiration for the amount they paid, the standard Groupon policy.

Was it worth it?  Sally says yes.  “Several people have told me ‘I never would have known you were here if I hadn’t purchased this Groupon.’  That’s the reason to do it.”

Sally reports increased business due to the Groupon with several people returning for tea and others coming to buy packaged tea or a gift.

Jodi Franklin, owner of Fabulous Family Meals, ran a Groupon last January as well.  Fabulous Family Meals makes fresh, organic homemade meals that clients can heat or freeze for another time.  Jodi’s Groupon offer was complex – you could get meals for three or six people, and buy a three-pack or six-pack of meals for your group size.  Moreover, you had to use the offer over the course of several orders.

“Ad copy is a big issue,” warns Jodi.  “Groupon controls the ad copy.  You can’t object to the quirky humor, but you can correct factual errors.”  Her original ad copy failed to explain the details of her offer and stated that delivery was included.  It wasn’t.

Jodi’s calls to correct her ad copy were not returned before the ad ran.  She needed to insist on corrections post-launch.

Jodi is not one to be bullied though.  While Groupon typically gives vendors only half of the proceeds from the offer sale, Jodi negotiated to keep 62 percent.

Was it worth it?

Yes, says Jodi.  Her goal was to get the company name out there and gain new customers.  Her Groupon offer did both.  Half of those that used the Groupon ordered additional items at the same time.  Several Groupon holders have continued to order from her after exhausting their coupon.

Would she do it again?  Jodi says, “Yes, but I would do a simple dollars-off offer.  Also, I might try LivingSocial or another service to access a different distribution list.”

Here’s what you need to know to run a successful social coupon offer (Groupon, LivingSocial, Try It Local) to build your business:

  1. Social coupons are advertising, not revenue generation.  The net cost of fulfillment is your payment for access to the inboxes of thousands of potential customers on the social coupon provider’s distribution list.  It is a marketing expense.
  2. Use them to increase awareness and bring in new customers.
  3. Keep it simple.  A straightforward offer will appeal more, require less explanation, and increase the chances that Groupon will get it right.
  4. Be clear about the fine print.  You may want to stipulate one coupon per party or designate specific times for redemption to fill in slow periods.
  5. Review the coupon before launch.   Insist on seeing all aspects of the offer:  title, ad copy, and fine print.  Communicate corrections pre-launch.
  6. If you offer, they will come.  In droves.  Phil Schein, owner of Fazenda Coffee Roasters, reports that he sold 600 Groupons for his Jamaica Plain café.
  7. Make an offer you can afford.  The coupon proceeds will not cover the cost of fulfillment if you are successful.  If resources are a concern (money, staffing), consider limiting the offers sold.
  8. Be prepared.  Add staff for the barrage of patrons and questions at the beginning of the offer period and for the rush of last minute redemptions near the expiration date.
  9. Provide a great brand experience.  This will be the first exposure to your business for new customers.  Wow them.
  10. Connect with new customers.  Get them to sign up for your newsletter, give their address or like you on Facebook.
  11. Measure your results.  Track the number of customers who buy supplemental items and who become repeat patrons.  These are hallmarks of social coupon success.

With good planning you can build your business with a social coupon offer and avoid exceeding your maximum occupancy!

Do you have a Groupon experience to share?  Please comment!

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2 Responses to A Tale of Two Groupons

  1. hi evelyn, i’ve been considering running a plum district promotion and your piece gives me clarity and confidence. thank you (again!!). cindy

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