Has Anyone Used Groupon to Advertise? What Were Your Thoughts

Has anyone used groupon to advertise a product or service?

The thought of an advertising going out to so many people is a great thing. Especially since I've heard its actually free to advertise and you get a cheque with all of the money people have paid for your service less the groupon fee.

Now the bad news, I've heard the groupon fee is like 50% of the proceeds paid. Which is crazy. Especially since you're most likely offering 30-50% off your standard price already.

So if you normally charge $1,000 for a service, and discount it to $600. If groupon take $300 you'r effectively providing your service at 30% of your normal charge.

Anyone know much about this or if any of what i've said is even true?

I tried asking Groupon but they wanted so much information and wanted me to jump through so many hoops before they discussed pricing etc with me.

Any thoughts will be appreciated.

Thanks

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Comments

  • +3 votes
    1. you must list thing at a big discount
    2. Groupon will take quite a large portion

    That's all I know. Most stores make no profit or lose some money on Groupon. Probably more wise to submit deals on Ozbargain.

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      People get reported when they post a deal on here when they're an employee or associated.

      They get reported for marketing, I guess it must be a pretty bad deal.

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    You also have non redemption so money in your pocket without having to do anything

    I would guess on lower priced deals that could be somewhere like 10-20% of all groupons sold

  • +2 votes

    I presume Groupon market their services as a way of (potentially) increasing your business massively & consequently you should see the hefty fees as more part of what you would otherwise put into your advertising budget.
    i.e. a way of buying customers

    One of the issues is that in many markets there are so many competitors on Groupon that people don't need to pay full price with yuo if they like the service - they just buy a Groupon for someone else if you don't stay on there (and of course people who buy on Groupon tend to be very price conscience).

  • +5 votes

    Your figures are in line with what I have heard, but also that it is very negotiable.
    If you have a smashing deal they will take less.

    Advertising on Groupon sets the expectations of price for your offer for everyone who ever sees the advert. Is that what you want? Assume zero customers will ever return.
    Is it still a good deal?

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      That's my biggest fear. Advertise our service for $80 instead of $160. Groupon gets 40. We left with $40 services and they don't come back next year when our regular price of $160 Is what we would want to charge.

  • +3 votes

    I've read quite a few articles saying that it is ineffective as a marketing tool, mostly that the customers you get will primarily be bargain shoppers who will not return without another discount. It makes sense, if the only experience a customer has with your product is at half price then that sets their perception of the value of that product.

    Anyway why post your bargain on Groupon and give them a cut when you can just post it on OzBargain?

    • -4 votes

      Correct. Groupon attracts the dregs of society who will never pay the regular price once they've tasted a significant discount. Waste of time for businesses.

      • +1 vote

        Isn't that what this website is about? We never pay retail price

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          Spot on. If a consumer doesn't perceive enough value at the retail price (which is often true in real), then why should they not consider discounted options, more so when they are easily available? Having said that, there are a lot of products and services on Groupon which have inflated RRP at which they would never sell anyway.

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    Maybe I can post something. Groupon can be beneficial if let's say, you're doing new launch or G&S to attract hype and crowd. It essentially eats into the profit vs traffic. If your business is maturing or matured and there's a general lack of new customers or falling revenue it may be a venue to look for traffic. However, be wary that this sets the mark and expectations for your new and may offend existing customers. Strategically executing the price and timing is so important to reap any kind of benefit from Groupon. E.g. downtime with no traffic etc…

  • +2 votes

    yes I know all about groupon / deals/scoopon sites
    my experiences are in hospitality, I dont know about goods and services

    essentially their requirement is 50% or more off of what you normally sell at
    plus on top of that they take 25%ish give or take of the sales

    so if you are a restaurant, say your deal is worth $100,
    you sell it for $49, and they take 25% which is $12.50
    so you are left with $37 odd and in hospitality thats virtually break even

    my opinion, based on years of using groupon as a customer and being a merchant

    it brings in the numbers and it also brings in the tightasses

    groupon sales staff are pushy, and will push the "think of the lack of profit from these deals as a marketing expense" argument

    they will even ask you to drop your prices even further if the sales promised/expected are lower,

    in our case they promised 100s of sales of an item at $12, it didnt sell that well, and next they were asking us to drop it to $9 to guarantee a zillion sales, I told them, if your sales targets are so important to you, why dont you pay us the same amount per voucher, and then you can drop it to any price you want? Obviously this didnt sit well with them

    repeat customers - highly unlikely, people who buy these vouchers arent the ones coming back at full price

    once people pay half price, theyre even less likely to pay full price and come back, unless your product is so unique

    groupon customers are often more fussier than normal customers

    that being said if you are a new shop or business, its a good way to get your name out or become noticed,
    even if you have full bums on seats, and making little profit, its better than having zero customers and zero profit

    Overall, my opinion, its a nothing lost or nothing gained, except in the circumstances of if your brand or product suffers because people have paid less for it or are aware of the cheap price point and wont pay full price

    groupon also pay in installments, also they have this unfair rule that you only get paid when the customer redeems, so if groupon sells 100 vouchers and only 80 are redeemed, they keep the revenue for the 20 that were unredeemed, you dont get a cent of it

  • +3 votes

    Your buyers will never come back to pay full price. Waste of time.

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