Uni or SME? Get involved properly with Groupon

May 2011 stats from eMarketer identify that this year 47% of US internet users (88.2 million) were online coupon users in 2010, and this figure is set to rise by 8.5m by 2013. The UK figures aren’t as huge yet, but bear in mind that 50% of Groupon users are based in the US where the organisation started out, but the top 5 UK online coupon sites had 7.83m unique users in April 2011 (source: comScore, article by Marketing Week – for the record, I don’t agree that LivingSocial will overtake Groupon. Groupon’s exponential growth over the coming months will dwarf LivingSocial’s).

Marketing managers are more accountable than ever for the performance of every pound of their budgets and the trackable nature of online coupons, mixed with the success of sites such as Groupon, provide a marketing tool that is difficult to ignore. Especially considering the proposed partnership between Groupon and Foursquare combining location-based services, one of the areas to watch in 2011, with the success of online coupons.

There is a problem though. When organisations or institutions see these performance figures there is the risk of jumping on the bandwagon without thinking things through. If you have read any of my other articles or seen my presentations, you will know that I like people to ask themselves questions. More specifically, the right questions. In relation to online coupons, don’t ask yourself “How do I get involved with Groupon? Everyone seems to be using it at the minute”. Rather, ask yourself the following (other online coupon sites are available, but I write the following in reference to Groupon):

  • “Does Groupon provide a cost-effective channel for my product or service?”. Will you be offering your product/service at a loss? This is fine if it results in long-term customer relationships, but be aware that many coupon users will be one-time only users of your business.
  • “If it does, how can I differentiate my offering from all of the other companies using Groupon?”
  • “How can I integrate my Groupon campaign with other marketing and social media activity?”
  • “Can we handle the influx of business that the vouchers will create and can we avoid negative customer experiences that will be detrimental to our brand?”. You could end up with hundreds of customers and failing to provide the usual level of service that you provide. The end result is a bunch of low-profit, brand damaging transactions because you can’t handle the load.
  • “What is my strategy to ensure these coupon based transactions result in long-term, profitable and engaging relationships?”. At a basic level, this may be adding customers to your email list. If you want to get more creative, get people to check-in/tweet/update statuses/record and submit videos whilst using your product or service. Create a buzz around your brand whilst these interactions are taking place to really get the most out of each one.

My advice would be:

SMEs – think creatively about your online coupon offering and don’t consider your strategy in isolation. Think about how the coupons fit into your marketing plans and social media strategy. Support your plan with rich media content, such as a video showcasing the product/service on offer, and promote this content via every marketing channel at your disposal.

Universities – now more than ever you should be partnering with local businesses. They rely on trade from your students every year, your students are integral to their business model. Why not use this to your advantage? Use locally sourced promotions to increase student engagement at careers events and such (e.g. Receive 20% discount on food at Tiger Tiger when checking in at Sports Hall for careers fair).

Online coupons offer a great opportunity for consumers, businesses and universities. I hope that they receive proper consideration in the marketing planning process going forward. I would love to hear your thoughts and experiences with online coupons, as a consumer or a brand. Just add your comments.


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