Using Groupon to Create Long-Term Customers

There is a debate raging in the business community: Is Groupon good or bad for business? Some independent research indicates that 40% of merchants that use Groupon do not use them again. If that statistic is true, it is definitely worth looking at why, and whether or not Groupon is a business ‘killer’ or helper.

The basic problem seems to be that Groupon feeds on a coupon mentality that is addicted to deal-shopping and in many cases discourages loyalty. After all, why should a consumer favour your business in future if they don’t get another coupon? And why should they come back when they are now trained to look for similar coupons from your competitors?

From my research, it seems to boil down to this: Groupon is a great lead generator, but if you don’t have a loyalty program in place, or a method to upsell those new customers and get them hooked on value instead of price, you stand the chance of losing them just as quickly as you got them and perhaps even alienating your long-standing customers in the process. 

For some background information on the topic, check out these two PDF articles and then read about how you can turn Groupon into a lead-generation machine to create long-term customers.

Is Groupon Ruining Retailing?

 

Countering the Groupon Effect

 

Using Groupon as a Lead-Generation Machine

So what can you do to use Groupon to your advantage and build a client list? By using them as a lead-generation machine. And one of the best ways to do this is through the power of mobile marketing to cell phones. There are a couple of strategies for this.

Create a Mobile Phone Optin Program

The first is to set up an optin program whereby your Groupon customers are offered the opportunity to sign up for your mobile text alerts. In these alerts you will offer them VIP services and products, sometimes with a discount. The difference between this and the Groupon offers? You do not have to share any of the profits with Groupon, and you can tailor the offer to specific lists of customers you create. Groupon is indiscriminate when they send out email alerts – you don’t have to be.You can segment your customer data base and notify them of specific services and products of interest, thereby improving your sales

Using SMS text messaging to contact your customer list is immediate, has higher delivery rates than email and higher ROI. You create your mobile list by inviting your Groupon customers to join your list when they phone in or come in to redeem their coupon. You can also set up an incentive as part of the SMS campaign to reward them for signing up.

Create an Upsell Program

The second approach is done prior to a Groupon campaign and involves setting up a landing page (web page) to upsell your Groupon customer to other products or services while they are in the buying mood. Groupon allows you to re-direct to a web page so you can do this within their terms of service. This is a great way to offset any loss in the Groupon program with profits from other offerings – profits you don’t have to share with Groupon. Better yet, if you have a service you can use to create a continuity program (monthly program customers sign up for) this is an excellent place to introduce it.

As with the first strategy, you can also invite customers to optin to your SMS list to receive future promotions. Because they are choosing to opt-in and can opt-out at any time, you are not spamming them .

These are two powerful mobile strategies you can use to turn a potential losing venture with Groupon into a fantastic customer lead-generation system and build a long-term customer base.