Hot on the heels of rising star Foursquare comes the latest contender eager for a share of the social media spotlight. Similar in nature to Foursquare’s promotion-driven focus on local business, Groupon refines the idea further.
The appeal of any platform that promises new ways to help local businesses connect with customers is undeniable. The success of Groupon will, as always, be decided by the fickle consumer and how quickly (or indeed whether) they adopt the platform. Consider this fact, however: in October last year technology website mashable.com reported that Foursquare was approaching its 4 millionth member – clearly the social media train shows no signs of slowing. In this article, we’ll take a brief look at what Groupon is about, and how it could help your business to succeed.
Reaching out to new customers
One of Foursquare’s key selling points to business users is that it offers promotion-driven incentives for users to visit businesses in their area. Whereas FS adopts a wider, socially interactive user experience similar to Facebook’s Places app, GO takes a purely business-centric angle. Focusing solely on offering promotions for local businesses, the website promises to ‘deliver customers to your door’ through offers fed to users via email, Facebook and Twitter.
More than a simple online promotion, the site hopes to engage users via ‘a witty, positive write-up that is seen by our tens of thousands of email subscribers and website visitors.’ The company go on to claim that ‘subscribers religiously read the entertaining descriptions of our featured businesses, delivering a promotion that is far more engaging than traditional advertising.’
How does it work?
Groupon offers are based on a certain number of takers for any given offer. If the required amount of customers sign up to the offer, then it becomes active. If this minimum is not reached, then the offer remains dormant however. This ‘no-win, no-fee’ basis, it appears, is designed to remove the element of risk for businesses investing in the platform’s online promotion scheme.
In addition to promising ‘huge exposure’ via featured offers, the company claim the ability to generate a significant ROI over a short period. Much of this premise appears to be based on word-of-mouth via current users, so it is somewhat difficult to quantify at this early stage.
Is there a catch?
Groupon claim that merchant feedback shows an average check size of 60% greater than the Groupon’s value, and that most takers are first-time customers. In addition, there are no long-term contracts and a ‘no-win, no-fee’ approach to billing. Whilst GO claim to ‘guarantee’ a certain amount of customers however, this is clearly negated by the fact that the promotion is free should this number not be reached. This appears a little contradictory, if not misleading.
As with any new social media innovation, the success of GO will ultimately be decided by how many users (potential customers) choose to adopt the platform. In truth, at present the website could perhaps use a little more focus/distinction between users and businesses, but there is no doubting its potential as an extremely useful tool in any internet marketers’ arsenal.
