I’ve been a fan of Groupon since one of our Pittsburgh restaurant clients launched the city’s first promotional campaign. And, I’ve become a bigger fan since other hospitality clients have achieved success and after discovering that Groupon founder Andrew Mason is a Pittsburgh (Mt. Lebanon) native – you go guy!
If you read the marketing trades you’ll find some complaints about the lack of profitability of using Groupon as a marketing tactic, but I’d bet that those complainers were not prepared to take advantage of the popular loss leader strategy.
Here are ten profitable Groupon marketing tips.
1. Say “NO” if you’re below. Below average that is. In short, you do not want to feature your brand in a Groupon campaign if you don’t “bring it.” That is, if you sell lousy food (even marginally or mediocre OK), have poor service etc., you do not want to do Groupon! If you do not “deliver the goods”, Grouponers may simply put you out of business earlier than you would normally through negative reviews online etc.!
2. Get buy-in to prevent crying. Far in advance of your scheduled launch, talk through the campaign pros/cons of Groupon with your staff. Get their buy-in early on and clearly explain why everyone needs to be engaged in this huge loss leader effort and why you’ll need all hands and minds on deck to flawlessly execute the campaign. Tell them, “what’s in it for them!”
3. Map your cap. Cap the total number of deals you provide to Grouponers. This creates urgency and protects margins since the offer deadlines are long. Plus, you need to make sure you can handle the traffic. Sure you want to make short term money – you always do – but your eyes need to be on the prize of repeat business!
4. Don’t wreck your average check. Make sure your deal/offer does not match you average check/purchase to allow for upsell and add-on sales opportunities. And, a lower price tag protects you as well on total customer acquisition costs. Keep in mind that you’re earning around 1/4th of what you’d usually make in an average sale which means you’re losing 3/4ths on virtually every sale.
5. Don’t laugh – add staff. Trust me – make sure you add staff to handle increases in store traffic, phone calls and web hits during and after the sale. You’ll need it!
6. Right your Website. It’s highly likely that your Web site has never seen the kind of traffic it will see on your Groupon day. Make certain your brand’s value proposition is clear, meaningful and relevant throughout your Website and especially on your home page because it’s going to get pounded. And, fix your typos, broken links etc., – net, clean it up! Also, monitor your Groupon comments on your “game day” and answer questions there as well on your social media channels.
7. Up-sell, cross sell and do well. Train your customer facing personnel to up-sell and cross-sell and guide all Grouponers to more profitable add-ons. However, make sure you have lots of exciting ones to offer too.
8. Train to explain. Carefully review (and test their knowledge) your Groupon procedures and rules of the game with all team members so they in turn can explain the campaign to customers, friends and family. You need to do this crucial step to ensure viral communications and no surprised/unhappy customer experiences. Make certain everyone is happy to take Groupon customers and consider putting someone in charge to answer escalated questions and make on the spot decisions to satisfy customer concerns.
9. Retain and gain. Since Groupon does not give up its email database and/or the contact information of customers who take advantage of your offer, it’s critical you have a system (recording system and/or additional incentive for customers/staff) in place to capture valuable new customer contact information (e.g., email addresses, mailing addresses, cell phone numbers, birthdays etc.,). You’ll also want to track your success with regard to add-ons, average check/transaction, redemption rates, repeat business and more to determine your success and key learnings should you do it again – consider a customer survey too!
10. Show how to WOW now. A ton of your Grouponers will be new customers (and might be bringing other new customers in with them) and may be unfamiliar with your unique value proposition, but you have a great – maybe once in a lifetime – opportunity to WOW them, make them repeat customers and spread your good word. Make sure you take advantage of this opportunity. Be a servant leader and SERVE lights out!