A Small Business Groupon Case Study

I recently interviewed a local beauty salon about their use of Groupon as part of the research for my social media marketing book. It was a fascinating insight into...

Groupon

I recently interviewed a local beauty salon about their use of Groupon as part of the research for my social media marketing book. It was a fascinating insight into how the billion dollar “local coupon” start-up is changing the face of marketing for small, local businesses. Without publishing the interview in full – here’s a quick summary of the salient points:

  • The owner was sceptical about Groupon’s claims – but was fed up paying for local advertising and listings, so gave it a go.
  • The salon has now run 3 campaigns since October 2010 and recruited over 500 new customers from within their local area.
  • She warned against offering too many deals too quickly. They were careful to run a series of small campaigns, but some companies have been overwhelmed and unable to redeem all the vouchers they’ve sold.
  • Groupon are apparently negotiable on the fee they take (usually 50% of the offer). This particular salon is now getting 55% of the fee.
  • They used to use Facebook and Twitter, but Groupon has taken over as their marketing channel of choice. Social media marketing now makes up 85% of their marketing activities.

It should also be noted that Groupon now has a serious competitor. LivingSocial is fighting for exactly the same patch of grass and it looks like the battle just got ugly. While Groupon now boasts 40 million registered users, LivingSocial (which is part-owned by Amazon) is offering a $20 Amazon voucher for $10; effectively buying new members for $10. Seems expensive, but then again, if it’s reported 20 million users make it worth half as much as Groupon, it’s a hugely smart investment.

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1 comment

  1. Localpinch.com Reply

    our website http://www.localpinch.com takes local small business marketing a step further than groupon and allows any small business to sell a gift certificate (discounted or not) in our marketplace. a small business can create and manage their gift certificates using our gift certificate creation and management tool.

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