People are conscious about their spending during economic downturns. Some companies have taken note of this habit and produced new and innovative services to attract customers during economic downturns.
Groupon is a group buying site which uses collective buying power to provide large discounts for its customers. Each day, one deal is emailed out to all subscribers, who then choose to buy the deal or not. If the target amount of buyers is reached, then the deal is on. In nearly all cases, this happens. Groupon also gives subscribers credit for every friend referred who signs up and buys a deal. For purchasers of Groupon, the incredible local deals coupled with deep discounts are perfect for tight budgets.
I use Groupon, and I think it’s great. All the deals provide great prices that you normally wouldn’t seen, with many offering around 50% off. Because of Groupon, I’ve tried things like High Tea at the Fairmont Vancouver Hotel that I normally wouldn’t try.
Groupon clearly appeals to its subscribers, but what about the participating merchants who are featured on the website? What do they get out of it?
The answer? The ability to reach new market segments and attract new customers.
In fact, some past participating merchants say that their phones were ringing off the hook after they were featured on Groupon. Many sold more Groupons than they had expected. The success that they have experienced has led some to become repeat merchants.
In my opinion, collective buying sites like Groupon are a great way for merchants to get their goods and services publicity. More than 17 million people are subscribed to Groupon, and because Groupon is distributed by email, these people are highly reachable. Furthermore, there are options to Tweet or share the daily deal on Twitter or Facebook, which spreads the deal of the day even further.