Groupon Brings the Mob Effect to Your Store

Posted by: Ralf Kircher in MyBlog

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Ralf Kircher

If you haven't yet heard of Groupon.com, better have a look. It's a website with 10 million members that features daily deals at local businesses in 85 U.S. cities. Members receive an e-mail with a daily offer of discounts on products at local business, tickets to events or services at local establishments.

A minimum number of customer have to respond to the coupon for the deal to be valid, and members pay to access the deals.

A report on the Aug. 26 edition of Marketplace on NPR says some businesses have actually been overwhelmed by the response and unable to keep up with the deluge of new customers. A spa in Chicago, for instance, was faced with 1,300 new potential customers when it offered an introductory facial. A Portland, OR, garage offered a discounted oil change and had 700 new customers.

The Marketplace report quotes a Groupon spokeswoman as saying Groupon coupons aren't meant to make a business money; rather they are about driving traffic into the business. In other words, it's up to you to keep all those new potential customers coming back.

Go to grouponworks.com to find out how it all works from a retailer's perspective. Sounds like a great way to bring in more traffic to your store.

(One more tip as a sort of postscript: If you're looking for a daily dose of business news that translates how all those national economic statistics you hear every day affect you as a small business, American Public Media's half-hour Marketplace radio show does a phenomenal job — I download the podcast and listen to it on my commute every day. OK, next thing you know, I'll start sounding like one of those pledge drives that ask you to donate to your local public radio station, so I'll just shut up now!)

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written by Tim Harold, September 22, 2010
This is a really interesting idea that I've been thinking about more and more. Since we have a full service repair shop I thought about offering a discounted rate on a repair we do all the time (watch batteries, clean polish, rhodium plating, check and tighten etc). Since the rate would be such a good deal we wouldn't be making much money from it but the traffic that it could drive to our store would be very beneficial in snagging new customers. Jewelers historically stay away from this kind of advertising (and for good reason too) but it could be beneficial. I'd be interested to know if any jewelery stores have done this and if it was successful.

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