Best Practices for Using Groupon

By Bob Phibbs

Said on the Web

"Call to Action Tip: Give a Reason to Click! Your CTA should be useful, desirable, helpful, $ saving, etc. to the reader."
Tweeted by @EmailDirect, May 13

"If you're inviting email subscribers to check you out on Facebook, romance why they should join your page with a few bullet points. Can they take polls, enter contests and get other exclusive content? Consider placing the call to action near the top of the page rather than the bottom."
Linda Bustos, Get Elastic Ecommerce Blog, May 13

"Catalogs aren't dead. Newspaper inserts aren't dead. They may be on life support, but there is still a place for both. It's important for retailers to understand though that they can't expect the same return on their catalog and insert investments as they did in the past."
Bob Thacker, Shop.org Blog, May 13

"The research we have on smaller retailers indicates there is a much wider satisfaction gap, and that many are  struggling to provide the kind of online customer experience  that will result in financial  rewards."
Ian Greenleigh, Bazaarblog, May 10

Q: "I'm currently thinking about using Groupon to promote my local retail business. Are there any best practices around it that I should follow?"
— Katlin Farrell, consultant, Mercer Carpet One Floor and Home

A: A quick Google search of Groupon purchases of "Carpet One deals" is low by Groupon standards, from 23 deals to 80 deals. Most Groupon deals sold are in the hundreds at least.

Why so low for flooring? Because most floors are a couple thousand dollars, and $80 for $2,000 of flooring isn't more than 10 percent, which is much less than most flooring stores are offering.

Groupon offers seem to be really popular if they're half off the product or service. I'm not saying to do that, however.

As the author of the new e-book, "Groupon: You Can't Afford It — Why Deep Discounts are Bad for Business," I've found that a lot of the best practices ignore the hard realities of just how much you're giving away. Some would say it's best practice to limit Groupon deals to new customers only.

Really? Punish your loyal customers to reward people who don't know you? That's not a way to build rapport with your best customers. The reason many people will use Groupon in the case of your business is because it's built up its local reputation so well they know it's a true deal. Limiting a deal to new customers negates that work.

Using a site where you give a large discount to customers and receive roughly 23 percent in return isn't a problem when your average ticket is high. But it also isn't part of the huge, OMG discounts Groupon is known for.

Your company does a lot of discounting already, which I noticed after seeing the "Private Sale" section on its website as well as all the other discounts  it offers.

The home market is tough these days. I suggest taking the money you would have given to Groupon, LivingSocial or another group coupon site and investing it in new sales training so you don't have to rely so much on discounting.

Shop Talk: Best Practices for Using Groupon