Its hard to imagine a world without coupon sites anymore. You can buy everything from dinner reservations to hotel reservations, and everything in between. I’ve talked quite a lot about coupon sites here on Virtual and have read a variety of opinions on the subject – are they good for business or bad?
Dig Deeper: The Pros and Cons of Using Groupon
Yet no matter what side of the fence you are on, one thing is for sure. They will not go away anytime soon.
If you are looking for new ways to bring in traffic this year, coupon sites may be a great way to get more people in the door. Keep in mind there is a right way to it … and a wrong way. If you learn how NOT to use coupon sites, you’ll have a greater chance at using them successfully.
Money Losing Strategy #1 – Sell Your Basic or Most Popular Product
Groupon and other social coupon sites are designed to introduce you to new customers, bring existing customers back in, and build up a new revenue stream. If you use it to connect up with your regular customers and offer them a discount on what they already buy on a regular basis, you’ll be severely cutting into your expected profit margins. Instead, think of Groupon as a way to test out new ideas. If you are a wedding photographer, maybe you would love to get into Trash The Dress sessions after the big day is over, or Love Portrait sessions taken of happy couples throughout your community. Invent something new and make an offer. This will bring in new clients for your new idea, and give you a way of building up an entire new area within your existing business.
Money Losing Strategy #2 – Sell Long Term Products and Services
Groupon works best when you sell today and bring the people in tomorrow; not next week or next month. The goal is not to have offers trickling in over many months down the road. Instead you want to find something that immediately brings people in to connect with you. The longer they wait, the less chance you have of making a connection.
Money Losing Strategy #3 – Create an Unprofitable Offer
One of the easiest ways to promote on Groupon is with a half off offer – get our $100 service for $50. Yet where does that offer leave your profit level? Before you create your offer, make sure you calculate your expenses. With a Groupon offer, if a new customer only takes advantage of the offer without additional sales, will you break even? If not, restructure the deal. While a social coupon offer isn’t designed to bring in large amounts of profits, it also shouldn’t leave you in the red. Plan for 10 to 30 percent moving forward and providing you with additional sales. Assume the rest will only take you up on your original offer. If the deal makes sense looking at these numbers, run with it.
Money Losing Strategy #4 – Focus On The Sale, Not The Brand
While many of the social coupon sites will design your ad for you, make sure you are a part of the process. Use your own photographs and provide as many as they will allow. Create your best example possible – if it’s a new idea, find a “model” that will allow you to capture your idea for the promotion. Use your colors, your logo, and your branding throughout the ad. Make sure you link back to your website, link to different parts of your site, and even talk about the offer itself on a post. Even though Groupon will be promoting it, you can still talk about it yourself. The idea is to create excitement over your new concept and showcase it in a variety of ways. Get people talking. It will only help you further promote your idea in the future.