Coupons and Groupons

By joanne | 3rd June | Marketing Skills

Figures released this week show that high street sales have continued to grow this month, despite concerns that consumers would lower spending after the Royal Wedding and the Easter bank holidays.  This is great news for retailers – and also for those of us watching for the green shoots of a post-recession era.

And in the same week, Groupon has announced an initial public offering and is seeking to raise £460 million.  The company now reportedly* has 83 million members in 43 different countries and offers products and services at hugely discounted prices.  The offers are typically available for a limited time and a minimum number of members have to take up the offer for everyone to receive it.

One of our hotel customers recently ran a Groupon offer and the phone started ringing at 5am on the morning it went live.  They pulled the phone out of the wall at 12 midnight, as it hadn’t stopped ringing for the whole 19 hours!  Whilst that sounds amazing – and this is certainly a new craze worth investigating, we would advise caution with any vouchers and coupons.

Our top tips include:

  1. Ensure the offer is compelling, but that it also makes you a profit.  Discounts and vouchers should not cost you money – that’s bad business.
  2. Remember the commission – Groupon typically charges 30-50% and that’s a significant chunk to work into your calculations
  3. Include a deadline / use-by date.  This encourages people to act quickly and will ensure customers can’t still be claiming their £5 off in 5 years.
  4. Use something more interesting than 10% off – that’s a really dull offer and is massively over-used.  As a result, most people don’t even take notice of 10% off discounts – they’re everywhere.  So get more creative.
  5. Capture everyone’s details, so you can contact them directly next time (with their permission).  If you’re attracting new customers, you need to find ways to attract them back – at a lower acqusition cost in future.

Try some different vouchers / coupons / offers and monitor which works best – then do more of them.  It seems to be working massively in the current economy.


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