In case you haven’t noticed, the world of marketing has been rapidly changing. Thanks to social media and the free flow of communication
and word-of-mouth capabilities, marketers are finding new, better, and
moreefficient ways to reach their target market.
One emerging marketing tactic that is catching on is “collective buying” or more commonly called “groupons”. The term “groupon” most
likely comes from the site groupon.com,
and it’s name is very reflective of itself. A groupon is a coupon that
offers a very large discount on products and services (usually at least
40 percent or more) if a ‘group’ of people commit to using the coupon
and buying the product or service.
HOW A GROUPON WORKS
Using sites like groupon.com, companies can offer coupons for anywhere from 40% – 90% off their products and services. The catch is,
the company can put a minimum cap for the number of coupons that have to
be bought in order for the coupon to be active. For example, a
restaurant can offer a $25 dish for $10 (a 60 percent discount), but
that coupon is only valid if 50 coupons are bought (the page I’m looking
at right now that offered this exact deal and it sold 381 coupons).
The discounts, while they may be large, are generally only offered for
24-hour period. People can learn about these deals by either checking
the webiste daily or usually the site will send out an email featuring
“The Daily Deal” along with how many of those coupons have to be
purchased in order for them to be valid, and they’ll include a live
r with the number of coupons already bought.
WHAT’S IN IT FOR THE COMPANIES?
Groupons allow companies to offer larger discounts because they can ensure that some of the fixed costs are covered and their average total
cost is lowered to a point where the company can make a profit. Whereas
some companies may stray away from groupons because they can make only
small profit, there are intangible benefits of a groupon over a
traditional coupon campaign, the biggest of those being its viral
Customers who come across the discount in the early stages are not
Has anyone had any experiences using groupons that they would like to share? (to see some other experiences/comments, go here)